Johnson Law Group wins significant PCP finance case

This particular case centred around a discretionary commission arrangement (DCA) which allowed the motor dealership to set the interest rate of the claimant's finance agreement and also collect commission from RCI based on this interest. The claimant contended that this commission arrangement was not properly disclosed, making the relationship between the parties unfair according to Section 140A of the Consumer Credit Act 1974. The ruling favoured the claimant, with the court deeming the finance agreement unfair in terms of the legislation, highlighting a significant imbalance since the dealership's right to earn commission was not revealed to the claimant. As a result, the claimant was awarded damages along with compensatory interest amounting to just under £400. 

This case emerges alongside increased scrutiny of past motor finance commission structures and follows the Financial Conduct Authority's proposed redress scheme aimed at consumers affected by hidden commission practices. RCI Financial Services defended the case to trial despite clear evidence that the commission structure was an illegal DCA and notably modest in value. It retained senior counsel for representation and brought in high-ranking executives from its London office to testify, although the judge was critical of their evidence. 

Jamie Patton, Managing Director of Johnson Law Group, remarked “The outcome of this case is an example of how some banks are prepared to ignore the guidance of their regulator and spend thousands defending PCP claims when they should be settling them. Whilst the FCA continues to claim that people don’t need lawyers to claim their compensation, the reality is they do – as this case demonstrates.” Johnson Law Group, based in Manchester and regulated by the Solicitors Regulation Authority, focuses on consumer and group litigation claims and has offices in major cities including London, Houston, New York and Chicago.