Millions of drivers who were mis-sold car finance may now be eligible for higher compensation payouts, after a landmark court ruling has paved the way for additional legal claims against lenders.
A ruling by the Court of Appeal of this morning (30 June 2026) has confirmed that thousands of motorists involved in a legal battle against eight major UK lenders will be eligible to progress their cases in the courts.
In response, Barings Law, the firm instrumental in securing the ruling, has announced the launch of a first-of-its-kind No Fee PCP model, which will mean motorists who join a legal claim against their lender will receive 100% of any damages recovered in a successful claim, with no deductions for legal fees.
Today’s ruling paves the way for millions more large-scale consumer claims to be issued against other lenders, meaning motorists who were previously expecting to receive compensation from the Financial Conduct Authority’s (FCA) delayed Motor Finance Redress scheme are being encouraged to pursue litigation instead, where Barings Law believes motorists could recover significantly more, without legal fee deductions from their damages.
The ruling
The Court of Appeal has today handed down judgment in the case of Angel & Ors v Black Horse Ltd, a long-running case concerning how 5,800 legal claims from motorists against eight motor finance lenders, including Black Horse, should be handled by the courts.
The ruling follows years of litigation in which Barings Law has pursued claims against some of the UK’s largest motor finance lenders, despite the significant financial and legal resources required to do so.
Instead of requiring that each of the thousands of affected motorists take out separate legal claims, the court has ruled that individuals who were unfairly sold vehicle finance agreements are allowed to join a mass-action case against their lender – known as an ‘omnibus claim’.
The decision is expected to influence how consumer claims are conducted across England and Wales, well beyond the motor finance sector.
Barings launches “No Deductions PCP”
Barings Law, which has been leading the case against Black Horse since 2022, called it “a decisive victory for motorists across England and Wales”.
Under a unique new model, the firm has told motorists that no deductions will be made from any compensation awarded through a successful omnibus claim, entitling them to receive 100% of the payout.
Robert Whitehead, Chairman of Barings Law, said:
“This ruling is a step towards securing true justice for millions of drivers who were mis-sold car finance over many years.
“Those consumers have been left waiting while lenders challenged every decision made by the regulator and the courts. Today’s judgment finally brings certainty and allows these claims to continue progressing through the courts as they always should have done.
“We’ve always believed that consumers should be able to pursue the strongest legal route available without unnecessary barriers, in order to recover the full compensation to which they are entitled.
“That’s why we’re launching “No Fee PCP” today. If we win a claim, our clients will receive 100% of their damages. We’ll limit our costs to whatever contribution the losing party pays towards their legal fees and, if our costs are higher than that, we’ll waive the difference so our clients keep every penny of the compensation they recover.”
Where next for the Redress scheme?
In March, the FCA announced a £9bn redress scheme aimed at motorists who were mis-sold car finance agreements, including PCP and HP, between 2007 and 2024.
Under the scheme, the average payout per motorist is expected to be £830.
But the scheme has been hit with issues including separate costly legal challenges from lenders and some consumer lawyers; the scheme is now unlikely to begin before 2027, but it could yet be cancelled altogether.
The FCA had previously warned motorists not to pursue legal action through law firms, saying that those who chose legal representation risked losing up to 30% of compensation in fees. Today’s Court of Appeal ruling, however, strengthens Barings Law’s position that motorists could secure higher compensation through a mass legal claim, while retaining 100% of any damages recovered under Barings’ “No Fee PCP” model.
Barings Law has set up an online form so that any affected individuals can check their eligibility and become part of a legal omnibus claim against their lender – with the guarantee that all damages secured will be paid out to the client, without any deductions.
Robert Whitehead added: “We have heard the frustration from motorists. Consumers have been told to wait, and then told to wait again, while legal challenges continue to delay the FCA’s proposed redress scheme. Meanwhile, the courts haven’t stood still.
“We’ve spent years investing in these cases because we believed consumers deserved better than being told to wait for a redress scheme that might never happen, when there’s already a clear legal remedy available to them.
“Consumers are once again being given the choice: allow the redress scheme to take its course, or allow legal experts to guide their case forward with the promise of full compensation.”
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