Moody’s, the credit ratings agency, has warned that a recent court decision could potentially cost banks up to £30 billion in consumer compensation.
The ruling, delivered in October, took lenders by “considerable surprise,” according to documents submitted to the Supreme Court by FirstRand and Close Brothers. The banks, represented by the law firm Eversheds Sutherland, are seeking appeal permission from the U.K.’s highest court, citing the “profound” ramifications of the decision. They argue this judgment has far-reaching implications not only for the motor finance industry but also for consumers and potentially other sectors beyond car finance.
The lenders are pushing for a swift resolution, requesting an “expedited” review of their appeal application and planning to pursue a fast-tracked hearing if permission is granted.
The Court of Appeal previously suggested that the Supreme Court should reject the appeal attempt, but this advice remains non-binding. The banks’ legal filing contends that the Court of Appeal’s conclusions in the case were unexpected and will set a precedent with “several startling consequences.”
“This ruling will inevitably have binding ramifications for lower courts,” the banks argued in their submission. “Its impact on the motor finance industry is both extensive and significant.”
Additional reporting by Russell Hargrave.
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