The Supreme Court’s decision in Johnson v First Rand [2025] UKSC 33 delivered on 1st August 2025 has had major consequences for the PCP/car finance claims market while strengthening the position of mortgage undisclosed commission (UDC) cases. The Johnson appeals centred on car dealers who also acted as finance brokers and received undisclosed commissions from lenders. Although the Court of Appeal had largely sided with consumers, the Supreme Court rejected most of the claimants’ arguments and found in favour of the defendants.
For PCP claims, the Court ruled that car dealers were primarily sellers of vehicles acting in their own interests, and therefore could not be considered fiduciaries owing a duty of undivided loyalty to borrowers. This meant that while commissions had been paid, the tort of bribery could not apply, as bribery requires a fiduciary duty. The Court also rejected the concept of a mere “disinterested duty” being enough to trigger bribery liability, overturning Wood v Commercial First. Bribery was confirmed as a strict liability tort, but one limited to fiduciary relationships. Importantly, the Court removed the distinction between “secret” and “half-secret” commissions: partial disclosure (such as stating a commission “may” be paid) is insufficient. Instead, only full and frank disclosure of all material facts—amount, calculation basis, recipient, and warnings of bias—can negate secrecy. For PCP claims, this decision significantly narrows viable causes of action. The remaining route is through the Consumer Credit Act’s “unfair relationship” provisions, which require fact-intensive analysis and are unsuitable for mass, formulaic claims. The future of the PCP market now largely depends on whether the FCA introduces a redress scheme, though expectations are that payouts may be modest.
In contrast, the implications for mortgage UDC cases are far more positive. The Court reaffirmed that mortgage brokers, unlike car dealers, clearly owe fiduciary duties of undivided loyalty to their clients. Fiduciaries remain bound by the no-profit rule, meaning they cannot receive commissions without the borrower’s fully informed consent. The Supreme Court confirmed that bribery law remains unchanged: it is strict liability, requires no causation or proof of loss, and continues to provide strong remedies such as rescission and restitution. By abolishing the half-secret category, the Court has made it clear that unless all material facts of commission are disclosed—including value, recipient, and potential bias—the commission will be treated as undisclosed. This means that many past mortgage cases previously considered “half-secret” now fall squarely within the scope of secret commissions, greatly expanding the pool of potential claims.
In conclusion, the Johnson ruling curtails the mass PCP claims industry by rejecting fiduciary duties for car dealers, while simultaneously strengthening mortgage UDC claims by confirming fiduciary duties for brokers, maintaining strict liability for bribery, and removing the half-secret disclosure loophole. This has dramatically increased the potential for mortgage UDC litigation while limiting PCP claims to narrower statutory grounds.