FLA recruits legal heavyweight

Edward Peck, Finance Connect CEO, assesses the FLA’s decision to appoint a General Counsel at a pivotal moment for the consumer, motor and asset finance sector

The Finance & Leasing Association’s (FLA) decision to appoint Jeremy Barton as its first General Counsel – bringing in a legal heavyweight who has served as General Counsel of KPMG UK as well as with a range of professional services groups globally – is the clearest signal yet of its determination to deliver greater value to members and to engage effectively with regulators and government as it prepares to respond to the Financial Conduct Authority’s (FCA) proposals for compensation for mis-sold auto finance deals.

Following the Supreme Court’s August 2025 judgment relating to commission disclosure failures the FCA announced a consultation on a proposed industry-wide Section 404 redress scheme, which closed at the end of the year.

Redress scheme design

The proposals as laid out would cover approximately 14 million motor finance agreements entered between April 2007 and November 2024, with estimated consumer redress of £8.2 billion and total scheme costs — including implementation — approaching £11 billion.

The regulator maintained that such a scheme covering all finance agreements made during the time period is the most efficient way to deliver consistent compensation to consumers who were treated unfairly, and would provide certainty for the market and consumers alike.

FLA objections

However the FLA challenges this, warning in its detailed consultation response that “the scheme as drafted cannot deliver the fairness, simplicity, finality, efficiency or certainty the FCA set out as its own guiding principles.”

The association argues that the FCA’s proposed liability tests in their current form are too broad and too blunt, and as a consequence would trigger redress payments to millions of customers who were not in an unfair relationship and suffered no actual financial loss.

The FLA has proposed alternative methodologies for assessing liability and loss, and has been direct about the operational burden: requiring lenders to trace and contact customers who are not owed anything, it said, is “disproportionate, expensive, and risks overwhelming the system for no consumer benefit.”

Decision time

The FCA has signalled it intends to publish final rules in early 2026, which the regulator defines as ‘either February or March’. Once those rules are published, a clock starts ticking. Under Section 404D of FSMA, there is a defined window — likely expiring around May or June 2026 — within which the industry could formally challenge the rules.

That is the pressure point. The industry must decide whether any changes are sufficient for all parties to accept a scheme it has previously criticised, continue pushing for reform through engagement, or mount a legal challenge. Each path carries significant risk and cost, but if the FCA maintains its proposed framework without modification, so does accepting a scheme that could impose disproportionate liability on lenders who maintain that no unfair relationship arose in many of the cases that would fall within scope.

Shanika Amarasekara, the FLA’s CEO, has been clear on the divide, stating:

“The most important point is simple: a redress scheme must provide redress to those who have suffered loss as a result of an unfair credit relationship. Where we differ from the FCA’s proposals, it is because the evidence shows there are fairer, more targeted and more efficient ways to achieve that outcome.”

Barton appointment

Barton’s appointment can be seen as underlining the FLA’s stated determination to “create a scheme that is workable and credible for all”. Prior to KPMG, his CV includes global general counsel roles at The Boston Consulting Group, Ernst & Young Global, and Barton also served as Deputy General Counsel at Andersen Worldwide.

Barton’s background in advising boards and senior leadership on complex regulatory, risk, and strategic matters at the highest level suggests the FLA does not intend to back away from dealing with the complexity and scale of what is being proposed in its discussions with the FCA. It tells members that the association is investing in the infrastructure to support members with the insight and judgment needed to navigate a rapidly evolving regulatory landscape.

The coming months will determine whether the motor finance industry faces a redress scheme it can live with, or one it continues to contest. Either way, the FLA has made clear that it is not going into that process lightly.