A High Court judgment limiting the Financial Ombudsman Service's ability to consider certain historic lending complaints has prompted questions about whether it could affect the UK's ongoing car finance scandal.

The short answer is no.

While the ruling is an important development for complaints involving overdrafts and credit cards, it does not change the current process for consumers pursuing a car finance claim or other complaints linked to historic vehicle finance agreements.

What did the High Court decide?

The case centred on whether the Financial Ombudsman Service (FOS) could consider complaints about historic lending outside the usual time limits.

The Ombudsman argued that where a lender had failed to correct an earlier problem, that failure amounted to a fresh omission, allowing consumers to complain years after the original agreement.

However, the High Court ruled that the Ombudsman had made a fundamental error of law by extending complaint deadlines beyond the framework established by the Financial Conduct Authority [1].

The legal challenge was brought by Barclays, NatWest, Santander and Vanquis, with the FCA supporting the banks' interpretation during the proceedings.

Does the ruling affect car finance claims or PCP claims?

The judgment does not alter the FCA's ongoing review into commission arrangements in the motor finance market.

Consumers considering car finance claims or PCP claims relating to undisclosed commission arrangements remain covered by the separate regulatory process established following the Supreme Court judgment [2] and the FCA's proposed industry wide redress scheme [3].

Likewise, the decision does not affect consumers exploring a PCP claim or other complaints linked to PCP car finance agreements.

Why the cases are different

The High Court case focused on how long consumers should have to bring certain complaints involving overdrafts and credit cards before the Financial Ombudsman Service.

The FCA car finance review concerns whether commission arrangements between lenders and motor dealers created unfair relationships that resulted in car finance mis-selling or mis-sold car finance.

Although both cases involve consumer finance, they are based on different legal issues and different regulatory frameworks.

What it means for motorists

For motorists affected by the car finance scandal, the latest judgment does not change eligibility for potential car finance compensation.

Drivers considering a PCP compensation claim or other PCP car claims should continue following updates from the FCA as the proposed redress scheme progresses through ongoing legal challenges.

Similarly, consumers completing a car finance refund check or PCP claim check can continue to assess whether they may be eligible for compensation under the existing FCA process.

Those who think they have been mis-sold PCP car finance should continue to wait for official updates, as the High Court decision does not change the regulator’s current proposals.

Wider implications for financial complaints

Although the ruling does not directly affect the motor finance review, it may have broader implications for how historic financial complaints are considered in future.

The judgment reinforces the importance of statutory time limits and may influence how similar arguments are approached in other consumer finance disputes.

For now, however, motorists pursuing a car finance refund or PCP refund should be aware that the FCA's motor finance review remains separate from this case.

Recent legal challenges to the proposed compensation scheme mean widespread payouts 2026 are now considered unlikely, but the regulator has made clear that work on the redress programme continues.

Consumers considering a car finance claim or PCP finance claims should therefore treat the High Court judgment as a separate legal development rather than a change to the current motor finance compensation process.

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References:

1. the High Court ruled that the Ombudsman had made a fundamental error of law by extending complaint deadlines beyond the framework established by the Financial Conduct Authority - https://www.ft.com/content/538b146f-b095-46f8-836d-c68f053fe31b
2. Supreme Court judgment - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
3. the FCA's proposed industry wide redress scheme - https://www.fca.org.uk/publication/policy/ps26-3.pdf