Motor Finance Litigation: Potential Implications for UK Auto ABS

In a landmark ruling on 1 August, the UK Supreme Court upheld key aspects of the Court of Appeal’s earlier decision regarding the handling of discretionary commission arrangements (DCA) under UK consumer protection law. Specifically, the court confirmed that failing to properly disclose significant commission structures could, in certain cases, result in an “unfair relationship” under Section 140A of the Consumer Credit Act 1974. However, the court also rejected several broader claims advanced by borrowers—including arguments based on fiduciary duty, bribery, and unconscionable conduct—concluding that these legal doctrines were not applicable to the specific facts of the cases. While the ruling does not preclude the use of such arguments in other contexts, it limits their relevance in motor finance disputes and helps clarify the legal boundaries of commission-related challenges.

While the ruling focused on a single DCA-era agreement, it may influence origination practices and legacy…