Johnson Law Group secures successful County Court judgment in PCP finance commission claim

Johnson Law Group has represented another successful claimant in a PCP finance claim against RCI Financial Services Limited following a trial at North Shields County Court.

The claim concerned a discretionary commission arrangement (DCA) under which the motor dealership was able to determine the rate of interest payable under the claimant's finance agreement and receive commission from RCI based on the interest charged.

The claimant argued that the commission arrangement had not been adequately disclosed and that the relationship between the parties was unfair for the purposes of Section 140A of the Consumer Credit Act 1974.

At trial, the Court found in favour of the claimant and concluded that the finance agreement was unfair within the meaning of Section 140A. The Court also found that there was an imbalance between the parties arising from the fact that the dealership's entitlement to receive commission from the lender had not been disclosed to the claimant.

The claimant was awarded damages together with compensatory interest. The commission paid in this case was just under £400. The claim comes amid wider scrutiny of historical motor finance commission arrangements and the Financial Conduct Authority's proposed redress scheme for consumers affected by undisclosed commission arrangements.

RCI defended this matter all the way to trial despite the uncontested evidence that the commission structure was the prohibited DCA and its relatively modest value. It instructed senior counsel to represent it at trial and flew in senior executives from its London headquarters to give evidence on the day. That evidence was ultimately criticised by the judge.

Jamie Patton, Managing Director of Johnson Law Group, said: “The outcome of this case is an example of how some banks are prepared to ignore the guidance of their regulator and spend thousands defending PCP claims when they should be settling them. Whilst the FCA continues to claim that people don’t need lawyers to claim their compensation, the reality is they do – as this case demonstrates.”

Johnson Law Group is a Manchester-headquartered firm of solicitors regulated by the Solicitors Regulation Authority, specialising in consumer and group litigation claims. The firm has a network of offices including locations in London, Houston, New York and Chicago.

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