Background

In 2025, the Supreme Court’s decision in Johnson v First Rand Bank [1] opened the doors to consumer claims for undisclosed commissions charged by lenders providing finance for car purchases. In that case, the Supreme Court upheld a claim that such commissions were unfair to consumers under the Section 140A of the Consumer Credit Act 1974. 

The Financial Conduct Authority’s redress scheme

Following the judgment, in March 2026, the Financial Conduct Authority confirmed that it was launching an industry wide redress scheme for customers who were treated unfairly between 2007 and 2024. In May 2026, the FCA provided an update that their scheme had been subject to four legal challenges to the Upper Tribunal from a consumer claims firm and three lenders. In July, the regulator further updated that the Upper Tribunal would hear the cases over December 2026 and January 2027 and that a partial suspension of the scheme had been ordered. This means that financial services firms are not yet required to calculate or pay redress or send communications about compensation. Firms are, however, required continue to comply with FCA rules which have not been suspended, including identifying complaints and legal agreements, gathering data and responding to certain cases where compensation is not due. Motor finance scheme partially suspended | FCA.

The Court of Appeal decision in Black Horse Limited v Stuart Angel & ors [2]

In June 2026, the Court of Appeal confirmed that the claims of some 5,800 consumers represented by a single law firm should proceed on the basis of omnibus claim forms, agreeing with the High Court which had overturned the decision of the Circuit Judge in Birmingham District Registry that each claim should be pursued by a single claim form. This meant that the 5,800 claims would be captured by eight claims, one in relation to each of the 8 defendants. Whilst recognising that this was not a perfect solution, the risk of individual claims falling away due to a lack of financial resources of the claimants was a factor in the court’s decision.

The FCA has been vocal in its criticisms of legal claims management firms offering collective redress, arguing consumers do not need to incur fees when their redress scheme is available. In response, there has been criticism that the FCA’s scheme favours financial services firms over consumers. Claims management firms may enjoy a boost from both the delay to the FCA’s scheme and this recent decision.

The Financial Ombudsman Service

The Financial Ombudsman Service reported receiving over 73,000 complaints by 2025. They have stated that from March this year they would not take on any cases which fall under the FCA’s redress scheme. They raised their concerns their ability to handle mass claims in a Call for Input in 2024.

Keith Blizzard, BL

July 2026

Temple Square Chambers specialises in UK, EU and international financial services and regulation. Its members are experienced in advising on large regulatory projects, regulatory authorisations, restructurings and contract review and remediations.

Keith Blizzard has over 20 years’ experience in financial services and specialises in EU and UK regulation.

© 2026 Temple Square Chambers Limited

[1] Johnson v FirstRand Bank Limited (trading as Motonovo Finance); Wrench v FirstRand Bank Limited (trading as Motonovo Finance) and Hopcraft v Close Brothers Limited [2025] UKSC 33, [2024] EWCA Civ 1282.

[2] [2026] EWCA Civ 831; [2025] EWHC 490 (KB).