Solicitor & Director Jonathan Leach shares some insight into a recent case concerning undisclosed commissions in the motor finance industry.

Jonathan Leach

Director & Solicitor

The Supreme Court’s recent decision in Hopcraft and others v Close Brothers and others [2025] UKSC 33 has brought much-needed clarity to the law surrounding undisclosed commissions in the motor finance industry. This landmark ruling resolves years of judicial uncertainty and delivers a clear, coherent framework for determining when such commissions cross the line into unlawfulness.

The Court has now confirmed that not every dealer–customer relationship gives rise to fiduciary duties. Instead, the existence of such duties depends on the specific facts, particularly whether the dealer undertook to act in the customer’s interest in arranging finance, thereby creating a relationship of trust and confidence. This is a welcome reassertion of principle in an area where overexpansion of fiduciary concepts risked destabilising well-established commercial practices.

Crucially, the Court has also clarified that the tort of bribery requires secrecy—but that secrecy is not automatically defeated by the mere possibility that a commission might be paid. Dealers who provided customers with a notice stating that commission may be payable, even without disclosing exact amounts, had long appeared to many of us to be taking a reasonable and lawful approach. I am pleased the Supreme Court agrees.

This judgment offers much-needed reassurance to responsible actors in the motor finance sector. It reaffirms that disclosure of the potential for commission can be sufficient to negate the “secrecy” necessary to ground bribery claims, and that fiduciary or “disinterested” duties are not to be implied lightly. The decision also brings consistency to the intersection between tort, equity, and statutory rights under the Consumer Credit Act.

The ruling strikes the right balance between protecting consumers and respecting the boundaries of arm’s-length commercial relationships. Dealers and lenders now have clearer guidance on the steps needed to protect themselves from liability, and consumers benefit from a framework that distinguishes between mere non-disclosure and genuinely misleading conduct.