Collective consumer redress – the motor finance case study

In recent years, consumer credit disputes have surged, particularly those concerning complaints about financial products and services. The Financial Ombudsman Service (FOS) saw a significant rise in complaints, with a 49% increase for the 6 months ending December 2024 compared to the same period in the previous year.[1] This surge is largely driven by issues related to motor finance firms and commission arrangements (as well as a high number of credit card complaints and some banking fraud).

With more than 2 million new and used vehicles bought using motor finance each year[2], motor finance is big business. Until the FCA banned it on 28 January 2021, car dealers acting as brokers to arrange motor finance could adjust the interest rates on finance offered to customers: the higher the interest rate, the greater the broker’s commission payment. This is known as a discretionary commission arrangement (DCA).

These consumer credit issues affect millions of consumers. The intersection of consumer credit law and collective redress mechanisms has therefore become a natural focal point for financial services litigation in England and Wales.

This blog post explores three[3] recent cases currently in the hands of the appellate courts in England and Wales concerning the explosion in motor finance complaints and claims from consumers and claims management companies and lawyers, namely:

• the keenly awaited judgment of the Supreme Court in Hopcraft v Close Brothers Limited (UKSC/2024/0157)[4];
• the Court of Appeal hearing due to take place in R (Clydesdale Financial Services Ltd t/a Barclays Partner Finance) v Financial Ombudsman Service (CA-2025-000102); and
• the recent decision in Angel & Ors v Black Horse Ltd [2025] EWHC 490 (KB), which is being appealed to the Court of Appeal.

Whilst the outcomes of these cases are not yet known, they will create a pivotal moment in both consumer credit and collective redress litigation, shaping the next chapter in consumer credit claims. The question, then, is how will the many consumer claims that sit behind these landmark decisions be determined?

An overview of the three cases under appeal

Hopcraft

This month (July 2025)[5], the Supreme Court will hand down judgment in the expedited, three linked appeals in the matter of Hopcraft. The Court of Appeal decision found lenders liable for undisclosed, or only partially disclosed, commissions paid to second-hand car dealers who were acting as the consumers’ credit brokers to arrange finance with lenders on their behalf.

The focus of this litigation is on legal issues concerning fiduciary duties and their scope, the so-called “disinterested duty” and the tort of bribery. In particular, the Supreme Court’s decision will determine the following issues:

• Did the motor finance dealers owe a “disinterested” and/or fiduciary duty to their customers?
• If so, (i) were those duties breached by the commission payments being “secret” or (ii) even if not secret, was there nevertheless insufficient disclosure to procure the customer’s fully informed consent to the commission payment?
• If yes, can the lenders be liable in the tort of bribery to pay compensation as accessories to that breach, and what is the correct approach to remedies?
• (In respect of the Johnson appeal only), was the credit agreement between the lender and customer unfair under s.140A of the Consumer Credit Act 1974 (CCA)?

Since the Hopcraft trio of cases have been the subject of appeal, thousands of County Court claims are stayed, tens of thousands of consumer complaints are awaiting determination by the FOS, and hundreds of thousands of complaints have been made to lenders[6]. Accordingly, financial institutions, consumer groups, claims management companies, the FCA, the motor finance industry, dealerships and all of their legal representatives await the outcome of the Supreme Court’s decision with bated breath. Indeed, even the government realised the economic importance of this decision for the UK and its growth agenda, as demonstrated by its (failed) attempt to intervene in the Supreme Court hearing[7] (the Supreme Court heard from the FCA in both written and oral submissions, and from the National Franchised Dealers Association).

Clydesdale v FOS

Again, the case stems from the commission payment by Clydesdale, trading as Barclays Partner Finance, to a broker (Arnold Clark) in respect of a consumer loan for the purchase of a car. The broker could negotiate an interest rate with the consumer and thereby receive a higher commission under its arrangement with Barclays. In the complainant, Ms Lewis’s case, the interest rate was set at the broker dealer’s advertised rate.

The Ombudsman made a monetary award to the complainant after finding that the broker commission was paid in breach of the FCA’s commission disclosure rules (CONC), the FCA Principles for Business (PRIN) and it amounted to an unfair relationship under the CCA. Compensation was duly paid. The lender challenged the decision by way of judicial review on three grounds, agreeing not to seek recoupment in the event of a successful challenge. The High Court determined that the challenge was not academic because of the many other related complaints outstanding. To that extent, the case has been treated as a type of test case.

The High Court dismissed each of the lender’s three grounds for judicial review:

• In relation to the interpretation of CONC 4.5.3 R, although the pre-2021 version of that rule required disclosure of the “existence” of commission, the Court held, consistently with the FOS’s view (supported by the FCA as intervener) that the rule, properly construed, was wide enough to require, in some cases, disclosure of more than the bare fact of commission and that it was therefore right (as the Ombudsman had found) that the broker’s disclosure was insufficient.
• The Court rejected the lender’s submission that where a rule and a Principle (in PRIN) occupy the same territory, the Principle would “normally” be complied with (although this would be so in many cases).
• As to the third ground, concerning deemed agency under section 56 of the CCA, the words “in relation to” in that provision should, the Court determined, be construed broadly and therefore the Ombudsman had not erred in law.

Barclays was granted permission to appeal the High Court decision. However, at the 1 July 2025 hearing before the Court of Appeal, following questioning from Lord Justice Males, the parties (and FCA, intervening) agreed that it would be sensible to await the outcome of Hopcraft in the Supreme Court before the hearing of Barclays v FOS, and the appeal is therefore to be relisted for Autumn 2025.[8]

Angel v Black Horse

The third in this trio of cases, Angel v Black Horse, concerns, rather than the substantive legal issues of consumer credit and finance law, the procedural approach that ought to be taken to mass consumer claims in respect of motor finance commissions.

The High Court’s ruling overturned a previous decision that required over 5,800 claimants to file separate claims against motor finance companies. Instead, Mr Justice Ritchie allowed the use of “omnibus” claim forms under CPR 7.3, on the ground that such claims could be “conveniently disposed of in the same proceedings”.

On 3 June 2025, Black Horse was granted permission to appeal to the Court of Appeal. The case is currently awaiting documents, allocation and listing.[9]

Options available to deal with mass consumer litigation – a recap

Claimants may use any one of several mechanisms to bring litigation as a group:

1. Under CPR 19.21, multiple claimants with common or related issues of fact or law can have their claims managed collectively under a Group Litigation Order (GLO). The claimant group must apply to the High Court for a GLO after which the Court will set up a register of claims to be included together with issuing directions for the appointment of lead solicitors, selection of test claims, and procedures for disclosure, evidence, and trial (or bifurcated trials) of, first, the common (GLO) issues and, second, individual issues. Whilst GLOs enable pooling of resources for claimants and defendants from a coordinated approach to multiple claims rather than a fragmented stream of individual actions, GLOs can be slow, costly, and highly complex. This blog has previously noted a shifting away from the use of GLOs in some cases.
2. A representative action under CPR 19.8 allows a claim to be brought by one person as a representative of others with the same interest in the claim. However, all parties must have the same legal interest, a strict test, as enforced by the Supreme Court in Lloyd v Google [2021] UKSC 50, which means their application is limited. (See further the earlier blog on this topic.)
3. Since 2015, collective actions may be brought before the Competition Appeal Tribunal for breaches of competition law. Such claims are governed by Chapter IV of the Competition Act 1998 (as amended) and require a collective proceedings order (CPO) to be granted, which is only done where the claims are both eligible (s.47B(6)) and the class representative suitable (s.47B(8)).
4. Alternatively, under CPR 7.3, multiple claims may be bought on a single claim form, referred to as an omnibus claim form. This is provided that those claims can be “conveniently disposed of in the same proceedings”. The Court retains discretion to sever or strike out improperly joined claims therefore claimants run the risk of a judge disagreeing with their approach and each claim requiring a separate claim form. And even if in separate claim forms, claims may be consolidated or tried together under CPR 3.1.
5. Finally, it remains open for claimants, even those gathered by claimant law firms or claims management companies (CMCs), to issue individual claims to be determined on a case-by-case basis. Although this approach can result in inconsistent and therefore unsatisfactory judgments in County Courts, both claimants and defendants can choose to appeal, or take a lead or test case to the High Court, to enable a binding precedent to be set.

Historic case management of mass consumer claims

Large volumes of consumer claims are not a new phenomenon.

In the early 2000s consumers began challenging bank overdraft charges as unfair penalties, relying on common law penalty doctrine and later (and more regularly) the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). Consumer bodies and CMCs fuelled mass litigation, using template letters and generic county court claims. To deal with the volume of near-identical claims, in July 2007, the then Office of Fair Trading and eight major banks agreed to run a test case in the High Court to determine whether the banks’ unauthorised overdraft charges could be assessed for fairness under the UTCCRs. Simultaneously, blanket stays were imposed upon all overdraft charge claims, and the FOS and banks also agreed to suspend decisions and complaints. After failing to persuade either the High Court of Court of Appeal that overdraft charges were exempt under Reg 6(2) UTCCRs and could not be assessed for fairness[10], in 2009, the Supreme Court agreed with the banks.[11] The flood of claims was stemmed.[12]

A similar approach was taken during the PPI mis-selling scandal. After multiple PPI hearings in the County Courts, first, Harrison v Black Horse Ltd [2012] Lloyd’s Rep IR 521, and then Plevin v Paragon Personal Finance Limited [2014] UKSC 61 (which held that Harrison was wrongly decided) were appealed to the Court of Appeal and Supreme Court respectively. From the Supreme Court’s Plevin decision flowed additional FCA rules and guidance as to how PPI claims should be resolved, and a significant number of complaints were addressed following this decision.

More recently, however, in Abernethy and ors v Barclays Bank UK plc and ors [2025] EWCC 1 (Abernethy), claimants have adopted a different approach. Rather than lead with one claim or test case, which will set a precedent and bind the lower courts, Harcus Parker Limited, the claimants’ legal representatives and a prominent claimant law firm, have collected consumer “Plevin” claims and are attempting to bring them en masse. By the date of the hearing, there were some 14,599 “A” claims on  four single claim forms (plus additional “B” claims, increasing the number further still). In each case, it is alleged that the claimant’s credit relationship with their respective lender was unfair as a result of PPI commission paid by them and funded through their PPI policy premium. HHJ Emma Kelly rejected both the application for a Group Litigation Order (GLO) and the submission that the claims could be conveniently disposed of in the same proceedings (and so could share a claim form) under CPR 7.3. It remains to be seen whether related proceedings to Abernethy brought by Harcus Parker can continue on omnibus claim forms or not. This issue has been adjourned pending the appeal in Angel v Black Horse.

The Angel v Black Horse decision

The most recent decision tackling the issue of the most appropriate case management for consumer claims is Angel v Black Horse, introduced above. At first instance, HHJ Worster concluded that the s.140A CCA motor finance commission claims could not be “conveniently disposed of in the same proceedings” and required each claimant to issue an individual claim form. In reaching that decision, the judge relied upon a Divisional Court decision, Abbott v Ministry of Defence [2023] 1 WLR 4002.  However, by the date of the High Court appeal in Angel, Abbott had been overruled by the Court of Appeal in Morris and others v Williams and Co Solicitors [2024] EWCA Civ 376 (see [27] and [42] of Mr Justice Ritchie’s Angel decision).

Applying Morris, Ritchie J in Angel concluded that the decision in Abbott was too restrictive – the test in CPR 7.3 follows the natural meaning of the words [33]. The Judge set out nine factors identified in Morris and other relevant case law, as follows:

• Whether there are multiple claimants suing the same defendant or multiple defendants.
• The number of claimants.
• Whether the claims relate to the same matters or different matters.
• Whether the claims involve the same causes of action.
• Whether the issues as set out in the generic POC are likely to be common issues.
• Whether the case specific claims and defences do or are likely to raise common issues of law or fact.
• Whether decisions in lead or test cases will be significant for the disposal of following cases so that they will either bind the parties (issue estoppel) or be persuasive in the disposal of issues in the following cases (for example breach of regulatory guidance, agency liability, fiduciary duty, disinterested duty, interpretation of brokerage agreements, the very clear case point, or more generally: breach of duty, breach, liability, causation or quantum).
• Whether the overriding objective is better met by route one or route two, taking into account the requirement to deal with cases justly and at proportionate cost; seeking to ensure equal footing, full participation, saving expense, proportionality to the sums involved, the complexity and the importance of the case and the financial positions of the parties; whilst allocating an appropriate share of the Court’s resources and enforcing compliance with the rules.
• Overall, whether all or some claims will more conveniently be disposed of together.

The Judge then set out the result of earlier unfair relationship cases (and other group litigation authorities), noting that GLOS have stricter criteria than omnibus claim forms ([34]-[41]).  In considering Abernethy, the Judge noted that HHJ Kelly had refused the omnibus route and ordered severance because: (i) there were 8 different defendants; (ii) it was unclear from the generic POC, and little was known, about the issues which arose in each claim; and (iii) the claimants had not grouped similar claims together [41].

After summarising the Grounds of Appeal (at [47]-[50]), and the Appellant’s (at [51]-[58]) and Respondents’ (at [59]-[70]) submissions, Ritchie J reached the following conclusions:

• The guidance in Abbott had been overturned by Morris; the jurisdiction for omnibus claims forms is broad and flexible, far broader than the GLO criteria [72], [86].
• It was “not really in dispute that regulatory breach and lender liability would be common issues”. Despite no generic defences or specific POC or defences having been served, the Court would “be able to see more specific common issues” going forward [72] and [87].
• Although unfairness is obviously “in principle” not a common issue, “lead cases can be tried on all their facts” (from which themes of unfairness could be drawn), in particular in relation to “defendant conduct” for which a common issue could be tried [73].
• Although the Claimants had produced “messy submissions” regarding the agency point (s.56 CCA), that did not change the existence of that broad common issue [74]-[75].
• The judge in the court below had wrongly and too narrowly assumed the significance of determining broad common issues on the other cases [76]. Ritchie J then hypothesised how many dealers and brokers may ultimately be involved and produced a list of possible issues on which the Court could provide rulings in lead cases [77].
• In any event, significance or bindingness was not the test; it was “convenient disposal” [78] and [84].

Taking each of the Morris factors in turn, Ritchie J concluded that nearly all the factors weighed in favour of flexible omnibus disposal [89].

Comment on the Angel v Black Horse decision

Mr Justice Ritchie’s decision in Angel v Black Horse has been hailed as an advancement in access to justice and fairness for consumers, allowing resolution of multiple claims in a more efficient and proportionate way for all. The decision also (rightly) applied the Court of Appeal’s decision in Morris, promoting legal certainty regarding the test to be applied.

However, hampered perhaps by the undeveloped nature of the claims before him, Mr Justice Ritchie gave little guidance in relation to the threshold as to what constitutes sufficient “commonality” to justify an omnibus claim:

• The Judge said that the “POC in Angel are a useful place to start” [13] but acknowledged that the generic POC did not contain any facts and matters relating to the claimant’s credit contract; and brokerage agreements; any facts and matters relating to each claimant’s personal circumstances; or any sums claimed [15]. There were no individual POC, no generic defence, and no individual defences.[13] Accordingly, when it came to analysing the commonly pleaded issues, the Judge was left making assumptions (see [72]).
• For example, the assumption that the defendants would deny the allegations that they had breached CONC guidance on conduct by failing to disclose the existence or nature of the commission was probably a fair one. But the devil is in the detail – why would each defendant deny breach in respect of each claimant’s case? The reasoning may be different in each case. Indeed, in some of the 5,800 odd cases grouped together under Angel, it was possible (because the Claimants/Appellants considered it an issue (see [51(1)]) that the brokerage agreements between the lender and broker/dealer did not include a DCA at all. If the broker/dealer had no control over the interest rate set, or if the commission was not in the discretion or control of the broker, one questions whether the impartiality of the broker or the decision-making process of the customer could potentially be affected at all absent a discretionary commission incentive.
• The Judge also speculated that the issue of unfairness, an issue that the Courts had previously regarded as inappropriate for group litigation (see, for example, Abernethy), could be determined by analysing defendant conduct alone [73]. Even if not determinative of the issue of unfairness, it still passed the CPR 7.3 test because (the Judge said) “….that will give the lender a tougher task to discharge the burden of proof to show unfairness”. Not only does that appear to be shoehorning an individual issue (unfairness in each case) into the bucket of allegedly “common” issues, but by singling out defendant conduct as an individual factor to investigate to assess unfairness appears to contradict the “very broad and holistic assessment” that the Court is required to make in relation to an allegation of unfairness under s.140A CCA (see Smith v RBS [2023] UKSC 34 at [25] per Lord Leggatt).

That brings into question the consistency of Mr Justice Ritchie’s decision in Angel v Black Horse with the earlier decision of HHJ Kelly in Abernethy. Although HHJ Kelly noted that her conclusion “should not be interpreted as a conclusion that omnibus claim forms never have a place in Plevin litigation [unfair relationship allegations in the context of PPI commission claims]” she only said that “it may be possible to group cases with common themes which would enable claims to be conveniently disposed of together” where the “claimant legal representatives have undertaken a detailed analysis of their claims” (Abernethy, at [158]). There is no suggestion in Angel v Black Horse that this had been done; indeed, the Judge accepted that the Claimants had produced “messy” submissions.

A further difficulty with the Angel v Black Horse decision is that, while omnibus claims may promote efficiency, they can also complicate case management, especially where factual differences between claimants are significant. At the outset [2], the Judge expressed his frustration that the claims had been “stalled in procedural wrangles for over 2 years”. However, the effect of his judgment would be to prolong that procedural wrangling: group case management would require debate between the parties and before the Court in relation to the appropriate claims to choose as lead cases; what should be done with the remaining claims in the interim; and how those claims should proceed to trial. The future case management of the claims is not really addressed in the judgment and may have been underestimated by the Judge.

The timing of this decision is also noteworthy. The decision comes amid an FCA review into motor finance commission arrangements and precedes the Supreme Court’s decision in Hopcraft. The FCA has publicly stated that “if, following the outcome of the Supreme Court judgment, we conclude motor finance consumers have lost out, it’s likely that we’ll consult on an industry-wide consumer redress scheme.”[14] The FCA’s statement continues: “We would aim to make any scheme easy for consumers to understand and participate in, without needing to use a claims management company (CMC) or law firm. Consumers should be aware that by signing up now with a CMC or law firm, they may end up paying for a service they do not need and having to pay up to 30% in fees out of any award they may receive.” With such a redress scheme in place, consumers eligible to seek redress under that scheme will no longer need to be claimants in mass litigation such as Angel v Black Horse, as regulation will step in to require firms to correct consumer detriment (for that cohort) caused in the market. Of course, the FCA is equally keen to ensure that consumers are not detrimentally affected by CMCs and claimant law firms taking a cut of their compensation; a decision such as Angel v Black Horse only fuels those entities to continue to collect potential claims, not necessarily in the best interests of the consumer. On the other hand, as the outcome of Plevin and subsequent DISP App 3 demonstrated, regulation and redress schemes do not always satisfy the consumer and there may still be room for group litigation to resolve cases or provide recovery of losses falling outside any scheme created, or to answer questions not addressed by regulation. Redress schemes also take time to create and to implement and consumers may prefer a CMC or law firm to manage and progress their claim through litigation rather than wait any longer.

As noted earlier, permission has been granted to Black Horse to appeal the decision in Angel v Black Horse.

The future of collective redress in consumer claims

The next development in the motor finance commission claims saga will be the Supreme Court’s judgment in Hopcraft. From that decision, it is anticipated that the FCA will take swift and decisive action to implement a consumer redress scheme to address the large volume of complaints and claims made to date.

The Court of Appeal hearing Barclays v FOS will be bound (insofar as relevant) by the Hopcraft decision, which could determine the course of that Ombudsman-related case. Otherwise, the Barclays appeal will be heard in Autumn 2025 and will provide clarity in relation to motor finance cases being pursued in the FOS. If the FCA sets up a consumer redress scheme, the FOS may, however, direct consumers to that scheme for the resolution of their complaint, in preference to obtaining Ombudsman decisions (the FCA’s consumer redress schemes sourcebook, (CONRED 1.6) contains further information on the role of the FOS in the context of such schemes).

As to Angel v Black Horse, it is itself the subject of an appeal. However, the judgment in that appeal is likely to post-date both the Hopcraft decision and Barclays v FOS appellate hearing (and, most probably, judgment). Once those decisions are handed down, it will be interesting to see what room remains for an omnibus claim form of commission claims that would otherwise be addressed through a redress scheme or by the FOS.

In this author’s view, the Hopcraft approach (of test claims) is the more desirable method of resolving these consumer finance claims. A test or lead case, whether given that name or not, establishes principles of law, and provides strong guidance to both claimants and defendants, without the need for the procedural complexity of omnibus claim forms. Such precedent-setting cases also tend to attract interest from, and generate interventions by, the regulator, allowing the regulatory perspective to be addressed too. However, cases are inherently fact-sensitive, and test/lead cases cannot cover the entire spectrum of claims, which leaves extant complaints and claims on different facts undetermined, possibly to be picked up by claimant law firms and funders to resolve still.

Until this trio of claims is determined, defendants need to be wary that Angel v Black Horse indicates a shift in the Court’s attitude both to omnibus claim forms generally, and to the assertion that unfair relationship claims cannot be addressed any way other than individually. In the context of motor finance commission claims, the debate may be overtaken by events (the Hopcraft decision and possible FCA consumer redress scheme). But Angel v Black Horse appears to set a broader precedent, meaning that group consumer claims need to be addressed at the earliest stage.

Footnotes

[1] https://www.financial-ombudsman.org.uk/data-insight/our-insight/half-yearly-complaints-data-h2-2024

[2] As recorded in the FCA’s recent statement on 5 June 2025: https://www.fca.org.uk/news/statements/key-considerations-implementing-possible-motor-finance-consumer-redress-scheme

[3] A fourth, for which there is not space in this blog post, is Doug Taylor Class Representative Limited v MotoNovo Finance Limited and Others and Doug Taylor Class Representative Limited v Santander Consumer (UK) plc and others, collective proceedings brought in the Competition Appeal Tribunal (CAT) by consumers who entered into motor finance arrangements with the defendants. Those proceedings have been stayed pending the Supreme Court’s decision in Hopcraft.

[4] Linked with Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (UKSC/2024/1058) and Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (UKSC/2024/0159).

[5] Lord Reed, the President of the Supreme Court, indicated orally, at the conclusion of the Supreme Court hearing of Hopcraft, that judgment would be handed down sometime in July (Afternoon Session, Thursday 3 April 2025. See https://supremecourt.uk/cases/uksc-2024-0157#watch-hearings).

[6] See paragraph 6 of the FCA’s written submissions to the Supreme Court under Rule 26 of the Supreme Court Rules 2009: https://www.fca.org.uk/publication/corporate/fca-application-notice-submissions-15-january-2025.pdf

[7] https://supremecourt.uk/news/decision-on-applications-to-intervene-uksc20240157-uksc20240158-uksc20240159

[8] Males LJ agreed to certify the case as suitable for hearing during court vacation in September 2025, should the court’s availability permit it.

[9] https://casetracker.justice.gov.uk/getDetail.do?case_id=CA-2025-001011.

[10] OFT v Abbey National and ors [2008] EWHC 875 (Comm); [2009] EWCA Civ 116.

[11] OFT v Abbey National and ors [2009] UKSC 6.

[12] Most claims were struck out or never revived.

[13] Ritchie J suggested that it might be better to determine r.7.3 issues after a generic POC and generic defence in the future [2].

[14] FCA statement made on 5 June 2025, see: https://www.fca.org.uk/news/statements/key-considerations-implementing-possible-motor-finance-consumer-redress-scheme