Marking a significant development for motor finance commission claims, a High Court ruling has paved the way for thousands of motor finance consumers to move forward as group actions, following a successful appeal by Barings Law.
The Appeals relate to eight group actions which were first issued by Barings Law in November 2022. However, in mid-2023, His Honour Judge Worster at the Birmingham County Court ordered that each claimant must issue a separate claim form within three months or be struck out.
Given that more than 5,000 claimants had the potential to be impacted by this ruling, Barings Law requested, and were granted, permission to appeal. Following the hearing of the appeals in February 2025, Mr Justice Ritchie, sitting in the King’s Bench Division of the High Court in Birmingham, found in favour of the Appellants.
Per the Sealed Judgment, dated 4th March 2025, the eight claim forms will not be severed and will remain as group actions with a hearing date to be set in the near future to determine the consequential orders.
For the claimants included in the eight group actions, the Judgment has positive implications and could encourage early settlements from the Defendants to these claims, including major finance companies such as Black Horse, BMW Financial Services (GB Limited) and Volkswagen Financial Services (UK) Limited.
Had the appeals been unsuccessful, each of the claimants would have been required to individually issue their claims in County Courts across the UK. Barings Law argued that this ruling would not have only created a significant administrative and financial burden on both the Courts and the Claimants’ lawyers, it would have created a risk of inconsistency in how the individual claims would be resolved, both in terms of likelihood of success and the time required for a resolution.
Ritchie J agreed, citing the number of Claimants, and the fact the claims related to the same or similar matters, and all contained the same cause of action. He said that separate disposal “would lead to conflicting decisions”. Omnibus claims would also likely require fewer judge hours.
With the eight group actions now remaining in Birmingham, to be managed by HHJ Worster sitting in the County Court, we believe that Ritchie J has opted for a more logical and less chaotic approach towards the progression of these claims.
The wider impact of the Judgment, which is the first High Court precedent specifically relating to group actions concerning motor finance commission claims, will see significant implications for both Claimants and their lawyers about how these claims can move forward.
The Judgment will be recognised as promoting access to justice for consumers, particularly as “there is an imbalance of financial power between individual claimants and the defendants” according to Ritchie J when announcing the decision.
To date, consumers have faced barriers in their ability to seek compensation for being mis-sold car finance and falling victim to costly hidden commission arrangements. As vast amounts of affected consumers are potentially entitled to amounts on average of £1100, there has been a difficulty in proceeding to trial on such claims, owing to the cost of legal representation and barristers’ fees.
Where claims are issued in groups, as part of group actions, this makes it more viable for claims to be issued and barristers to be instructed, with the associated costs being spread across all claimants in the group. This means that, while costs could be higher for defendants, it will be lower for claimants, granting them easier access to justice. The Judgment is therefore welcomed in facilitating this approach.
It remains to be seen exactly how the industry will react to this Judgment. It has opened the door for more finance group actions to be issued with their lawyers carefully following the wording of Ritchie J’s Judgment and has the potential to affect other consumer litigation claims of a similar nature.
As a firm, we are delighted that our commitment to making justice accessible for all has prevailed. The fight is not over regarding motor finance commission claims, but this Judgment gives us hope that the voices of consumers will be heard.
Access the full Judgment here.
Co-Author: Harry Grimshaw – Motor Finance Commission Litigation Manager
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