REG - S & U PLC - Update on Advantage Finance Limited

S&UAnnouncement

29/10/2024 14:00

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RNS Number : 0759K  S & U PLC  29 October 2024

29 October 2024

S&U plc

("S&U" or "the Group")

Update on Advantage Finance Limited

 

S&U, the specialist motor and property financier, today notes the recent
Court of Appeal decisions on Johnson and Wrench v Firstrand Bank Limited and
Hopcraft v Close Brothers Limited, the implications of which it is
considering. These decisions provide guidance for lower courts on the subject
of commissions disclosure in the financial services industry.  They
unexpectedly overturned hitherto received judicial positions on the duties of
motor dealers, credit brokers and lenders to disclose and obtain consent for
the payment of commission. The Group also notes the intention of those
companies to appeal those decisions to the UK Supreme Court.

 

The Court of Appeal decisions set a higher bar for the disclosure of, and
consent to, the existence, nature, and quantum of any commission paid than
that required by current FCA rules, as adhered to by regulated motor finance
firms including the Group's motor finance subsidiary Advantage Finance Limited
("Advantage Finance"). However, the Court of Appeal recognised the 'tensions'
between previous lower court judgements on the extent of commission disclosure
in the cases of 'Hurstanger' and 'Wood'. It therefore called for 'a definitive
announcement to be made by the Supreme Court about the circumstances in which
the payment of a commission …. will give rise to a liability …. on the
part of the payer.' It is therefore unsurprising that it is the intention of
the companies involved to appeal the judgement to the UK Supreme Court.

 

In the meantime, S&U notes that these decisions do not specifically relate
to 'difference in charges' models of commission (currently the subject of an
FCA review) in which Advantage Finance has never been engaged.

 

Given the Court of Appeal's judgement and its implications for the whole of
the financial services industry, S&U is aware that it has been the subject
of urgent discussions between the FLA, the FCA and the Government, and looks
for an expeditious resolution to the issue.

 

The Group will update the market, if and as appropriate.

 

 

 

 

            ENDS

 

 

For further information, please contact:

 Enquiries                                     S&U plc        c/o SEC Newgate

 Anthony Coombs
 Financial Public Relations                    SEC Newgate    020 7653 9848

 Bob Huxford, Molly Gretton, Harry Handyside
 Broker                                        Peel Hunt LLP  020 7418 8900

 Andrew Buchanan, Oliver Jackson

 

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