Car finance: Bribery law expert’s study cited in judgement

Millions of people could be in line for payouts after the Supreme Court ruled some drivers were mis-sold car finance, though the number of successful claimants will be far less than many expected.

Research from Dr Derek Whayman on bribery law was cited in the Supreme Court’s judgement, handed down on Friday, 1 August.

The 2022 study, ‘Liability for Bribes and Secret Commissions at Common Law’, helped the panel of five judges determine the origins of the actions against those who pay and receive bribes and secret commissions. It shows how the common law version originated from the better-known action in equity.

Dr Derek Whayman said: “The Supreme Court rationalised a confused part of the law on a principled basis. By showing that both equitable and common law claims originated from the same source, and had the same aims, the Court’s principled approach was supported by this historic analysis. This increases the weight and authority of the judgment."

Applying Dr Whayman’s research

The Supreme Court made it harder to reclaim a secret commission from both car dealer and finance company. Non-disclosure of the commission is not enough, unlike many previously thought. There has to be an unfair credit relation, usually shown through a very high rate of commission (typically more than 50%). Then a court can order repayment under the Consumer Credit Act 1974.

In reaching this conclusion, the Supreme Court determined that the general law of bribes and secret commissions did not apply to the car finance situation. It had to do this with both equitable and common law claims. Dr Whayman’s research confirmed these claims had the same origin and identified precise details that otherwise might have been overlooked.