Chancellor Rachel Reeves blocked from intervening in car finance scandal

An attempt by Chancellor Rachel Reeves to intervene in the ongoing car finance scandal has been blocked by the Supreme Court, with law firms applauding the decision as "welcome news”. 

Last month, the Treasury filed an application to influence the outcome of an upcoming Supreme Court appeal in April, following a Court of Appeal ruling that found car finance firms were breaking the law by secretly paying dealers commission without the consent or knowledge of the buyer – otherwise known as discretionary commission agreements (DCAs).

The case, which experts believe could open the door for as much as £30 billion in payouts, could see almost anyone that’s purchased car finance in the UK between now and 2007 eligible for compensation, something that the Treasury warns has the “potential to cause considerable economic harm and could impact the availability and cost of motor finance for consumers”.

With this in mind, the Treasury filed an application in January to intervene in April’s ruling, however, this has now been rejected by the Supreme Court. While no official reasoning has been issued, it’s worth noting that both the Financial Conduct Authority and the National Franchised Dealers Association were granted permission to intervene, with the Court’s rules on intervention stating that applications may be rejected if they are not “advancing the intervener’s argument on a legal issue” and simply “repeating material that is in the parties’ written cases”.

In a statement, HM Treasury said: “We respect the Court's decision to not grant our application to intervene... and will monitor it closely.” On the other hand, the decision was welcomed by law firms; Elizabeth Comley, the chief operating officer of Slater and Gordon, one of the main law firms involved in the landmark Volkswagen dieselgate scandal, said the Treasury’s rejection by the Supreme Court is “welcome news”.

“The consumers we represent deserve accountability and redress when they have been wronged and it is crucial that there remains a clear separation of powers in matters of this magnitude,” Comley continued. “The recent Supreme Court decision that the government cannot be listed as an interested party in the mis-sold car finance hearing underscores the need for decisions to be made independently and transparently, without political influence.”

As mentioned, the Supreme Court appeal case is set to go ahead in April, with a final decision expected in May.

Have you been impacted by the ongoing car finance scandal? Let us know in the comments below...