LONDON (dpa-AFX) - Lloyds Banking Group (LLD.DE, LLOY.L, LYG) announced that it has undertaken an initial assessment of the implications following the Supreme Court's judgment delivered on 1 August 2025 in the appeals brought by Wrench, Johnson, and Hopcraft.
The company noted that the judgment overturned the Court of Appeal's decision regarding fiduciary duties and bribery, ruling that motor dealers acting as credit brokers do not owe fiduciary duties to their customers and that commission payments in this context do not constitute bribes.
In the Johnson case, the Supreme Court also considered whether an unfair relationship existed under the Consumer Credit Act 1974. It concluded that the test for unfairness is highly fact-specific and must account for all relevant circumstances. The Court found unfairness in Mr Johnson's case and awarded a refund of the commission paid, plus interest at a commercial rate.
Lloyds noted that its existing provision was established using a range of scenarios to reflect uncertainties around key assumptions-including potential Supreme Court outcomes, regulatory responses, and redress implications. While the judgment provides greater clarity, several uncertainties remain. The Group continues to assess multiple scenarios in its provisioning approach.
On 3 August, the Financial Conduct Authority (FCA) announced its intention to consult on an industry-wide redress scheme, expected by early October. The FCA also outlined additional factors for consultation The FCA's announcement follows Friday's ruling by the Supreme Court, on cases in which the FCA had intervened.
The FCA alleged that Many motor finance firms were not complying with rules or the law by not providing customers with relevant information about commission paid by lenders to the car dealers who sold the loans.
The FCA said Sunday that it would propose rules on how lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much. It will monitor if firms are following the rules and act if they're not.
The FCA currently estimates that most individuals will probably receive less than 950 pounds in compensation per agreement.
The FCA noted that the final total cost of any compensation scheme will depend on the final design. That makes it hard to estimate precisely. Any estimates are only indicative at this stage and may change. The FCA thinks it unlikely the cost of the scheme, including to run it, would be much lower than 9 billion pounds. And it could be higher, up to 18 billion pounds in some scenarios though the FCA doesn't believe these are the most likely.
Following its initial assessment and pending resolution of key uncertainties-particularly the FCA's proposed redress scheme-Lloyds Banking Group said Monday that it currently believes any change to the provision is unlikely to be material in the context of the Group. The provision will continue to be reviewed as further information becomes available, with updates provided as appropriate.
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