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The Financial Conduct Authority (FCA) has confirmed a partial suspension of parts of its motor finance compensation scheme, alongside confirmation that legal challenges will be heard by the Upper Tribunal either 14–18 December 2026 or 16–26 February 2027, depending on whether further applications for expert evidence or disclosure are made.
The partial suspension of parts of the scheme, as confirmed by the Upper Tribunal, will allow firms to continue preparing for implementation and progress complaints where possible, while avoiding work that may need to be repeated if the legal challenges are successful. The arrangements also require firms to notify complainants who are not eligible for compensation, subject to limited exceptions.
The FCA has stated that, if the scheme is upheld and no further appeal follows, compensation payments are expected to begin during 2027. Should the scheme be overturned, the regulator will consider alternative approaches, including requiring lenders to resolve complaints through the usual complaints process.
The FCA has published further information explaining the implications of the partial suspension for firms and consumers. It has also confirmed that a consumer information campaign will launch in mid-July, encouraging eligible consumers to submit complaints directly rather than through claims management companies or other intermediaries.
