BANKS saw rocketing share prices yesterday after being saved from paying out tens of billions of pounds in the car finance scandal.
Lloyds saw a jump after the Supreme Court removed the threat of £44billion industry pay-outs.
Shares at the banking group rose eight per cent while Close Brothers soared by as much as 34 per cent at one stage after the Friday ruling.
Barclays saw a jump of two per cent.
Around 14 million drivers could still be entitled to pay worth up to £18billion but only for large commissions seen as unfair, going back to 2007.
The case focuses on commissions paid by the lenders to car dealers with some higher interest rates which were not then properly relayed to buyers.
But judges found dealers did not owe a “fiduciary duty” of loyalty to customers.
There is now concern over the fact firms might have to keep records from decades ago.
John Phillipou of the Finance & Leasing Association said: “I don’t think it’s good for investability that the reason for keeping the data is that you might get sued in 15 years time.”
Chancellor Rachel Reeves was said to be ready to intervene if the bill hit £44billion — due to the damage it could do to the UK as a place of business.
A compensation scheme will be consulted on in October.
Drivers are set to see pay-outs of less than £950 from as early as next year, the Financial Conduct Authority said.
Lloyds had put aside more than £1billion for the fall-out but said any change is “unlikely to be material” for the group.
AlamyLloyds saw a jump in share prices after the Supreme Court removed the threat of £44billion industry pay-outs[/caption]
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