Barclays offers early car finance compensation

Barclays has taken a significant step as one of the first major lenders to initiate car finance compensation payouts. However, Kevin Durkin, a motor finance lawyer, expresses concerns regarding the fairness and adequacy of these offers. Durkin, who represented claimant Marcus Johnson in a successful Supreme Court case over a year ago, warns that the compensation will only reach a small percentage of drivers. He emphasises that anyone receiving an offer from Barclays should not simply accept it, as they may be entitled to more.

“It is good to see the impact of Marcus Johnson’s claim, which we took to the Supreme Court and won more than 12 months ago, being recognised. But I continue to have real reservations that fair compensation will be offered, and these are only heightened by reports that just a small number of claimants will receive what could be lowball offers. I fear this is crumbs from the table, for some customers who are highly likely to be owed more, while the vast majority will receive no offer at all," Durkin stated.

His comments highlight a critical issue, as he suggests that the proposed Financial Conduct Authority (FCA) redress scheme, despite being in the works, may not adequately address the needs of affected drivers. “From our experience acting for consumers in motor finance claims, we believe that even if the FCA redress scheme comes into force, more than 45% of claims will still need to be pursued through litigation, whether because they fall outside the scheme, are subject to its caps, or are worth more than the compensation it offers.”

Durkin's insights reveal a potential discrepancy between the FCA's average proposed redress of £829 and the £1,800 average secured through the court process for clients represented by his firm. He adds, “Anyone who receives an offer from Barclays should not simply accept it, as they could be entitled to more. The court route remains open, and drivers do not have to settle for less.”

As Barclays moves ahead with early settlement offers, the broader £9 billion FCA motor finance redress scheme remains stalled amid legal challenges, underscoring the complexity and urgency of the situation for affected drivers. The upcoming tribunal hearing in February 2027 may further shape the landscape of compensation for motor finance consumers.