For all the attention on motor finance over the past couple of years, much of the conversation has focused on legal judgments, regulatory developments and what any future redress arrangements might look like. But while firms have been watching those developments slosely, claimant activity hasn’t stood still.
The recent Court of Appeal ruling allowing thousands of motor finance claims to continue progressing through collective legal action is the latest reminder of that. By allowing claims to be managed through a small number of grouped or “omnibus” claim forms, the ruling creates a more efficient route for claimant firms to pursue large volumes of cases.
The challenge isn't just the claims themselves
When the FCA talks about motor finance, its focus is not simply on legal liability or the mechanics of any compensation calculation. Its narrative has been about whether customers lost out because commission arrangements were not properly disclosed – and how any resulting harm can be addressed in a way that is orderly, consistent and efficient. Firms that have been through major remediation, complaints or redress programmes know that delivering on that kind of regulatory intent depends heavily on operational execution – the ability to cope when complaint volumes increase.
A rise in complaints or claims has a habit of exposing weaknesses that aren’t always visible during business-as-usual operations. Teams that were coping comfortably suddenly face growing backlogs. Quality assurance processes come under pressure, management information becomes harder to maintain and experienced handlers become more difficult to secure.
The question becomes less about whether claims are arriving and more about whether the operation can respond effectively when they do.
Waiting for certainty has its own risks
It’s understandable that many firms are reluctant to commit significant resource while aspects of the motor finance landscape remain uncertain. The difficulty is that operational demand doesn’t usually wait for complete clarity.
The Court of Appeal ruling doesn’t establish liability, nor does it answer broader questions about the future shape of motor finance redress. What it does demonstrate is that court-based claims continue to move forward and that claimant firms continue to pursue them. This will likely look like an increase in customer contact, complaints, information requests and claims activity. As volumes build, firms can quickly find themselves needing additional capacity, stronger oversight and access to specialist resource.
Important questions to consider now include:
- Could existing teams absorb additional workload without creating backlogs?
- Do you know how much spare capacity actually exists within the operation?
- How quickly could additional complaint handlers be mobilised?
- Would quality assurance frameworks scale with increasing volumes?
- Could you maintain fair and consistent customer outcomes across multiple teams working at pace?
- Would senior management have the visibility needed to spot emerging risks and make decisions quickly?
Answers to such questions are likely to determine how successfully firms respond if claims volumes start to increase.
The firms that perform best usually prepare early
One of the common themes across large-scale complaints and remediation programmes is that successful organisations rarely start planning after the pressure arrives. That doesn’t necessarily mean building large permanent teams or investing heavily before it’s needed. It means understanding where potential pressure points exist and having realistic plans in place.
For some firms, the biggest challenge may be capacity. For others, it may be governance, quality assurance or access to experienced resource. What matters is knowing where vulnerabilities sit before they are tested.
But readiness doesn’t need to become a major project. Often, it starts with asking a handful of straightforward questions about capacity, resourcing, governance and oversight. That’s why we’ve created a simple 60-second stress test for motor finance lenders. Built around six practical questions, it provides a quick sense-check of how prepared your operation may be if claims activity increases.
While the future shape of the motor finance landscape continues to evolve, one thing is already evident – claimant firms are preparing for volume.
If you’re reviewing your operational readiness for motor finance complaints, redress or remediation, Momenta can help you assess capacity, strengthen controls and mobilise specialist support at pace. Get in touch today to discover how we can help.
