Treasury's Intervention in Motor Finance Supreme Court Case: What It Means for PCP Claims

In the wake of recent headlines suggesting there could be a halt to motor finance compensation payments, Johnson Law Group wants to clarify the current situation and dispel any confusion about Personal Contract Purchase(PCP) claims and compensation rights. Contrary to some reports, the government and Rachel Reeves have not stopped compensation payments, nor do they have the authority to do so. Here’s what you need to know.

No PCP Claims Have Been Stopped

The Financial Conduct Authority (FCA) has not stopped PCP secret commission complaints. What has happened is that the FCA has provided banks with more time to handle these complaints. Typically, financial institutions must respond to complaints within eight weeks, after which complainants can escalate their cases to the Financial Ombudsman Service. However, the FCA has allowed banks a "pause" to manage complaints, extending this response window until 4th December 2025.

This pause does not mean claims are invalid or that compensation is off the table—it simply grants banks additional time to address these cases.

The Government’s Role: What Has Rachel Reeves Done?

The Treasury, led by Rachel Reeves, has taken the unusual step of applying to intervene in an upcoming Supreme Court case (the application was submitted the week commencing January 2025). This case, set to be heard in April 2025, involves an appeal from the Court of Appeal decision in the case of Johnson, Hopcraft & Wrench v. First Rand and Close Brothers. In this case, the Court of Appeal ruled in favour of the claimants, three private individuals who had used vehicle finance to purchase cars. The Court found that these individuals were entitled to refunds on the interest they paid because the banks had charged commissions without disclosing them.

The Treasury's unprecedent intervention would seemingly be motivated by a wholly inappropriate desire to try and influence the Courts on how they interpret the law.  The justification for its actions is because it argues that a decision that compensates victims of financial mis-selling could have “adverse consequences for the UK’s reputation as a place to do business and could negatively impact economic growth”.

Can the Government Influence the Supreme Court?

There is nothing stopping any individual or organisation applying to the Supreme Court to make representations in a case by way of “intervention” many question the appropriateness of the Government attempting to bully the judiciary into making decisions it might not otherwise have arrived at. Fortunately for the UK, the Courts operate independently of the lawmakers and and will base its decisions on the law as it stands, not on external pressures or economic arguments. In other words, the judiciary’s role is to interpret and apply existing laws impartially. If the Government wishes to change the legal framework, it would need to pass new legislation—a highly unlikely move given the nature of this case.

Furthermore, introducing legislation that effectively condones undisclosed commissions would be politically unpalatable and could be perceived as endorsing unethical practices.

Key Takeaways for PCP Claimants

Here are the essential points to remember:

1. Your Claim Remains Valid: No one has the power to stop you from pursuing compensation for undisclosed commissions on your PCP agreement.
2. Compensation Is Still on the Table: Neither the Government nor the FCA has stopped compensation payments. The extended timeline simply provides banks more time to address complaints.
3. The Supreme Court Will Decide Based on Law: The highest court in the UK is set to rule on this matter in mid-2025. This decision will be based solely on the legal merits of the case, unaffected by Government lobbying or interventions.

Johnson Law Group’s Commitment to Claimants

At Johnson Law Group, we remain steadfast in our commitment to holding financial institutions accountable for undisclosed commissions. The Court of Appeal’s ruling was a significant victory for consumers, reaffirming that banks must operate transparently and fairly. While the Treasury’s intervention is an unwelcome distraction, it does not alter the fundamental principles of this case or your rights as a claimant.

If you believe you’ve been overcharged by your bank or financial institution, our experienced legal team is here to guide you through the claims process and ensure your voice is heard. We are confident that justice will prevail and that the Supreme Court will uphold the rights of consumers.

For further information or assistance with your PCP claim, contact Johnson Law Group today.

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