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Grok : "CONC 4.5.3R lacks direct statutory foundation in CCA 1974 s140A for prohibiting fair commission levels in competitive markets with open APR disclosure, rendering it susceptible to JR on irrationality grounds under FSMA s138A(2) (disproportionate interference with market autonomy)."

Ironically lenders can't challenge CONC 4.5.3R (2021) directly because it's time barred (six years was March 2025) but the redress scheme (ultra vires incorporation of CONC) is where it may well happen..... along with all the other challenges to various degrees of complete misalignment with the courts.

Maybe lenders could argue that the FCA deliberately concealed the fact they had an inability to follow the law and have been pretending to be a regulator for the last 7 years.

Judicial review challenge within three months of the final redress proposal.

More guesses, errors, tin foil hats and whatever, do your own homework...

Deliberateley concealed popcorn..... where is it..... munch.... munch....

"why do you feel Barclays dropped this case" - All to do with timing and the way court decisions are hirachical.

If Barclays had continued with the case in appeal they would have gone to court and then been waiting potentially three plus months before a decision was reached, which in the meantime the FCA progresses on with the redress scheme. During that redress timing the relevance of the court challenge would not be binding on the redress process, which gives the FCA a possible free hand, especially if the court ruling is delayed six months.

With Barclays withdrawing from the challenge if they considered that Clydesdale would still need to be challenged either way they could challenge the ruling but this time from within the redress process. The first challenge would then get the redress scheme suspended at the start.

The Clydesdale case was at the High court and the initial challenge state of the redress scheme will also be at the high court level. Under UK law a high court can't overrule a judgement by another high court, but what they can do is set asside a ruling that they find problematic and exclude it. This is where Barclays may have taken a view that without going to the Court of Appeal they could potentially get the Clydesdale ruling removed from consideration within the redress scheme earlier.

That would leave the FCA in a big hole because they need Clydesdale to justify 90% of the redress logic. The high court setting asside of Clydesdale would then require the FCA to admit they were wrong (implicit acknowledgement that Clydesdale is wrong) or they would then need to appeal and take it to the Court of Appeal. That put's Barclays back into the exact same situation and the FCA in and even bigger hole because this is post definition of a redress proposal. This would also be the FCA in effect trying to say the courts are wrong.

When Clydesdale is then overruled at the Court of Appeal (with the FCA appeal continuing the suspension of the redress scheme) that would officially place a terminal stamp on the redress proposal. The whole of Clydesdale may not get overruled but it will only require ground 1 to be overruled to cause a massive change (reduction) to redress.

Without Clydesdale the DCA issue may be DoA and the limitations act exemption is removed, placing a huge question that 2019 is the plausible start date, not even 2014. The FCA's reputation is completely trashed at that point.

That's my rough perspective on the sequencing that I think is going to happen and why Barclays pulled out.

Still some bits to work through and may have a long series of detailed posts with the full details later on (days to weeks).

Or just my guesses, errors and usual confusion, do your own homework.

May be a show and a half, get the popcorn in if it goes that route..... munch... munch...

Add another one to the legal challenge list.

So, the key question for me is will the initial high court challenge sideline Clydesdale (rule that it is inapplicable for the redress scheme because they can't overrule it, being a high court ruling) given that it would appear to have little prospect of surviving a direct chellange and contains aspects that were overturned by Hopcraft. The FCA will then be faced with the prospect of being shown to have made a legal error in applying Clydesdale from the start without even a court overturn of the ruling in Clydesdale. That to me would say that the FCA will have to appeal to the Court of Appeal (they would then have to extend the redress suspension because it would otherwise look like an abuse of power) where in my view Clydesdale will be overturned and the limitations act angle of the redress scheme blown out of the water, along with the DCA disclosure simplification.

Here's where it could get really interesting. I'm thinking that the lenders may simplify the process and just challenge the legality of CONC 4.5.3R 2021 ammenment that banned DCA agreements (even ones that only allowed the interest rate to be reduced - which is even more difficult to frame in the CCA as unfair separate to the problematic perspective on impact on competition). That challenge approach would undercut the FCA in a way they could not then justify the redress process at all and made a fundamental legal error in 2021. That may be a low probability scenario, but I see it as potentially a lot more simpler that multiple different aspects of the redress scheme and maybe it would only take one lender to go this route, separate to redress challenges.

Considering the recent Hopcraft and LIBOR rulings and how they would change Clydesdale (think about how the argument in Clydesdale was framed with CONC 4.5.3R and other rules) the prospect of a direct challenge to the FCA CONC rules may well be legally more sound as well, because CONC rules have to be founded in law, they can't stretch the law or make new laws up. CONC 4.5.3R is on the principle it aligns with the CCA and what constitutes an unfair relationship. Given that the consumer is not being forced into any deal and free to shop around the imposition of a rule to try and micro manage competitive margins may well be seen as regulatory overeach. The FCA within the redress scheme are basically placing an upper limit on proffit margin for any and all deals. Compare that 35%/10% equivalent onto margins that supermarkets may well be making on some products they stock, will the FCA be chasing the margin on a tin of beans next ?

I'm waiting to see if any lenders raise this challenge prospect and to see how the FCA respond.

Just some more errors, guesses, thoughts, etc. do your own homework, think...

Popcorn stock completed... munch... munch...

"If I was FCA Legal Counsel" - lol. Mr blame.

The lenders rage I would frame in the context of the rule of law being trampled by the regulator who is blind to section 404 legal alignment. That said, it's a consultation and if the proposal is anything close to the proposale the court sequence will commence.

From my analysis so far the limitations act will not be upheld and that may well result in claims filed since March 2025 being time barred. Anything prior to 2019 may also be time barred because the FCA publication will then be the potential start date of awareness. The DCA filter tick box rests upon a flawed element within Clydesdale that runs around a plural argument, which in a singular transaction (as clearly stated in the surpeme court and the CCA) the plural nonsense is the same as the fiduciary from trust error of the court of appeal. Lastly, the 35%/10% has near zero chance of being upheld because it's not even close to a Plevin type fair proportionality of the cost element, the FCA redress completely detaches from the concept that arose in Plevin around redress that was above and beyond a fair boundary. That's excluding the very basics of Johnson multiplicity of conditions being brushed asside into a simplistic tick box that even the FCA argued against in the court of appeal case.

At to a dilusional perspective that HMG are coherent and in alignment, they are a loosely affiliated bunch of people out for individual job preservation, including back benchers and the FCA having dug a legal hole they can't get out of without damage. The village is also missing someone.

Yup more guesses, errors, etc. do your own homework, or consult the village escapee.

Going to be an interesting show ahead, get the popcorn ready... munch...munch...

There is also a different possibility that nobody is considering at the moment.

Could the lenders (or another entity) take the FCA to court over a failure and breach of duty that has resulted in £3-5bn damage to the treasury in lost tax revenue and damaged the UK economy by a larger value overall. The 2007 question is key to this and yet to surface.

Nobody is recognising the damage that the FCA have already done to the economy. Consider what the HoL was discussion prior to the FCA meeting in relation to capital ratio's for lenders having an impact on growth and why the UK is struggling as a result. The consider the meeting immediately after that was a scheme that has reduceed CET1 lending by banks to the tune of a few £bn and consider that CET is leveraged in lending. The net effect is possibly around a £20bn reduction in lending, achieved by a misguided FCA to save what ? Sub £50 (7%) per agreement accoding to technical annex 1 when considering the actual commission. The APR certainly can't be argued was hidden, a very well establiched competitive market and CCA 14 day cooling off period (another point that was abused and misrepresented). Arguments around the APR are flawed when considering the SC stating the dealer has it's own commercial interest.

Just imagine the court actually ruling that the revised CONC 4.5.3R on DCA disclosure was illegal and not in alignment with CCA because it unfairly discriminates motivation. A bonus given to staff could be viewed as variant on a DCA if it's linked the the profitability of a business. The SC made clear a DCA is not a bribe. That's another one lurking below the surface.

Overall a story that's toxic for the average emotional click headline grabbers because it requires thought and a more complex understanding of economics.

Those scenario's would cancel virtually all DCA's from redress and only hold Johnson type multi factor high commission cases to redress. Quite plausibly sub 1m cases and a massive bonus to the UK economy as it would also signal to the world that regulation is not retrospective and if you follow the rules as described you have certainty. That's another key point that has to be made if the government wants international investors to view the UK more positively.

Maybe an overly optimistic view, a view that is a little more founded or one that is not fully considering both sides ?

Will also take a back seat for a while, unless there are good arguments put forward to consider that favour the FCA.

Paused the popcorn... munch... munch...

@SG2025 - The issue around disclosure is one which is easy to look at from the narrative and why I think it will end up in court. The actual details founding that narrative paint quite a different picture and the FCA may well be aware that a court challenge is pending and fits with @jperryuk tin foil hat. My tin foil hat is seeing something a little more dark and will not go into this until I have proof or a factual basis and thesis. An unanchored opinion holds little against the tide of overall opinion.

The supreme court made clear that the commissions were not hidden by way of the prior law cases on the "may" being quite clear on expectations and disclosure. Separately they stated the dealer has it's own commercial interest (FSMA principles challenge without CoA fiduciary nonsense). Lastly the critical one is that the process is a single transaction (again SC clarity) which aligns with CCA but Clydesdale assumes differently and I believe just as flawed as the CoA imagination on trust leading to duty.

The FCA are resting on Clydesdale (post CoA error ruling) that has pushed the FSMA principles in line with post CoA expectations on disinterested (renamed fiduciary dity) duty. Would Clydesdale have rules the same if the CoA had lost, I'd wager (and am) that is would have been different. This is why court is in my view inevitable without the FCA backing off.

In terms of if you think the lenders will choose different paths, read both of the last provision RNS from CBG and Lloyds and consider why the objection wording is very closely aligned.

The court challenge will have a highly likely suspension attached to it, which suspends the whole scheme for everyone. Supsequent suspensions at higher courts would do the same.

The rapid emotional reactons to this will subside and the facts will become more clear as people have time to look under the bonnet as to what is actually going on.

In terms of the head of the FCA going into politics, reasonable assumption. I worked with someone similar, it took the company around six months to see through and corner the lies before they fired them. Those are in my view the most dangerous people to hire because they look reall good on paper and in an interview. If you don't see though the veneer in the interview you end up hiring a lot of damage.

Again, the more I read and think about the current situation the more happy I am to just sit and wait. I do, however value far more the critical questions of doubts, even more so when they have a reasonable basis. That's what I look for in this forum.

Again, more guesses, errors, disclaimers, do your own homework.

Popcorn as always... munch... munch...

Having had a bit of a think about what was said in the HL meeting the FCA appear to have effectively time barred thier own scheme. Under the law the limitations act clock starts ticking when you are aware or likely to be aware of an issue and only have a limited time to act. The FCA admitted very clearly that since 2014 they seemingly had other priorities and effectively made the statement that they sat on thier hands before actually doing something and discovering a possible wrong.

There may also be a case to claim plausible entrapment of lenders by the regulator knowingly allowing a percieved wrong to occur if the regulator is now positioning that they were aware much earlier.

Matthew v Sedman [2021] - If it's past the 'midnight deadline' it's barred - Separate FCA issue over difference to the SC court date ruling deadline on redress dates.

March 2019 motor ruling finance review final report publication (public disclosure awarenes) may also mean that claims start to become time barred from March 2025 (March 2019 + six years) extending only if the contract end date is post March 2019. Claims prior to March 2025 may then fail unless they are covered by the Supreme Court Johnson type on commercial tie and pretend pannel of lenders deliberate concealment. The IDD partial disclosure (inline with OFT 2010 and 2014 CONC) and the FCA admitting that non disclosure is not enough on it's own to be unfair under the CCA (requires the commission to be large as well if trying to mirror Johnson without the commercial tie, the misleading pannel and documentation errors).

The FCA have a massive issue if the limitations act section 32b extension does not apply - this adds to where the real issue and sensitivity is.

There is a scenario where the claims are scaled back much further than what people may be expecting. Just imagine what would happen if 10m plus DCA claims were rejected and redress is down to 3 million and say £2.5bn total ?

Just some more guesses and errors, do your own homework,

Day dreaming popcorn.... munch... munch...

Supreme Court (320) relating to Johnson (not Hopcraft or Wrench)

"It is clear that the commission was not disclosed. Nevertheless, we agree with the FCA and Court of Appeal (para 20) that the mere fact that there has been no disclosure of the commission, or only partial disclosure, will not necessarily suffice of itself to make the relationship between lender and customer unfair for the purposes of the CCA. It is a factor to be taken into account in the overall balancing exercise required under section 140A."

Read the "agree with the FCA" bit again and then consider what the FCA said in the House of Lords. This is a ruling after Clydesdale, which ruled after and took into account the court of appeal fiduciary.

Mainly copy and paste, with a guess...

Where's that comfy chair, ah, popcorn... munch... munch....

Timeframe is about suspending consumer rights whilst they try and push the slow wheels of progress in the FCA. If they move from 2007 the FOS complaints have to be processed and they don't have the staff. The whole issue around what start date is applicable is a smoke screen for a different motivation. It will get pushed back from 2007 because the OFT 'guidelines' final came into effect in Feb 2011 just to start with.

Clydesdale (17) "In a footnote against the phrase “differential commission rates”, it was said that “[t]he amount of any such commission should be disclosed on request”"

That says even in Clydesdale the OFT guidelines at 2011 required "disclosed on request" and the "amount" and not the nature, very clear very specific.

All DCA's rest upon the retrospective application of a 'nature' type disclosure as FCA council said in HL where the comment made a point the disclosure had to mention DCA, even though in OFT guidance way back in 2011 mentions DCA commissions and ommits to make any specific requirements on disclosure different to any other commission. Clydesdale ground 1 is the root for this rationale and it's flawed.

Redress points by the FCA to Johnson award in full commission redress avoids the combination of factors specific to that case. For them to apply that as a benchmark shows legal incompetence or a bet that they will not be challenged in court and it's a game of chicken.

At this point I'm quite happy to sit back and watch, or get involved in a different way. It's going to court and it will be pure entertainment.

Just my guesses, errors, copy and paste, etc. do your own homework, think.

Back to the comfy chair again and popcorn.... munch... munch...

From the way the FCA were responding they will not back off much and it will need to go to court, which will delay the whole process. After the initial court round it may need to proceed again (Clydesdale), even with concessions to the scheme, in order to pair it back to what is legally correct. The House of Lords seemed to be trying to give the FCA the opportunity to avoid the courts and have the courts force the FCA to change. The FCA have a reputational issue.

Delays at BoE plus 1% is not detrimental when looking at the funding rate and allocation.

The question around 2007 was covering part of the issues I have pointed out and there is a lot more to add to that but it's more detailed legal aspects. The committee seemed to just focus on the easy questions around documentation and limitations act with Canada Sq. The Clydesdale point needs to get to court to change the error the judge made. Disclosure destroys the Limitation Act.

Clydesdale ground 1 I'm confident is flawed, grounds 2 and 3 I have not dug deep on yet.

Johnson in the supreme court ruling should be clarified in the firs court challenge in relation to the disclosure (commission not tie) being driven by documentation errors. DCA disclosure was never required even though in the OFT guidelines in 2010 they are mentioned.

Just some more guesses and errors, usual disclaimer, do your own homework, research, think.

Back to the comfy chair and popcorn.... munch... munch...

Redress consultation paper redress tickbox : was it a DCA agreement, tick. Was it illegal, no.

Disclosure - curiously the IDD was not brought into light apart from FCA council saying it needed wording that included DCA, which is retrospective nature disclosure, which was not the rule at the time.

Finished the popcorn.... munch... munch...

FCA council : "Discressionary commission agreements were not illegal before we banned them"

Eh ?

So far it's increasing my confidence that this is going to court and the lenders will win significant changes. The reason why is that Clydesdale will be challenged and the interpretation of the Supreme Court does not consider that the paperwork in Johnson was the reason for the non disclosure. Techically pointed to the wrong clause.

"retrospectively" - I'll keep quoting disclosure as "and nature" wherever I can, even though it was 2021.

Funny start to the meeting...

Just more guesses, do you own homework.

Popcorn at the side.... munch... munch...

Https://parliamentlive.tv/event/index/0d66fce8-6279-48f0-bf00-7547cafc7667

With the Hopcraft ruling from the Supreme Court being after Clydesdale and also a higher (top) court, it is clear in law that Hopcraft would overide Clydesdale. Within Clydesdale the judge argued that commissions in the plural existed under a DCA arrangement (head office and dealer) and that both suggested commissions required disclosure separately. This dual disclosure perspective is what is at the core basis of a percieved inadequate disclosure by the dealer.

Extract from the supreme court ruling [202] "On the contrary, the dealer has its own commercial interests to serve, and is entitled to do so." FSMA Principles are about 'fair' (CCA 140) and redress also rest on CONC 2.5.8R conflicted "best interests of the customer".

Under the CCA motor agreements are in the form of a three party agreement, lender, supplier, debtor and the formation of the contract results in a singular transaction (as per the supreme court) and would form a regulated single agreement under CCA section 12.

The FCA refer to the vehicle sale transaction as a "purchased package", however the supreme court ruling [299] "the reality is that there is a single composite transaction." which aligns with the CCA Section 9 "Meaning of credit" (3) "fixed-sum credit to finance the transaction of an amount equal to the total price of the goods less the aggregate of the deposit (if any) and the total charge for credit." and aligns with section 11 "A restricted-use credit agreement is a regulated consumer credit agreement" singular.

Within that singular transaction, the lender would pay the supplier the commission after the agreement and because the lender does not emply or contract with the dealer or any other entity separately (because the agreement is only with three parties and a singular transaction) the lender pays a singular commission. The supplier (dealer) then divides up the commission and it is the supplier who is then making separate commission distributions post transaction to the relevant entities within the suppliers commercial business (ref SC 202 above again).

Within Clydesdale and the redress proposal th singular supreme court and CCA alignment would appear to mean that the judge in Clydesdale made a slight error or to copy "a foundational issue".

Without the plural the basis for the Limitations Act 1980 section 32 extension, would appear to "stretches regulatory powers beyond statutory limits"

And to top it off, even with Brexit the adopted regulation under Article 5 "Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties."

Impossible to cover in a post properly.

Just some guesses, errors and finger in the air. Do your own research, etc.

Morning popcorn.... munch... munch...

Fat fingers and typing without looking...

Maybe the retrospective lense of modern times is very different to what actually happened in 2010 ? Change the interpretation of a rule and find everyone guilty retrospectively.

Missed the popcorn that time... munch... munch....

Lol. the forevernet brings up some gems at times.

Government BIS response to the OFT in 2010 "Although many dealers provide high standards of service and comply fully with the law,"

mAYBE THE RETROSPECTIVE LENSE

FCA introducing new and improved fraud 101 by way of redress run by village idiots under the presumption of guilt with the obligation for the accused to prove thier innocence..... Oh, that's I trust you and now because I trust you your my fiduciary, oh, you did not disclose as my fiduciary what you should have told me before I met you. Your guilty before trust.

Only the FCA can support the lenders before the highest court of the land with written evidence (10th March 2025) and then contradict that evidence within a redress scheme it proposes is fair. Did that mean that the FCA lied to the Supreme Court ?

More guesses and errors or maybe fewer guesses and no errors or just all trust of no trust. Scheme 404.

Fraudulant popcorn that just keeps popping.... munch... munch...

Nice letter, " failures to adequately disclose the existence and nature of commission" - good luck with the FCA trying to uphold that against established law that says you need a rule to be broken in order for a firm to beak the rule. The FCA handbook very clearly did not contain "nature" and was added in 2021. Like in Black Horse, the judge rules that you cant be deemed to be unfair if you have not broken a rule, which the FCA are resting on Clydesdale to bring in Principles 7 and 8, however the Supreme Court ruling made clear that the dealer has their own commercial interests.

"denied the chance to negotiate or find a better deal" - goes against the very principle as to what a cooling off period is in the CCA. The wording of the FCA is trapped in the world where they think a fiduciary relatioship exists.

"a lender acted unfairly" - I would bring up the Clydesdale judge here arguing about plural or singular. The FCA then shoots themselves in the foot with high commission 'and' contractual tie. The FCA effectively state a combination of factors, which is not the redress proposal. Does Nikhil actually proof read what he writes ?

" balances the Supreme Court’s approach and our evidence of consumer loss" - So, Wrench was not unfair and zero compensation in the Supreme Court and FCA tick box overrides this to award redress ? Nice balance.

Anyone think the scheme is going to be implemented as proposed ?

Letter source : https://committees.parliament.uk/committee/697/financial-services-regulation-committee

More guesses, errors, etc. do your own research.

More contradictory popcorn.... munch... munch...

Even if CBG increased provision to £400m the CET1 would be around 12% and you then have a clean ongoing proffitable business. What would the company then be valued at if it had no uncertainty attached ?

The current share price is a reflection of uncertainty, which has decreased since the court of appeal nonsense. Granted the uncertainty is lower, it's just become more quantifyiable as the redess scheme is getting into the details compared to the uncertainty as to which agreements, what timeframe, etc.

Watch what happens in the House of Lords committee tommorrow because it may well be quite interesting and reduce some of that uncertainty further. The FCA are not going to sit and say the redress scheme as proposed is without faults.

The FCA by way of the redress provisions, in the last week, just for Lloyds and CBG has reduced the Treasury income by £0.25bn (provision offsetting proffits, no corp tax and levy) which adds to the never ending socialist financial black hole. Self inflicted damage by the government, which the media will not cover because it's complex.

CBG makes £135m extra provision, FTSE 250 index down 0.5% on goepolitics, CBG only down 0.3%. What do you think that says about where the uncertainty is ?

Just more guesses, errors, etc. do you own research

Panic stations or a cup of tea and popcorn.... munch.... munch...