Hopcraft and another v Close Brothers Limited; Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance; Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance

A motor dealer which arranges finance while pursuing its own interest in selling a vehicle does not ordinarily undertake the single-minded loyalty required of a fiduciary. Civil liability for bribery requires the recipient of the payment to owe the claimant a fiduciary duty of loyalty; a lesser contractual duty to provide impartial or disinterested advice is insufficient.

An undisclosed commission may nevertheless make a debtor-creditor relationship unfair under section 140A of the Consumer Credit Act 1974. The court must assess all relevant circumstances. Material factors include the commission’s size and nature, disclosure, the consumer’s characteristics, regulatory compliance and any concealed commercial tie between broker and lender.

These conjoined appeals concerned commissions paid by motor-finance lenders to dealers which arranged hire purchase for three customers. The commissions were undisclosed or only partly disclosed. The Court of Appeal, in [2024] EWCA Civ 1282, held the lenders liable in bribery or for dishonest assistance because the dealers owed fiduciary or disinterested duties. It also held that Mr Johnson’s credit relationship was unfair under section 140A of the Consumer Credit Act 1974.

The lenders appealed. The principal issues were whether dealers acting as credit brokers owed the necessary fiduciary duty, whether civil bribery required such a duty, and whether Mr Johnson’s relationship with his lender was unfair because of the undisclosed commission and commercial tie.

1. Disposition. The court unanimously allowed the lenders’ appeals on the claims in bribery and equity. It also allowed FirstRand’s appeal concerning Mr Johnson’s statutory claim, but only to substitute a differently framed order in his favour. FirstRand was ordered to pay him £1,650.95 with interest at an appropriate commercial rate from 29 July 2017.
2. Civil bribery remains a distinct common law wrong. It is engaged only where the recipient of the payment owes the claimant a fiduciary duty of loyalty. A merely contractual duty to give impartial or disinterested advice is insufficient. The contrary approach in Wood v Commercial First Business Ltd [2022] Ch 123 was wrong.
3. A fiduciary duty depends upon an express or objectively inferred undertaking to act exclusively in another’s interests. Trust, confidence, vulnerability, influence over decision-making and the provision of advice are relevant only insofar as they indicate such an undertaking. Commercial context and contractual arrangements must be considered, and fiduciary duties must not distort an arm’s-length bargain.
4. The dealers remained arm’s-length sellers pursuing their own commercial interests throughout the integrated sale-and-finance negotiations. Arranging finance was ancillary to selling the vehicles. Neither promises to find suitable finance nor the customers’ dependency or trust amounted to an undertaking of undivided loyalty. The dealers therefore owed no fiduciary duty, so the bribery and dishonest-assistance claims failed.
5. For bribery, the disclosure required to negate breach of the no-conflict rule is full disclosure of all material facts. The lesser rule in Hurstanger Ltd v Wilson [2007] 1 WLR 2351, under which disclosure that commission might be paid could negate secrecy, was rejected. What is material remains context-sensitive. These conclusions did not affect the disposition once the absence of fiduciary duty had been established.
6. Section 140A of the Consumer Credit Act 1974 requires a fact-sensitive assessment of the entire debtor-creditor relationship. Mr Johnson’s relationship was unfair. Decisive considerations included the very large undisclosed commission, its indirect recovery through credit charges, the dealer’s undisclosed obligation to offer business first to FirstRand, the misleading impression that products from a panel had been assessed, and breaches of applicable regulatory rules. His failure to read the documents weighed against him but did not overcome those matters.

1. United Kingdom Supreme Court: In [2025] UKSC 33, allowed the lenders’ appeals on bribery and equitable liability. It upheld Mr Johnson’s success under section 140A of the Consumer Credit Act 1974, but substituted a different order.
2. Court of Appeal: In [2024] EWCA Civ 1282, allowed the customers’ conjoined appeals. It held the lenders liable in bribery or dishonest assistance and upheld Mr Johnson’s unfair-relationship claim.
3. County Court appeals: HHJ Worster allowed FirstRand’s appeal in Wrench and remitted the statutory claim. HHJ Jarman KC upheld the rejection of Mr Johnson’s fiduciary claim but remitted his statutory claim.
4. County Court trials: Ms Hopcraft’s and Mr Johnson’s claims were dismissed. Mr Wrench initially succeeded in bribery in relation to both transactions.