– Top barrister KC believes judicial review is “inevitable”
– FCA’s redress model flawed, warns NFDA
– Prolonged battle risks confidence in automotive market
– Top barrister KC believes judicial review is “inevitable”
– FCA’s redress model flawed, warns NFDA
– Prolonged battle risks confidence in automotive market
The Supreme Court can have removed bribery and fiduciary duty from the litigation landscape, however the design and delivery of a mass redress scheme is more likely to be the following legal battleground.
The barrister who helped secure the Supreme Court victory within the landmark motor finance commission case says he could be “astonished” if the financial regulator’s proposed redress scheme is just not challenged by a judicial review in its current form.
Speaking at Automotive Management Live 2025, Jonathan Kirk KC of Gough Square Chambers said a court challenge is nearly certain unless the financial regulator tasked with designing the compensation scheme makes significant changes.
“I could be absolutely astonished if there was not a judicial review of this scheme in the present form that it’s,” he said. “There are such a lot of practical difficulties,” he said. “The calculation of that is purported to be compensatory. It’s so complex and doesn’t have any sort of rational basis that I believe it’s inevitable.”
Kirk added that, behind the scenes, lenders are already preparing for that eventuality. “I do know that the lenders are gearing up,” he said. “All of the soundings we’re getting is that there’s numerous pressure being placed on the Financial Conduct Authority (FCA), and that this can be a little bit of a cock-up really.”
The regulator last month prolonged the consultation on an industry-wide compensation scheme to 12 December, after stakeholders said they required more time to analyse market data and make sure the scheme is effective.
The consultation’s extension comes as a part of the financial regulator’s work since the Supreme Court judgment in August, which – alongside an earlier High Court ruling – confirmed that motor finance lenders bear liabilities to customers.
Kirk suggested that the FCA could struggle to hit its own goal dates of publishing final rules in early 2026, if a challenge is mounted.
“With any judicial review, you’ve got to bring it promptly, and in any event inside three months,” he explained. “The FCA have responded to all the court litigation by deferring and delaying. They responded to each the Arnold Clark judicial review and to the Johnson case by delaying.”
“For my part, if there’s a judicial review, there might be a permission stage. In this sort of thing you’d expect to get permission quickly, but I might anticipate they’d delay,” he said.
Kirk told the Automotive Management Live attendees that it could depend heavily on what the ultimate scheme looks like, but he poured cold water on the concept of an early, clean launch. “I wouldn’t anticipate that there could be definitely a scheme up and running by March, April of next 12 months. I believe that’s optimistic,” he said.
He also identified that the chance of a judicial review cuts each ways should the scheme prove favourable to the industry, during which case there may be a judicial review pursued by claimants. “I believe you can see, someway, the lawyers might be involved in some unspecified time in the future,” he said.
Save The Date: Automotive Management Live might be back on November 11, 2026
Paul Bentley, a former Lookers director and F&I expert on the National Franchised Dealers Association, said the trade body has already pushed for an extension to the FCA’s consultation period and can proceed to argue that the scheme’s underlying methodology is flawed.
“We’ve gone back and asked for one more [extension] with the only purpose of attempting to indicate that the methodology is flawed,” he said.
https://automotivemanagementlive.co.uk/register-interest?gln_ids=a201826560-1txbosr03ko-694b8025b6e4
Bentley said that provided lenders remain committed and the financial hit to the sector is managed, he believed the retail sector could withstand one other period of uncertainty.
“The sector itself has proved through the years it’s very agile. It adjusts to each hazard within the road. I don’t think there’s a more transparent sector on the market,” he said.
Crucially, Bentley emphasised that dealers have been operating inside the regulatory framework set by the FCA. “We’ve worked to the principles which have been in place,” he said. “No one’s gone out to not do the precise things.
“There’s been a number of dialogue between the NFDA and the FCA, and there have been multiple opportunities for the regulator to say, ‘I don’t like this.’ That’s never come about.”
Cox Automotive business director Shaun Harris warned that the potential for a judicial review does not only pose a regulatory headache; it also risks further undermining confidence within the UK as a stable marketplace for major financial institutions.
“I believe it’s a difficult one for the Government,” he said. “We want to search out economic growth somewhere, and we’re a service economy. You’ll be able to see there’s a few major banks which might be international players which might be applying pressure and there’s the very proven fact that one postponed its results.”
He argued that the priority now needs to be to achieve a sturdy, workable solution quickly – one which avoids drawn-out uncertainty and offers lenders confidence to re-engage fully.
“This must get done, dusted, put away,” he said. “We want to get confidence back within the economy, get these lenders engaged, get them spending money again, and move the economy forward.”
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