The supreme court on Monday also rejected separate intervention bids by the customer campaign group Consumer Voice, as well as the Financing and Leasing Association (FLA) lobby group, which represents car lenders ranging from large high street banks such as Barclays to the finance arms of manufacturers such as Ford and Volkswagen.
Judges at the supreme court on Monday rejected the chancellor’sapplication lodged last month that urged judges to avoid handing “windfall” compensation to borrowers harmed by allegedly secret commission payouts to car dealers that arranged the loans.
Rachel Reeves has been dealt a fresh blow after her controversial move to intervene in a high-profile supreme court case and curb a potential £44bn bill for lenders caught up in the car loan commissions scandal was rejected.
Lobby groups have warned that huge payouts over the scandal – which some analysts say could rival the payment protection insurance (PPI) mis-selling saga and collectively cost lenders up to £44bn – could push lenders out of business, force them to offer fewer loans or hike interest rates to cover their bills.
Reeves had tried to intervene after pressure from lenders, who have claimed that a massive compensation bill could disrupt the motor finance market.
