Following the UK Supreme Court’s judgment in the case of Hopcraft and another (Res) v Close Brothers Limited (App); Johnson (Res) v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (App); Wrench (Res) v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance (App), the SRA and FCA have issued guidance to law firms and claims management companies.
Prior to the publication of the judgment, the SRA and FCA issued a joint warning by the SRA and FCA to law firms and claims management companies (CMCs) over poor practices in motor finance commission claims. Both bodies are concerned about the way claims are being promoted and pursued. The SRA is responsible for the conduct of solicitors and law firms, while the FCA regulates financial services and claims management companies. On 8th August 2025, the SRA issued a statement entitled ‘Motor finance commission claims – the Supreme Court judgment and what we expect from law firms’, which was updated on 12 November 2025. The SRA’s statement aims to ensure that regulated law firms handling motor finance commission claims do so properly in accordance with their rules and codes.
What Did The Supreme Court Conclude?
Following the motor finance commission claim case, the UK’s Supreme Court concluded:
- Motor finance companies may have entered unfair relationships with consumers, and that commission may be repayable in some limited circumstances, and
- Car dealers did not have to prioritise consumers’ interests over their own, meaning that some motor finance consumers with commission disclosure claims will not be entitled to compensation.
The conclusion of the judgment states, “The dealers in the present cases were not subject to any fiduciary duty towards their customers. It follows that the customers’ claims against the lenders in equity and in bribery cannot succeed”.
FCA Consultation
On 7 October 2025 the FCA published its consultation on an industry-wide scheme to compensate motor finance customers who were treated unfairly between 2007 and 2024. The consultation has been extended and is open until 12 December 2025. The FCA is also consulting on extending the deadline for firms to send a response to certain motor finance complaints. This consultation closed on 4 November 2025.
What Does The SRA Expect Of Law Firms Handling Motor Finance Commission Claims?
The SRA’s statement states that it expects law firms handling motor finance commission claims to:
- Understand the Supreme Court’s new judgment and its relevance to both existing and prospective clients
- Determine what the impact of the judgment means for prospective and existing clients
- Inform clients, (before they sign any agreement for prospective clients), about the realistic prospect of the FCA’s redress scheme and the possibility of pursuing a free claim independently when the scheme is launched
- Ensure compliance by any Claims Management Companies (CMCs) used for referrals
- Ensure any publicity in relation to their practice is accurate and not misleading
- Ensure new and existing clients have clear information to help them make informed decisions, including on costs
- Comply with the SRA’s Code of Conduct for Solicitors (including paragraphs 1.2, 3.4, and 8.6) and any Standards and Regulations that apply
- Review and implement the Claims management activity guidance, Representing clients for claims for financial services or products guidance, and Marketing your services to members of the public warning notice
- Notify clients promptly if their claim is no longer valid. The SRA makes clear, “We expect most motor finance commission cases are on a ‘no win, no fee’ agreement, ‘contingent’ (based on) the outcome of a case, so no charges will be due”, and
- Disclose termination terms clearly, including any costs payable if the client chooses to exit the agreement, ensuring such fees are reasonable, transparent, and agreed upon upfront.
The statement also explains that the SRA would find the following behaviour concerning:
- Charging clients for work that has not been done or is not chargeable
- Undertaking unnecessary work to increase fees and maximise charges on termination
- Charging more than what the fee cap would have allowed, and
- Excessive hourly rates.
Final Words
With many thousands of potential motor finance claims on the horizon, the SRA and FCA are signalling zero tolerance for misconduct. Law firms and CMCs must review their marketing, client engagement, and fee structures immediately to avoid regulatory action. The firms best positioned to handle such cases will be those that fully adhere to their regulatory obligations, build trust, and reinforce the profession’s integrity when handling high-volume claims.
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