UK's highest court largely overturns ruling on auto finance payments

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UK's highest court largely overturns ruling on auto finance payments

2025-08-02 03:08 Last Updated At：03:11

LONDON (AP) — Britain's highest court Friday largely overturned a lower court's ruling that certain car finance agreements were unlawful, a decision likely to bring a sigh of relief among lenders and limit the scale of compensation payments.

A Supreme Court panel of five judges sided with lenders on two of the three issues at hand, finding that they are effectively not liable for hidden commission payments to dealers. It said there was no bribery involved in the purchase arrangements and that dealers did not have a legal obligation that required them to act only in the customers’ interest.

“No reasonable onlooker would think that, by offering to find a suitable finance package to enable the customer to obtain the car, the dealer was thereby giving up, rather than continuing to pursue, its own commercial objective of securing a profitable sale of the car,” the judges said.

As a result, lenders are expected to be spared making compensation payments to millions of people who had taken out car finance plans that industry experts said could have cost them tens of billions of pounds. Banks have been preparing to pay out compensation with Lloyds, the U.K.’s biggest car finance provider through its Black Horse arm, having set aside over 1 billion pounds ($1.3 billion).

The decision was made after the stock markets had closed to prevent disorderly trading of firms linked to the car finance market.

The decision will likely be welcomed by the financial services sector, which has been rocked over the past decade by a series of scandals, notably in relation to the improper selling of payment protection insurance, or PPI, on loans.

The sector has also worried that it could face additional claims regarding the sale of other financial agreements, for example with regard to deals offered for the purchase of household appliances, such as kitchens.

The decision by the Supreme Court has diminished that fear, industry experts said.

“The risk of claims in other finance arrangements where commission payments are made will also have significantly reduced as a result,” said Andrew Barber, Financial Regulatory Partner at legal firm Dentons.

Last October, the Court of Appeal found that three motorists, who all bought their cars before 2021, had not been told either clearly enough or at all that the car dealers, acting as credit brokers, would receive a commission from the lenders for introducing business to them and should thereby receive compensation.

Two lenders, FirstRand Bank and Close Brothers, took the dispute to the Supreme Court, saying in a three-day hearing in April that the decision was an “egregious error.” Industry regulator, the Financial Conduct Authority, also told the U.K.’s highest court that the Court of Appeal ruling went "too far.”

Following the decision, the FCA said it welcomed the clarification and that it will be working through the weekend to analyze the judgment and "determine our next steps.”

It added that it will address with interested parties on a possible redress scheme to compensate customers before markets open on Monday.

"Our aims remain to ensure that consumers are fairly compensated and that the motor finance market works well, given around 2 million people rely on it every year to buy a car," it said.

This story was updated earlier to correct the number of judges on the court panel from three to five.

Trump threatens to use the Insurrection Act to end protests in Minneapolis

MINNEAPOLIS (AP) — President Donald Trump on Thursday threatened to invoke an 1807 law and deploy troops to quell persistent protests against the federal officers sent to Minneapolis to enforce his administration's massive immigration crackdown.

The threat comes a day after a man was shot and wounded by an immigration officer who had been attacked with a shovel and broom handle. That shooting further heightened the fear and anger that has radiated across the city since an Immigration and Customs Enforcement agent fatally shot Renee Good in the head.

Trump has repeatedly threatened to invoke the Insurrection Act, a rarely used federal law, to deploy the U.S. military or federalize the National Guard for domestic law enforcement, over the objections of state governors. In 2020, for example, he threatened to use the act to quell protests after George Floyd was killed by Minneapolis police, and in recent months he threatened to use it for immigration protests.

“If the corrupt politicians of Minnesota don’t obey the law and stop the professional agitators and insurrectionists from attacking the Patriots of I.C.E., who are only trying to do their job, I will institute the INSURRECTION ACT, which many Presidents have done before me, and quickly put an end to the travesty that is taking place in that once great State,” Trump said in social media post.

Presidents have invoked the law more than two dozen times, most recently in 1992 by President George H.W. Bush to end unrest in Los Angeles. In that instance, local authorities had asked for the assistance.

“I’m making a direct appeal to the President: Let’s turn the temperature down. Stop this campaign of retribution. This is not who we are,” Gov. Tim Walz, a Democrat, said on X.

Minnesota Attorney General Keith Ellison said he would challenge any such action in court. He's already suing to try to stop the surge by the Department of Homeland Security, which says officers have arrested more than 2,500 people since Nov. 29 as part of an immigration operation in the Twin Cities called Metro Surge.

The operation grew when ICE sent 2,000 officers and agents to the area early in January. ICE is a DHS agency.

In Minneapolis, smoke filled the streets Wednesday night near the site of the latest shooting as federal officers wearing gas masks and helmets fired tear gas into a small crowd. Protesters responded by throwing rocks and shooting fireworks.

Demonstrations have become common in Minneapolis since Good was fatally shot on Jan. 7. Agents who have yanked people from their cars and homes have been confronted by angry bystanders demanding they leave.

“This is an impossible situation that our city is presently being put in and at the same time we are trying to find a way forward to keep people safe,” Minneapolis Mayor Jacob Frey said.

The American Civil Liberties Union of Minnesota filed a class-action lawsuit on behalf of three people who said they were questioned or detained in recent days. The lawsuit says two are Somali and one is Hispanic; all three are U.S. citizens. The lawsuit seeks an end to what the ACLU describes as a practice of racial profiling and warrantless arrests. The government did not immediately comment.

Similar lawsuits have been filed in Los Angeles and Chicago and despite seeing initial success, have tended to fizzle in the face of appeal. In Chicago, for example, last year a judge ordered a senior U.S. Border Patrol official to brief her nightly following a lawsuit by news outlets and protesters who said agents used too much force during demonstrations. But three days later, an appeals court stopped the updates.

Homeland Security said in a statement that federal law enforcement officers on Wednesday stopped a driver from Venezuela who is in the U.S. illegally. The person drove off then crashed into a parked car before fleeing on foot, DHS said.

Officers caught up, then two other people arrived and the three started attacking the officer, according to DHS.

“Fearing for his life and safety as he was being ambushed by three individuals, the officer fired a defensive shot to defend his life,” DHS said. The confrontation took place about 4.5 miles (7.2 kilometers) from where Good was killed.

Police chief Brian O’Hara said the man who was shot did not have a life-threatening injury. O’Hara's account of what happened largely echoed that of Homeland Security, which later said the other two men were also in the U.S. illegally from Venezuela.

The FBI said several government vehicles were damaged and property inside was stolen when agents responded to the shooting. Photos show broken windows and insults made with paint. A reward of up to $100,000 is being offered for information. The FBI’s Minneapolis office did not immediately reply to messages seeking more details.

St. Paul Public Schools, with more than 30,000 students, said it would begin offering an online learning option for students who do not feel comfortable coming to school. Schools will be closed next week until Thursday to prepare for those accommodations.

Minneapolis Public Schools, which has a similar enrollment, is also offering temporary remote learning. The University of Minnesota will start a new term next week with different options depending on the class.

Madhani reported from Washington, D.C. and Golden reported from Seattle. Associated Press reporters Sophia Tareen in Chicago; Bill Barrow in Atlanta; Rebecca Santana in Washington; and Ed White in Detroit contributed.