Experts and politicians have reacted to the Supreme Court's decision to side with lenders and impact the hopes of drivers in receiving compensation.

In a landmark judgement, the Supreme Court ruled that lenders could avoid paying compensation to millions of drivers as they were found not to be liable for hidden commission payments.

A Court of Appeal ruling found that "secret" commission payments were paid by customers to dealers prior to 2021, when the Financial Conduct Authority banned these payments.

In relation to two lenders, FirstRand Bank and Close Brothers, argued that the Court of Appeal had made an "egregious error" in siding with motorists who were not explicitly told about the practice.

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Lord Reed, one of the five justices who heard the case, spoke in the Supreme Court this afternoon, stating that it would allow appeals brought forward by the finance companies.

The Supreme Court only sided with one driver, Marcus Johnson, who argued that the relationship between him and the finance company was unfair, given that the Court of Appeal "made a number of mistakes" in reaching its mistakes.

Johnson has been awarded the amount of a commission, plus interest, while claims put forward by Andrew Wrench and Amy Hopcraft were rejected.

Following the decision, the Treasury said it "respected" the verdict, adding that it would work with regulators and the industry to understand the impact on all involved.

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Bobby Dean, Liberal Democrat for Carshalton and Wallington, warned that it would be 'worrying' if the Government intervened

Bobby Dean MP, Member of Treasury Committee and lead campaigner on motor finance scandal, said it was a "good day" for consumers and a lesson to the industry "that honestly matters".

The Liberal Democrat MP for Carshalton and Wallington added: "The scale of the rip-off is truly shocking. Some people are overpaying interest by thousands of pounds.

"It is now on the Government and the regulator to ensure that people get the compensation they are owed."

However, Dean warned that it would be "extremely worrying" if the Government were to intervene to limit compensation to motorists.

Money saving expert Martin Lewis suggested that any cases relating to discretionary commission agreements (DCA) were "likely" to be upheld by the Financial Conduct Authority (FCA).

The consumer champion noted that other cases could still be brought forward if they resulted in excessive commissions or misleading documents.

However, Robert Whitehead, Chairman of Barings Law, said the Supreme Court decision was a "major blow" to consumer protection, noting that the verdict could have addressed one of the financial sector's "most troubling practices".

He added: "Thousands of car buyers were sold finance deals without ever being told that brokers and dealers were pocketing secret commissions. People unknowingly paid higher interest rates as a result.

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"This practice was wrong, plain and simple, and it's disappointing that the Supreme Court has chosen not to hold the industry accountable."

Courmacs Legal is currently representing 1.5 million consumers and deals with more than four million claims. Darren Smith, managing director of the law firm, said the next chapter would come in September.

He highlighted that the Court of Appeal would be hearing a case relating to the way in which the Financial Services Ombudsman dealt with DCAs.

Smith said: "The FCA have themselves identified this case as being relevant to the actions they may take so we call on the Government, the Regulators, the Lenders and their associations to allow the judicial process to be completed and to respect the rule of law before seeking to interfere in any way with the redress that these victims may be owed."