A cloud of anxiety was hanging over the British Motor Museum. Alongside showrooms featuring the 1988 Le Mans-winning Jaguar XJR-9 and the Land Rover Defender used in opening scenes of the James Bond film Skyfall, were conference rooms filled with worried lawyers, bankers and compliance staff from across the motor lending industry.
Attenders of the Financing and Leasing Association’s annual motor finance convention in Warwickshire last month had spent weeks trying to get to grips with a shock court of appeal decision that sided with two aggrieved car loan customers.
In October, judges ruled that paying commission to the car dealers who had arranged the loans, without disclosing the sum and terms of that commission to borrowers, was unlawful. But what judges deemed to be “secret” commission arrangements had actually been standard practice across the industry, and within City rules, for years.
Lenders started to panic. The ruling had opened the door to a fresh flood of claims – not just from borrowers, but a voracious claims management industry that had been waiting for a…
