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Look, in the UK every year 9 million cars are purchased (new and used cars). Of this number 2.2 million are purchased using motor finance – that is 1 in every 4 cars bought in the UK. These are cars which people would not have been able to purchase without finance from lenders like CBG. So these people would not have a car to drive to work or use for shopping or to take their kids to school. The UK motor finance industry is worth £40 billion annually. Now if the Supreme Court decides that the motor finance industry has been bribing car dealers due to a legal technicality for the past 50 years the industry will have to change. Car dealers will make clients sign a credit brokerage agreement where it is expressly stated beyond any possible doubt that they will go out and secure finance for them. And then the client, the car buyer, will have to pay the commission and not the lender. The commission will be added to total loan – so if the car costs £6000 and the commission is £500 the total loan for the car will rise to £6500. In this way no one is being bribed but of course the consumer loses out because they have to pay the commission and not the lender. With regard to “redress” for all the bribery of the past 50 years – there is no way that government is going to allow the banking sector to get hit for £40 billion as some have suggested because the FCA has already indicated it does not approve of this and many lenders have already warned that they will exit the industry (Santander has threatened to exit the UK totally, not just the motor finance space).

The FCA and the Treasury have already flagged this view. The FCA (a branch of the government) said in its submission to the Supreme Court: “The sweeping approach of the court of appeal in (effectively) treating motor-dealer brokers as owing fiduciary duties to consumers in the generality of cases goes too far,” It said car dealers “do not typically” have a requirement to act in consumers’ best interests, and treating all brokers as if they had this responsibility “would also be at odds with the legislative and regulatory framework”.

So even if the Supreme Court do judge inline with the Court of Appeal (contrary to the FCA’s wishes) the government will have to legislate to make sure the industry is not decimated leaving 2.2 million not be able to buy a car every year.

So in the Johnson/First Rand case the dealer got the customer the lowest interest rate out of 22 lenders, the agreement with the customer indicated that the dealer might get a commission from the lender, the client agreed to all this by signing a document and bought the car. But the Court of Appeal found the commission paid to the dealer was not disclosed in a way that was “adequate and meaningful enough to allow the customer to provide fully informed consent”. FirstRand Bank was held liable in the Johnson case as an accessory to the breach of fiduciary duty by the car dealer (acting as a credit broker) and for creating an unfair relationship under the Consumer Credit Act 1974 (CCA). Furthermore, although the car dealer and First Rank might have been fully in compliance with FCA regulation they may nevertheless still have broken common law. In fact by complying with FCA regulation you might be contravening common law. Further, it was made apparent yesterday with reference to various industry handbooks from the 1970s that lenders paying commissions to car dealers is standard industry practice. And all that time they have been breaking the law and committing acts of bribery with the approval of the FCA. That is the contention of the Appellants.

Shorters are out in force. They will aim to take this back to 270p. But of course by doing so they are digging themselves deeper. Interesting to watch.

The shorters will have to show force to keep a lid on the stock. Otherwise it will get painful for them. They will have to take their short up to over 5%. Or will they bottle it and head for the exit.

Big picture, given the Supreme Court submission from the FCA and guidance from the Treasury in February, the result of the Supreme Court case is immaterial. If the Supreme Court does not overturn the Court of Appeal ruling the government will overturn it via statutory legislation. In the UK, Parliament is sovereign. The FCA pointed out in its submission that motor finance is a £40bln per annum market. It finances the purchase of 2.2 million cars every year in the UK (out of a total 9 million cars annually). That is 1 in 4 cars purchased in the UK need motor finance. This industry cannot be disrupted by some intricate and arcane legal judgement which would totally ignore social context - that is no one goes into a car dealer expecting the dealer to be interested in anything other than making a sale. So big picture - the verdict does not matter. It may cause short term volatility in share prices but long-term it will not be allowed to disrupt the normal functioning of the UK economy nor the work of lenders like CBG.

The quality of the KCs is first rate. But the arguments being put forward by the Respondents are preposterous. Given the shall we say milieu of motor dealers (widely known and accepted by everyone in our society and endlessly satirised by popular culture - think Boycie or Swiss Tony or Arthur Daley) to then have a court case suggest that consumers expected a duty of care from such personages specifically within the circumstances of acquiring a car on 100% finance is crazy.

But even then is it not my look out to check the terms of the finance agreement and work out that by acquiring the car with finance it would cost me more than £8000?

Surely it would only be a bribe if I turned up to my car dealer and decided to buy a car for £8000 cash. And then the car dealer convinced me to buy the car using financing from a bank which paid him a commission. And he kept the commission he received from the bank secret. And it turned out that the terms of the financing were such that the cost of the car would be more than £8000.

The idea that a car buyer would ever be under the impression that a car dealer (who is interested in securing a car sale) would owe them (the car buyer) a duty of care in getting them financing is preposterous. The car dealer is out to do anything possible to make the sale happen and make as much money from the transaction and everyone knows that. Does anyone really expect Boycie from Only Fools and Horses to do anything other than maximise his chances of getting securing a car sale?

Does not the car dealer owe a fiduciary duty to the provider of finance to get them the best deal possible vis-a-vis the car buyer given the car dealer is paid by the provider of finance for their brokerage services.

So the car dealer when he sells a car to the client does not owe a fiduciary duty to the client when he sells them a car. But he does owe them a fiduciary duty when he sells them a finance. Any commission paid to the car dealer for the sale of the finance agreement, even if it is notified to the client, is a bribe. The respondents lawyer has lost his way.

He is in trouble. And Judges are very sceptical of the key pillar of the Respondents argument.

Who does the chap currently speaking represent?

Would love to hear Chid's analysis of the FCA's submission to the Supreme Court. Just for a laugh. Come Chid you know you want to say something vacuous.

The FCA today published its submission to the Supreme Court:

https://www.fca.org.uk/publication/corporate/fca-written-submissions-10-march-2025.pdf

Does anyone have any details on Mobico's Moroco operations? Might be important to keep an eye on economic developments in that country.

The UK Supreme Court took 11 days to rule on the prorogation of Parliament in 2019. The case was heard over three days, from September 17 to September 19, 2019, and the unanimous judgment was delivered on September 24, 2019.

Feels very squeezy out there. Shorters will have to work overtime to keep a lid on the stock.

Have followed your previous posts for a while GenghisInvestor. You clearly are a talented investor. Thanks for posting here! We are lucky to have you.

Thank you for that very meaningful bit of analysis GenghisInvestor. I stand corrected. Germany is clearly absolutely essential and central to the future of Mobico and the future direction of its shares. Would love to hear what people think about the formation of a new government in Germany and how its composition might impact Mobico. Clearly we have very many professional investors on this message board. I feel blessed.