Johnson v FirstRand Bank Limited

• An in-depth explanation of the decision of the Court of Appeal in Johnson, including the key issues to be considered by the Supreme Court.
• Includes discussion of the potential impacts of the decision.

In 2021, the Financial Conduct Authority (FCA) took measures to ban arrangements for the payment of commissions using so-called ‘discretionary difference in charges’ (or ‘DiC’) models. These had been used by lenders to incentivise car dealers to offer motor finance to customers at rates of interest set or negotiated by the dealer, where dealers would earn higher commission for negotiating higher rates. The FCA did not ban other fixed commission models, which remain in use today. Generally, a lender need only disclose the amount of a commission it pays if it is asked to. But notwithstanding the ban, in the words of a well-known circuit judge, the County Court has ‘seen explosive growth in the last few years’