A major legal battle is set to unfold at the Supreme Court this week, as key players in the car finance scandal face off. The outcome of the hearing could have far-reaching consequences for consumers, banks, legal professionals, and even taxpayers.

Two lenders—Close Brothers and FirstRand Bank (MotoNovo)—are appealing a Court of Appeal ruling that deemed car finance agreements with undisclosed commissions unlawful. The three-day hearing begins today.

Experts estimate the ruling could open the door to as much as £30 billion in compensation claims. Lawyers representing affected consumers could also secure millions in legal fees.

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Some banks have already set aside substantial funds to cover potential claims—Lloyds, for example, has reserved £700 million. The scale of potential economic disruption is so significant that Chancellor Rachel Reeves attempted to intervene.

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A spokesperson for Bott & Co, the law firm representing consumers mis-sold car finance, said the Supreme Court’s decision could set a landmark precedent in the regulation of consumer finance.

Dr. Derek Whayman, a university lecturer, emphasised the need for judicial clarity. He said the court must define what constitutes adequate disclosure of commission fees and determine when lenders are responsible if dealerships fail to inform customers properly.

Meanwhile, the Financial Conduct Authority has announced that, if the court rules in favour of consumers, it will introduce a redress scheme across the industry to ensure affected borrowers are compensated.

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