Close Brothers given permission to appeal motor finance ruling
By Michele Maatouk
Date: Wednesday 11 Dec 2024
(Sharecast News) - Close Brothers shares surged on Wednesday after the Supreme Court agreed that it could appeal a landmark ruling on motor finance commissions.
In October, the Court of Appeal ruled in favour of British consumers that motor dealers acting as credit brokers owe a fiduciary duty to their customers.
Close Brothers said at the time that it would appeal the decision and that it was temporarily pausing the writing of new UK motor finance business while it reviewed and implemented "any relevant changes to our documentation and processes to ensure compliance with these new requirements".
There were three complainants involved in the case: Amy Hopcraft, Marcus Johnson and Andrew Wrench. They argued that the car dealers owe a duty to be impartial in the information they provide.
Hopcraft's case was against Close Brothers, while Johnson's was against Firstrand Bank and Motonovo Finance. Wrench's case was against Firstrand.
The Court of Appeal said at the time: "The dealers were the sellers of the cars, but they were also acting as credit brokers on behalf of the claimants. In the latter role, their task was to search for and offer the customer a finance deal from their panel of lenders which was suitable for their needs and competitive.
"In some cases they undertook to find the best deal or the one which was most suitable for the customer."
At 1335 GMT, Close Brothers shares were up 7.2% at 258.17p. Shares of Lloyds Banking Group - which also provides motor finance - were 4% higher at 55.12p.
"Close Brothers Group will not be commenting further on an ongoing appeals process, and any further announcements will be made as and when appropriate," it said on Wednesday.
In a trading update in November, Close Brothers maintained its guidance for 2025. However, it said it was expecting "some financial impact" from measures taken in response to the Court judgment, including potential further increases in professional and legal fees and associated operational costs.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN