Finance

Lenders offering motor finance are likely to have been inundated with claims from customers in relation to loans arranged by vehicle dealers, following the Court of Appeal's landmark decision in Hopcraft, Johnson and Wrench in October 2024. The Court held that it was unlawful for car dealers (who acted as brokers) to receive a commission from a lender providing motor finance without obtaining the customer’s informed consent to the payment. The court held that, in each of three cases brought by aggrieved individuals, the lender was liable to compensate the consumer for the commission that had been paid by the lender to the dealer. Read our briefing on the impact of consumer claims for rebate of commission on speciality finance transactions.

At the time of publication, we await the judgment of the Supreme Court, which heard the appeal at the beginning of April. Watch this space for more.

Finance documents frequently include so called "one-sided" (or asymmetric) jurisdiction clauses, whereby the parties submit to the "exclusive" jurisdiction of (e.g. English) courts, but finance parties reserve themselves the option to bring proceedings in any other courts which may have jurisdiction. Lenders like such clauses, because it allows them to wait until a dispute arises before deciding where to bring proceedings. However, Brexit has limited their effectiveness.

The 2005 Hague Convention, to which the UK acceded post-Brexit, only provides for recognition of submission to jurisdiction and enforcement of a judgment given by a court of a contracting state designated in a genuinely "exclusive" choice of court agreement. This has led to parties in some transactions opting for an "exclusive" jurisdiction clause, effectively favouring certainty over flexibility.

From 1 July 2025, the 2019 Hague Convention comes into force between the UK, the EU (except Denmark) and other states] . It provides for recognition and enforcement of a judgment given by a court of a contracting state not designated in an "exclusive" choice of court agreement. This includes a judgment on a document with no jurisdiction clause or one with a "one-sided" jurisdiction clause. For more, go to Dispute resolution.