Motor finance: Close Brothers calls on magic circle law firm for court battle
Close Brothers has swapped in a top magic circle law firm for its Supreme Court battle to overturn the landmark motor finance test case.
Last October, the Court of Appeal handed down a ruling that lenders did not receive consent from customers about the amount of commission they charged on motor finance.
The judgement caused a ripple effect in the lending sector, as many firms could be on the hook for £30bn of compensation, according to a Moody’s analyst.
The two lenders involved in the Court of Appeal case, merchant bank Close Brothers and South African lender FirstRand, are bringing their fight to the Supreme Court.
The banks applied directly to the Supreme Court after the Court of Appeal rejected their appeal.
The highest court in the UK had pressure from the Financial Conduct Authority (FCA) to quickly consider the issue. Last month, the Treasury revealed that it was asking the court to intervene on the case.
Speaking at the time, a spokesperson for the Treasury said: “We want to see a fair and proportionate judgement that ensures compensation to consumers that is proportionate to the losses they have suffered, and allows the motor finance sector to continue playing its role in supporting millions of motorists to own vehicles.”
The parties will be at the highest court in the UK on 1 April for a three day trial.
CityAM understands that while Close Brothers had Leeds-based law firm Walker Morris on for the Court of Appeal case, the lender has tagged in the big dogs for its day at the Supreme Court.
As confirmed by the lender’s representative, a team of lawyers from Slaughter and May will be representing the lender for its appeal.
The top British law firm is not cheap. For an Employment Tribunal case, it stated for “high complexity cases” its costs can range from £200,000 to £1.5m.
Elsewhere day, Slaughter and May revealed that it elected David Johnson to replace Deborah Finkler as the firm’s next managing partner.