Close Brothers wins Supreme Court appeal in motor finance case

Published 04/08/2025, 07:28
Close Brothers wins Supreme Court appeal in motor finance case

LONDON - Close Brothers (F:CBRO) Limited (CBL) has successfully overturned a Court of Appeal judgment in the "Hopcraft" motor finance commissions case, according to a press release issued on August 2, 2025.

The Supreme Court of England and Wales ruled on August 1 that motor dealers acting as credit brokers do not owe fiduciary duties to their customers. As a result, the court dismissed all claims against Close Brothers in the case. The Supreme Court reached the same conclusion in related cases against FirstRand Bank Limited.

On a separate issue in the "Johnson" case regarding unfairness under the Consumer Credit Act 1974, the Supreme Court upheld a previous ruling that FirstRand’s relationship with Mr. Johnson was unfair, requiring the bank to pay compensation equal to the dealer commission plus interest.

Close Brothers Group plc stated it welcomes the judgment, which "provides clarity on important legal and commercial principles." However, uncertainty remains as the Financial Conduct Authority (FCA) is expected to announce on August 4 whether it will consult on a redress scheme following its review of motor finance commissions.

The banking group reported its Common Equity Tier 1 capital ratio stood at 14.0% as of April 30, 2025, which includes the impact of a £165 million provision related to motor finance commissions. The recently announced sale of Winterflood Securities is expected to further increase this ratio upon completion.

Close Brothers, a UK merchant banking group providing lending, deposit taking and securities trading services, employs approximately 3,000 people primarily in the United Kingdom (TADAWUL:4280) and Ireland. The company is listed on the London Stock Exchange (LON:LSEG) and is a FTSE 250 constituent.

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