The Johnson Remedy — What Is It and Could It Apply to Your Claim?
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
Most PS26/3 car finance claimants will receive compensation calculated using the hybrid remedy. But in serious cases — where commission was exceptionally high — a different calculation method applies: the Johnson Remedy. This page explains what the Johnson Remedy is, where it comes from, and whether your agreement might qualify.
Where Does the Johnson Remedy Come From?
The Johnson Remedy takes its name from Johnson v FirstRand Bank Ltd [2024] — one of three landmark Court of Appeal cases decided in October 2024 (alongside Wrench v Firstrand and Hopcraft v Close Brothers). In Johnson, the Court found that a car finance agreement involving a high undisclosed commission created an unfair relationship under Section 140A of the Consumer Credit Act 1974, entitling the claimant to a full repayment of the commission paid.
The Supreme Court upheld the Court of Appeal’s approach in August 2025, confirming that full commission repayment is the appropriate remedy in cases where the commission was sufficiently high and undisclosed as to make the relationship between the lender and borrower unfair.
What Is the Johnson Remedy?
The Johnson Remedy is a full repayment of the commission paid by the lender to the dealer, plus compensatory interest at Bank of England base rate plus 1% (minimum 3% per year) from the date of each payment.
This is distinct from the standard hybrid remedy, which calculates compensation as the average of (a) the estimated interest overpayment and (b) the commission paid. In cases where the commission was very high, the Johnson Remedy produces a significantly larger payout than the hybrid remedy.
When Does the Johnson Remedy Apply Under PS26/3?
The FCA has reserved the Johnson Remedy for the most serious cases. Under PS26/3, the Johnson Remedy applies where:
- The commission paid to the dealer was at least 50% of the total cost of credit AND at least 22.5% of the loan amount, AND
- The commission was not disclosed or was inadequately disclosed to the customer
This is a high threshold — most agreements will not meet it. The FCA estimates the Johnson Remedy applies to a small proportion of total eligible agreements. However, for those it does apply to, the payout is substantially higher than the hybrid remedy.
How Much More Is the Johnson Remedy Worth?
The difference depends on the specific commission paid on your agreement. In a typical example where commission was 55% of the total cost of credit on a £12,000 loan at 10% APR over 4 years:
- Hybrid remedy payout: approximately £900–1,200
- Johnson Remedy payout: full commission repayment, potentially £2,500–3,500 or more depending on the exact commission amount and interest accrued
Higher-value vehicles — particularly premium brands like Audi, BMW, Mercedes, Porsche and Jaguar — involved larger loan amounts and therefore larger commissions. Johnson Remedy cases are more likely among these higher-value agreements.
How Will You Know If the Johnson Remedy Applies to Your Agreement?
Your lender is required under PS26/3 to assess each eligible agreement against the Johnson Remedy threshold as part of their redress determination. They will apply the higher remedy if the threshold is met — you do not need to specifically request it.
When you receive your redress determination, it will state which remedy was applied and how the amount was calculated. If you believe the Johnson Remedy should have applied but the hybrid remedy was used instead, you can challenge this through the Financial Ombudsman Service.
Related Pages
Scheme 1 vs Scheme 2 — What’s the Difference?
Car Finance Claim Rejected — What to Do
Frequently Asked Questions
How do I find out what commission was paid on my agreement?
Your lender is required to provide this information as part of the PS26/3 redress determination. You can also submit a Subject Access Request (SAR) to your lender to obtain all data held about your agreement, which should include commission details.
I had a very high APR. Does that mean the Johnson Remedy applies?
Not necessarily. The Johnson Remedy threshold is based on commission paid as a proportion of the total cost of credit and loan amount — not the APR directly. A high APR does not automatically trigger the Johnson Remedy, though it may be indicative of a high commission arrangement.
My claim was assessed under the hybrid remedy. Can I challenge this?
Yes. If you believe the commission on your agreement met the Johnson Remedy threshold (50% of total cost of credit and 22.5% of loan amount), you can challenge the determination through the Financial Ombudsman Service.
Does the Johnson Remedy apply to both Scheme 1 and Scheme 2 agreements?
Yes. The Johnson Remedy is available under both schemes where the threshold is met.
You will be redirected to our partner’s website to complete your claim.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
