A High Court ruling has delivered a “major breakthrough” for thousands of motorists pursuing compensation over hidden commission charges in car finance agreements.
Manchester-based law firm Barings Law has successfully overturned a previous court decision, allowing more than 5,000 claimants to proceed with group legal action rather than filing individual cases. The ruling in Stuart Angel and Others v Black Horse Limited and Others could accelerate claims against major motor finance providers, including Black Horse, BMW Financial Services, and Volkswagen Financial Services.
The case centres on issues with motor finance commissions, first identified by the Financial Conduct Authority (FCA) in 2019, which found that car dealers and brokers had inflated interest rates on finance agreements to earn higher commissions—often without proper disclosure to consumers.
Barings Law was one of the first firms to challenge these practices. In November 2022, it issued eight omnibus actions in Birmingham, grouping thousands of claimants together. However, Birmingham County Court later ruled that these cases had to be split into individual claims, a decision that threatened to create substantial delays and costs for consumers.
Barings Law appealed, and on 4 March, Mr Justice Ritchie ruled in its favour, overturning the earlier decision and allowing the claims to proceed as omnibus actions. The judgment sets a High Court precedent on the use of group claims in motor finance commission cases, which could encourage further legal action against lenders accused of unfair practices.
Craig Cooper, Managing Director at Barings Law, called the ruling a “major breakthrough” for consumers.
“This decision removes a significant barrier to justice,” Cooper said. “Instead of facing lengthy and costly individual cases, claimants can now move forward as part of a group, making the legal process more efficient and accessible.”
The ruling is expected to have wide-reaching implications for the motor finance industry, potentially prompting early settlements and increasing scrutiny of lending practices.
A court date will be set in due course to determine the next steps in the litigation.
