Is a judicial review of the FCA’s redress scheme inevitable?

A prominent King’s Counsel who was involved in April 2025’s Supreme Court hearings in the Johnson, Wrench and Hopcraft test cases has warned that a judicial review of the Financial Conduct Authority’s (FCA) car finance redress proposals is ‘inevitable.’

Jonathan Kirk KC, who acted for the intervening National Franchised Dealers Association in the hearings that led to the landmark judgment handed down in August 2025, and is a much respected voice in this area of the law, outlined the complexities of the regulator’s redress proposals at Automotive Management Live on 21 November 2025.

The Supreme Court, the regulator and judicial reviews…how did we get here?

August’s Supreme Court ruling ultimately led to the establishment of the current legal landscape around car finance mis-selling and the regulator's redress proposals, published on 7 October 2025. A consultation on those proposals remains open until 12 December 2025, with the FCA planning to publish final rules by February or March 2026.

However, Mr Kirk KC’s words at Automotive Management Live may cast doubt on whether the scheme will go ahead and payments will commence as currently anticipated by mid-2026 without some prior turbulence.

‘I would be absolutely astonished if there was not a judicial review of this scheme in the current form that it is,’ said Kirk. ‘There are so many practical difficulties…The calculation of this is supposed to be compensatory. It’s so complex and doesn’t have any kind of rational basis that I think it’s inevitable.’

Lenders preparing to fight proposals rather than pay redress

Continuing to outline lenders’ potential next actions in response to the regulator’s proposals, Kirk added: ‘I know that the lenders are gearing up. All the soundings we’re getting is that there is a lot of pressure being placed on the FCA, and that this is a bit of a cock-up really.’

Perhaps most alarmingly for consumers awaiting their car finance compensation, Kirk also pointed to the regulator's previous form for delaying in the face of litigation, and suggested it may take some time for any finalised redress scheme to commence, particularly if there is indeed a judicial review.

Kirk said: ‘With any judicial review, you’ve got to bring it promptly, and in any event within three months. The FCA have responded to all of the court litigation by deferring and delaying. They responded to both the Arnold Clark judicial review and to the Johnson case by delaying.'

‘In my view, if there is a judicial review, there will be a permission stage. In this kind of thing you would expect to get permission quickly, but I would anticipate they would delay.'

‘I wouldn’t anticipate that there would be definitely a scheme up and running by March, April of next year. I think that’s optimistic.’

What would a judicial review mean for consumers and car finance claims?

The most significant concern for consumers will inevitably be the potential further wait for their redress. A judicial review could mean that:

• the redress scheme is paused and delayed further – although we would anticipate and hope that any delay would happen with a view to a final decision being made before any scheme begins;
• the redress scheme’s rules may change after claims have been submitted; and
• compensation estimates could be reduced, or increased, or the compensation calculation methodology recalculated.

But claimants could challenge any attempted judicial review, cross-apply, or mount their own challenge

Claimants and their representatives, assuming lenders succeed in obtaining permission to review the FCA’s decisions, could argue that the scheme is not fair to consumers.

Some representatives may already be planning for such action, particularly given the All-Party Parliamentary Group (APPG) on Fair Banking’s view on the redress scheme, which is that the regulator is ‘nakedly taking the side of lenders’.

The primary question for claimants and their representatives is likely to be whether further delay in receiving compensation is worthwhile given the potential outcome.

When would a judicial review be brought?

An application for judicial review could follow the publication of the regulator’s final redress rules (no reviewable decision will have been made until that point).

Given that the FCA will close its redress scheme consultation on 12 December 2025 and has allowed itself until the end of March 2026 to publish the rules, it could be the case that the regulator will use that time to make significantly more changes than many would have initially anticipated to the scheme after assessing the feedback received during its consultation period.

...So is a judicial review inevitable?

Although a judicial review may or may not be inevitable, what is certain is that consumers or lenders – and almost certainly both – will disagree with some aspects of the redress scheme and the regulator's final rules.

That may, in the end, prove that the FCA has got the balance between competing interests about right, so it may be that Mr Kirk KC is wrong in his prediction; and lenders and consumer groups alike may reflect that there has never yet been a successful legal challenge to a regulator-led redress scheme. What is certain is that the path towards the creation of a motor finance redress scheme is not necessarily going to be straightforward.

The benefits of seeking representation have never been clearer

You do not need to seek professional representation to bring a car finance mis-selling claim and, thanks to the regulator’s redress scheme, will be able to do so yourself at no cost.

However, with lenders potentially gearing up to challenge the FCA redress scheme, continuing to deny that car finance mis-selling caused harm, and the potential to explore additional claims such as those for mis-sold GAP insurance and irresponsible lending, as well as the concerns outlined by the APPG in its Car Finance Scandal: Assessing Redress report, there are compelling reasons why you may wish to use a solicitor for your car finance claim.

In addition, should a judicial review lead to further delays or complexity, having a team of experts monitoring proceedings and advising you on how to proceed accordingly provides a layer of security that acting alone cannot offer.

You can register your car finance mis-selling claim with Harcus Parker here.