Clydesdale Financial Services Limited granted permission to appeal to the Court of Appeal

Barclays Partner Finance trading as Clydesdale Financial Services Limited (‘Barclays’) have been granted permission to appeal a High Court decision in which the High Court sided with the Financial Ombudsman Service (‘FOS’) against Barclays.

In that decision (R (Clydesdale Financial Services Ltd) v Financial Ombudsman Service Ltd [2024] EWHC 3237 (Admin)) the High Court found no misapplication by the FOS of the applicable law in the context of a motor finance discretionary commission arrangement (‘DCA’) complaint.

This follows a decision published against Barclays by the FOS on 11 January 2024 (decision DRN-4326581) in which Barclays were directed to pay compensation to a Complainant who was charged a higher interest rate on their motor finance agreement owing to the operation of a DCA.

Barclays challenged that decision by way of Judicial Review on the following grounds:

Ground 1: The Ombudsman erred in law in determining that the Broker should have disclosed the commission arrangement to the Broker

Ground 2: The Ombudsman reached an irrational result on the value of the complaint, arguing that the Complainant should receive no compensation as they suffered no loss

Ground 3: The Broker was not Barclays’ agent and Barclays could not be responsible for the acts and omissions of the Broker, regarding commission.

The High Court dismissed all three of Barclays’ grounds of challenge.

Barclays have since sought permission to appeal to the Court of Appeal, which was granted on 24 December 2024. The Court of Appeal decision will undoubtedly be of relevance to the many thousands of motor finance commission complaints currently being brought against motor finance lenders.

Author – Harry Grimshaw, Motor Vehicle Finance Litigation Manager