A Clear Divide – UK Supreme Court Restricts the Tort of Bribery to Fiduciary Relationships and Rejects Implied Dealer Loyalty in Motor-Finance Transactions

Introduction

The decision in Hopcraft and another v Close Brothers Ltd; Johnson v FirstRand Bank Ltd t/a MotoNovo Finance; Wrench v FirstRand Bank Ltd t/a MotoNovo Finance ([2025] UKSC 33) addresses three conjoined appeals arising from commonplace “three-cornered” motor-finance transactions. Each appeal revolved around undisclosed or partially disclosed commissions paid by finance companies to car dealers for introducing consumer hire-purchase agreements.

• Appellants (Lenders): Close Brothers Ltd & FirstRand Bank Ltd (MotoNovo Finance).
• Respondents (Customers): Ms Hopcraft (with her father), Mr Wrench (two separate agreements) and Mr Johnson.
• Central Issues: (i) Do dealers owe customers fiduciary or “disinterested” duties when sourcing finance? (ii) Does the common-law tort of bribery extend beyond fiduciary relationships? (iii) When is a lender–borrower relationship “unfair” under s.140A Consumer Credit Act 1974 (CCA)?

Summary of the Judgment

• No fiduciary duty: A motor dealer, still acting as an arm’s-length seller, does not assume a fiduciary obligation of undivided loyalty (or any supposed “disinterested duty”) merely by sourcing a finance package for a customer.
• Tort of bribery limited: The Supreme Court reaffirmed the existence of the tort but confined it to situations where the payee owes a fiduciary duty. Without such a duty, commissions are not actionable bribes at common law.
• Disclosure threshold: The Court rejected the Court of Appeal’s “half-way house” (from Hurstanger) that disclosure of the possibility of commission suffices at common law. Full informed consent is needed to defeat both common-law and equitable claims where a fiduciary exists.
• Hopcraft & Wrench fail: Their bribery and dishonest-assistance claims collapse because the dealers owed no fiduciary duty; no “disinterested” duty survives.
• Johnson partly succeeds: Although his bribery/dishonest-assistance case fails for the same reason, the relationship with the lender was held unfair under s.140A CCA, largely because a huge undisclosed commission (≈25 % of the loan) and an undisclosed tie between dealer and lender skewed the transaction. Remedy: repayment of the commission with interest.
• Regulatory harmony: The judgment emphasises that the Consumer Credit Sourcebook (CONC) and the CCA remain the principal consumer-protection tools; courts should not impose fiduciary obligations that would collide with this calibrated regulatory scheme.

Analysis

A. Precedents Cited and Re-evaluated

• Equity & Fiduciary Profits: Keech v Sandford, Boardman v Phipps, FHR European Ventures, Rukhadze v Recovery Partners.
• Classic Bribery Trilogy: Salford Corp v Lever (1891), Grant v Gold Exploration (1900), Hovenden v Millhoff (1900).
• 20th-Century Landmarks: Mahesan v MGOCHS (PC 1979) – affirmed automatic recovery of bribe; Reading v AG (HL 1951); Attorney-General for Hong Kong v Reid.
• Modern Dealer Cases: Hurstanger v Wilson (2007) and Wood v Commercial First (2022). Wood coined the “disinterested duty” concept now rejected.
• Statutory context precedents: Plevin v Paragon (2014) and Smith v RBS (2023) on s.140A CCA.

B. Legal Reasoning of the Supreme Court

1. Fiduciary yardsticks

• A fiduciary owes single-minded loyalty and is bound by the no-profit and no-conflict rules.
• Such duties arise only where the supposed fiduciary has undertaken (expressly or impliedly) to act exclusively for another. They are not implied merely because one party is influential, trusted or better informed.
• The dealer remains an arm’s-length seller throughout; helping a buyer obtain finance is an ancillary sales function, not an altruistic undertaking.
• Therefore no fiduciary duty – and no “lesser” disinterested duty – can be implied.

2. Tort of bribery confined

• The Court declined lenders’ plea to abolish the tort but restricted its scope.
• Essential ingredients now crystallised: (i) a fiduciary payee; (ii) knowledge by the payer that the payee is fiduciary; (iii) a benefit undisclosed to and unconsented by the principal.
• Consequently, secret commissions to non-fiduciaries are outside the tort; other remedies (misrepresentation, conspiracy, s.140A CCA) must fill any gap.

3. Disclosure – one standard, not two

• The theory from Hurstanger that partial disclosure defeats common-law bribery but not equity is jettisoned; full informed consent is required across the board where fiduciary duties exist.

4. Interplay with statute & FCA rules

• CONC already obliges brokers to disclose commissions that may sway advice; Parliament chose a nuanced regime, not absolute fiduciary loyalty.
• Imposing fiduciary duties would distort this calibrated framework and usurp regulatory policy-making.

C. Impact of the Judgment

• Thousands of pending motor-finance “secret commission” claims anchored on fiduciary or “disinterested” duties will likely fail unless the broker was genuinely acting as a fiduciary (rare).
• Lenders avoid substantial restitutionary exposure – a major relief for the industry – but remain at risk under s.140A CCA if commissions are excessive or undisclosed.
• Regulators may tighten disclosure/harm rules rather than rely on courts to graft fiduciary norms onto commercial sales.
• The reasoning extends beyond cars: any seller-broker hybrid (e.g., furniture, solar panels) gains clarity that mere credit introduction per se does not trigger fiduciary obligations.

Complex Concepts – Simplified

Conclusion

The Supreme Court has redrawn the boundary between private-law duties and regulatory consumer protection:

• Bribery is alive — but only where a fiduciary exists. The attempt to attach bribery liability to a “disinterested” credit-broker duty is overruled.
• Car dealers are not fiduciaries when merely arranging finance to facilitate their own sale.
• Regulatory rules, not fiduciary law, police most commission issues. CONC disclosure requirements and s.140A CCA remain the main remedies for consumers.
• Excessive undisclosed commission can still be penalised under the CCA: Mr Johnson’s success shows that “unfair relationship” is a potent, fact-sensitive tool.

Overall, Hopcraft, Johnson & Wrench re-balances the interaction of common law, equity and statute, giving certainty to the motor-finance industry while preserving proportionate consumer protection through tailored legislation.