The UK’s highest court on Tuesday began a hearing to determine whether controversial car loans were unlawful, in a case that could cost banks billions of pounds in compensation.
Banks are appealing a landmark ruling by a Court of Appeal in November that deemed it unlawful for car dealers to receive a commission on loans without sufficiently informing borrowers.
It is estimated that millions of drivers would be eligible for compensation should the Supreme Court side with borrowers in the three-day hearing.
The loans, which were around for 14 years from 2007, incentivised car dealers to set higher interest rates in return for a bigger commission from the banks.
Britain’s financial watchdog has made the commissions illegal.
The Supreme Court will consider two cases against South African lender FirstRand bank and one against British bank Close Brothers.
Outside the Supreme Court…
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