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Close Brothers v Hopcraft
As we write, the Supreme Court has begun the three-day hearing in the conjoined appeals in the Close Brothers litigation referred to above, concerning so-called secret commissions paid to brokers by lenders in the motor industry. The key issues to be examined by the Court include:
- When acting as credit brokers, do car dealers owe consumers a ‘disinterested’ and/or fiduciary duty to provide information, advice or recommendations?
- If so, were the payments of commissions by the lenders to the car dealers secret such that the lenders become primary wrongdoers?
- Can the lenders be liable in the tort of bribery? If so, what is the correct approach to remedies?
- If there was sufficient disclosure of the commission to negative secrecy, was there insufficient disclosure to procure the consumers’ fully informed consent to the payment such that the lenders are liable as accessories for procuring the credit brokers’ breach of duty?
- Can insufficient disclosure also suffice to make the relationship between lender and consumer ‘unfair’ for the purposes of the CCA 1974?
The Court of Appeal decision in 2024 sent shockwaves through the car finance industry, which eagerly awaits the Court’s guidance. It is not presently known when the Court will deliver its judgment, but we will cover the outcome in a later newsletter once it is known.