In the last few months there have been a number of significant developments with motor finance commission claims, both within Barings and across the industry.

Perhaps the most significant development came on 25th October when the Johnson and Others v FirstRand Bank Limited and Others [2024] EWCA Civ 1282 Court of Appeal Judgment was published

The Court of Appeal held that, in cases in which motor finance lenders paid commissions to credit brokers, but the customer was not aware of the amounts or how they were calculated, those commission payments would breach the duty the brokers owed to their customers, referred to as a ‘fiduciary duty’. As the lenders paid the commissions, they were held responsible and were ordered to pay those commissions to their customers.

It appears that decision will be appealed to the Supreme Court, and is likely to be heard in 2025. In the meantime, the decision represents a binding precedent which confirms that credit brokers owe fiduciary duties to financially unsophisticated borrowers and motor finance lenders can, and will, be held liable as accessories to the breach of those fiduciary duties when making undisclosed commission payments.

Separately, the Barclays judicial review of Financial Ombudsman Service (FOS) decision DRN-4326581 was heard by the High Court in mid-October. The decision, published alongside the Financial Conduct Authority (FCA) statement in January, saw the Ombudsman uphold the complaint made, directing Barclays to pay compensation to the complainant.

Should Barclays be unsuccessful in judicially reviewing the decision a further binding authority will exist in which the use and operation of Discretionary Commission Arrangements is deemed to be unlawful.

In terms of the progression of our clients’ claims, we have been issuing individual commission claims at courts up and down the country, following our clients instructing us to do so. We have a number of trials coming up in early 2025 and our legal team is eager to test our legal arguments in court.

We will also be back in court in early 2025 for our group actions, with our appeals being heard during that time. We remain optimistic that those appeals will be successful, even more so considering the positive judgments being published in 2024 regarding motor finance claims and the bringing of group actions on omnibus claim forms.

Having taken stock of the FCA announcement and the accompanying consultation paper, the firm will be litigating individual claims concerning motor finance discretionary commission arrangements. We have been issuing our clients’ claims against a variety of motor finance lenders including Mercedes-Benz Financial Services UK Limited and RCI Financial Services Limited.

In terms of the FCA consultation paper, we provided our feedback to the FCA at the end of August. The FCA have explained that they will publish a further paper this month, summarising and commenting on the feedback provided.

As the year draws to a close, the Motor Vehicle Finance Affordability team have been reflecting on the successes of the past year.

In 2024 alone we have received more than £1,000,000 in total settlement offers against 14 different lenders with our average refund being £4,900.

We are proud to have helped so many people to make successful claims for compensation following vehicle finance providers approving agreements without carrying out reasonable and proportionate checks on their customers’ affordability.

In the past year we have submitted hundreds of claims to the FOS after defendants failed to uphold the claims made. Following an FOS investigation, Barings Law received more than £180,000 in total settlement offers.

At Barings Law we understand the stress that financial hardship places on motorists, as hundreds of our clients have confirmed that being trapped in an unaffordable finance deal affected their mental health and wellbeing.

In the new year we look forward to continuing our efforts to ensure finance providers are held reasonable for causing long-term financial and/or mental harm to their customers.

Carphone Warehouse

A confidential agreement was reached with the defendant, and this matter has now concluded. 

Zellis/MoveIT

This case has now been filed in the High Court in London. We are actively engaging with Zellis’ legal representatives, who maintain their denial of liability.  

They have made a request for additional information about the claimants. Therefore, we are currently preparing an updated list to facilitate the progression of the case. 

Capita

Capita continues to deny liability.  

In an attempt to get Capita’s legal representatives to provide the claimants with clear and concise information about the nature of the breach, we have filed an application to the court formally requesting this.  

As we have previously informed, the case has been issued in the High Court and the date for the hearing has been set for June 2025. 

In the meantime, we continue to onboard clients who have been affected by this massive breach.  

Shared Services Connected Ltd / Ministry of Defence

We are currently waiting for SSCL to provide an update to the affected personnel confirming what data was impacted and more information about the findings of their cyber investigation.  

In the interim, we are preparing to issue this case in the High Court. We are aiming to finalise this and issue proceedings before the new year.  

South Staffs Water

South Staffs Water had initially admitted liability. However, in their most recent correspondence, they clarified that they do accept responsibility for the breach but not for the distress it caused the claimants.  

In response to this, we have now issued proceedings in the High Court.  

Arnold Clark

We continue to correspond with Arnold Clark’s legal representatives, who continue to assert that all appropriate safeguards were in place at the time of the breach and therefore, they are not admitting liability.

DSG Ltd

The claimants have discontinued their claim against the defendant. The terms of this remain confidential.  

Radius Cases

These cases are still progressing towards settlement, with most being at the stage where quantum is being discussed with the insurers. The majority of the disputes are in relation to issues such as re-triggers and periods of loss, but ultimately, we anticipate that settlement will be reached in all cases.

Premises Cases

The Court of Appeal handed down its judgment in the ‘At the Premises’ appeals at the start of September. The claimants were successful, with the decision confirming that the correct approach to understanding the insured risk and to applying the subsequent test of causation is to follow the same principles set by the Supreme Court in the FCA test case. Furthermore, the decision held that knowledge of the specific incidence of disease at the insured premises by the relevant authorities is not required to trigger cover, while also defining that ‘public authority’ incorporates all levels of local and national government.

Two of the insurers involved are now seeking permission to appeal to the Supreme Court and, while this is with the court to consider, we are proactively contacting all other affected insurers to seek their engagement over issues of evidence and quantum with a view to narrowing the issues pending the decision of the Supreme Court. Our aim is to move all affected cases closer to settlement without the need for further litigation, although how quickly this can occur will be largely down to the attitude of the insurers, who may elect to await the Supreme Court’s decision before engaging further, though a couple have so far suggested that they may be willing to do so.

Public Emergency Cases

Barings are still pressing forward with numerous different categories of ‘Public Emergency’ type policies which are at varying stages of progression.

Current Legislation

These cases are moving closer to settlement. One cohort of claims is subject to a stay of the litigation to allow settlement of all claims to be achieved and, in another cohort, we are discussing policy triggers with the insurers and seeking to put forward loss valuations for agreement.

AA Clauses

We have made good progress with these claims over the quarter, with most insurers now contemplating settlement in principle but disputing issues such as re-triggers. As such, our focus here is on quantifying losses and formulating our arguments over re-triggers with a view to entering into settlement negotiations.

Denial of Access / Public Emergency Clause

We have a specific clause which features both a DoA and PE element in which we are seeking determination of preliminary issues around policy construction. We have just received notification that a trial date of October 2025 has been set.

Denial of Access Cases

One cohort of claims will proceed to a Costs and Case Management Conference in January 2025 at which we will be seeking a preliminary issues trial on the issue of policy construction to be listed. In terms of a further cohort, we have received commercial offers but are looking to quantify the losses with a view to achieving settlement at a higher level.

While the Court of Appeal decision on the ‘incident’ wording in the case of International Entertainment Holdings v Allianz was in favour of the insurers, the other claims that we have with similar wording are wider in their scope and so, once the stays are lifted in December and January we will be proceeding with the litigation.

Bomb Hoax Clause Cases

These claims are continuing to progress positively, with a number of settlements having been achieved on one cohort of the claims with further offers being received in respect of some of the unresolved claims. Our main focus in these claims continues to centre around financial evidence gathering with a view to presenting all claims to the insurers for consideration and payment.

Quarterly Settlement Performance

During the period September to November we agreed interim or final damages of nearly £330,000 on behalf of 22 clients, with a number of other offers having been received from insurers. These are currently being reviewed and discussed with clients.

Looking Ahead – 2025

On the litigation front, 2025 will potentially be a busy year, predominantly as a result of the ‘At The Premises’ test litigation and the impending decision of the Supreme Court. Once the policy construction issues become settled law, if the insurers are unwilling to enter into settlement discussions and require full consideration of evidence and quantum then the current stays of proceedings will be lifted and cases will begin to progress through the court timetable. Alternatively, we could see the advent of significant quantum/settlement discussions in the event that the insurers indicate a willingness to deal with the claims.

Elsewhere, we have had a number of Case Management Conferences (CMC) during the second half of 2024 which have timetabled some cohorts of claims through to trials in late 2025 or early 2026, and we expect further CMCs to be listed throughout 2025.

One major area of focus in 2025 will be the resolution of claims for payment of costs by defendants, which will become increasingly prevalent as further claims continue to settle. 

We are excited to share the latest developments in the ongoing pursuit of justice for borrowers affected by undisclosed commission (UDC) payments. While challenges persist, our determination remains strong, and recent progress provides reason for optimism.

Last year, test cases were presented in court to address undisclosed commissions. While courts have raised certain obstacles to awarding damages in cases involving secured loans, we view this as an opportunity to refine our approach and push for positive change. 

Some of the issues raised include:

• Borrowers often being informed in loan documentation that brokers would receive a commission upon loan completion.
• The courts believing that claims could have been brought earlier after borrowers reviewed their loan documents.
• Secured loans often leading to benefits for borrowers due to property price increases.
• Claims against new lenders (to whom loans were transferred during the lifetime of the loan) being considered invalid due to the fact they were not involved in the payment of the commissions.

Despite these hurdles, we have made significant strides. 

We are thrilled to announce a significant breakthrough, as permission has been granted to appeal a key UDC case. This appeal, scheduled for 17th January, focuses on half-secret commission claims. Our aim is to set a precedent allowing borrowers to claim against the new lenders to whom loans were transferred, ensuring accountability and justice.

In addition to this appeal, a recent Court of Appeal decision on commissions, Johnson v Firstrand Bank Limited [2024] EWCA Civ 1282, has led us to be cautiously optimistic. While it is still too early to see how this will directly impact UDC claims, we are encouraged by the potential for favourable outcomes in future cases.

We have already achieved notable successes, including favourable settlements in Payment Protection Insurance (PPI) commission cases. However, our mission is to achieve broader reform in UDC claims to ensure lenders are held accountable for any wrongdoing.

While the journey toward establishing a legal precedent may take time, we are steadfast in our efforts and optimistic about the positive impact these developments will have. Your patience and trust mean everything to us as we continue to work tirelessly on your behalf.

We will provide further updates as they arise and would like to thank you for your ongoing support as we navigate this important and evolving area of law.

Barings Law remains steadfast in its commitment to representing clients who have suffered financial losses due to the failures of FCA-regulated parties during the transferring of their pension benefits.

Many clients have faced significant financial setbacks after receiving improper advice on transferring their pension benefits. Barings Law’s dedicated team of legal professionals is working diligently to ensure that these clients receive the justice and compensation they deserve.

We have successfully secured compensation for a plethora of clients, ranging from six-figure cash settlements and re-instatements of pension benefits reflecting the current market value. We are proud to say that we have played a crucial role in recovering and restoring retirement benefits and Barings Law continues to offer its services to those in need, ensuring that justice is served, and financial stability is restored.

We are pleased to announce that the Banking Claims Department is continuing to strive in successfully representing clients who have fallen victim to sophisticated scam operations, resulting in significant financial losses. The firm’s dedicated team of legal experts worked tirelessly to recover lost funds and provide much-needed support to those affected.

The scams, which targeted individuals through various deceptive means, left many in financial distress. However, thanks to the relentless efforts of Barings Law, victims have seen a positive outcome. The firm’s comprehensive approach included thorough investigations, collaboration with financial institutions, and strategic legal actions.

Our multiple victories not only highlight the importance of legal representation in combating fraud but also serves as a reminder for individuals to remain vigilant against such scams. Barings Law continues to offer its services to those in need, ensuring that justice is served.

Barings Law continues to represent thousands of clients and pursue vast amounts of irresponsible lending cases over numerous product types.

We are pleased to announce that due to continued success, we have now extended our product list to include claims relating to the suitability of unsecured personal loans.

This quarter, we have seen a dramatic increase in settlement offers received from numerous lenders across the following credit facility types; credit cards, store cards, catalogue cards, overdraft facilities and unsecured personal loans.

Further to this, we are continuing to liaise with third-party redress schemes such as the FOS, who have now provided numerous determinations against lenders in favour of our clients. We are currently awaiting the findings of a number of cases to determine whether our clients are eligible for a refund of interest and associated charges under their agreements through breaches of the relevant regulatory rules and guidance.

Our team is committed to thoroughly investigating each case to identify failings by lenders – and ensuring they accountability – when providing suitable credit facilities to consumers. We work diligently to ensure our clients receive the compensation they are due, helping to restore their financial security.

We look forward to continuing our work in the new year.

This year, we are proud to share a significant milestone in our Immigration Department: a 90% success rate in handling immigration cases. This achievement underscores our dedication to delivering exceptional legal services and ensuring justice for our clients.

Key Highlights of Our Work:

Securing Immigration Bail for Clients

We successfully handled more than eight bail applications in the last quarter, ensuring our clients were granted bail and could avoid prolonged detention.

Immigration bail allows individuals detained under immigration powers to be released from custody while their case is being resolved. This ensures they can reunite with family, access critical support and prepare their case with dignity. Our efforts focus on demonstrating that detention is unnecessary and unjustified in our clients’ circumstances, enabling them to return to their lives while adhering to the conditions set by the Home Office.

Supporting Asylum Seekers

We continue to provide comprehensive legal support for clients navigating the complex asylum process. From offering sound legal advice to helping them gather and present the required evidence for their claims, we ensure their voices are heard and their human rights are protected.

Defending Against Unlawful Removal

We recently won a pivotal case in which we prevented the Home Office from unlawfully removing an asylum seeker from the UK. Thanks to our intervention, our client was granted leave to remain, allowing him to stay in the UK with his son and partner. This case was recognised in the media, highlighting both our 90% success rate and our commitment to standing up for justice.

Whether it’s advocating for families to stay together, securing bail for those in detention, or ensuring fair treatment for asylum seekers, we are dedicated to achieving the best possible outcomes for our clients.