S&U PLC (LSE:SUS) the specialist lender, has called for 'an expeditious resolution' to the issue of motor loan commissions given its implication for the financial services industry.
Rulings by the Appeal Court on Friday "unexpectedly overturned judicial positions on the duties of motor dealers, credit brokers and lenders in commission" on purchase loans, sparking warnings from lenders such as Lloyds Bank and Close Bros.
S&U, which owns car loan provider Advantage Finance, said it is aware that the rulings have been the subject of urgent discussions between the FLA, the FCA and the Government and wants early clarity over the situation.
In its ruling, the Court of Appeal recognised the 'tensions' between previous lower court judgements on the extent of commission disclosure in the previous cases of 'Hurstanger' and 'Wood'.
The Court also called for 'A definitive announcement to be made by the Supreme Court about the circumstances in which the payment of a commission …. will give rise to a liability …. on the part of the payer.'
Given that, It is "therefore unsurprising" that the plaintiffs (Close Bros, RandBank) intend to appeal the judgement to the UK Supreme Court, said S&U.
“In the meantime, S&U notes that these decisions do not specifically relate to 'difference in charges' models of commission (currently the subject of an FCA review) in which Advantage Finance has never been engaged.”
Shares in S&U rose 0.6% to 1,730p.