The UK Supreme Court has declined to allow Reeves’ Motor Finance to intervene in the case.

(Bloomberg) — The UK’s Supreme Court refused to let the Treasury intervene in a landmark court case over controversial car loans, dealing a blow to Chancellor Rachel Reeves who had sought to argue that the suit was hindering Britain’s regulatory environment. The Treasury said last month that the case over historic practices in car financing has the potential to cause considerable economic harm and hinder the availability of auto loans in the country. A spokesperson for the Supreme Court, which is scheduled to hear the case in early April, didn’t give a reason for the refusal. The Treasury didn’t immediately comment. Shares in Lloyds Banking Group Plc fell as much as 4%, while Close Brothers Group Plc declined as much as 15%.  The case, and a related regulatory inquiry into the matter, are weighing on shares of UK banks as investors fear that lenders could face costly compensation bills for consumers impacted by the practices.  The UK’s Financial Conduct Authority, meanwhile, is intervening in the dispute between lenders and several customers.   “To the extent that the FCA is likely to be involved in any future redress programme, this may be seen as a positive, particularly if the FCA was to share a similar view to HMT with regard to how potential future redress should be calculated,” Gary Greenwood, analyst at Shore Capital, wrote in a note. “Ultimately, the situation and potential outcome remains subject to significant uncertainty.” Analysts at Bank of America Corp. recently estimated that the industry could face as much as £38 billion in costs tied to the motor finance saga. Lloyds, the biggest provider of car finance, could be on the hook for £3 billion, they found. The bank has has already set aside £450 million ($589 million) to pay for possible compensation and other costs.  Close Brothers said this month it plans to set aside a first-half provision of £165 million ($205 million) for possible compensation and other costs related to the case and regulatory probe.  –With assistance from Philip Aldrick. (Updates with share prices, analyst comment from third paragraph.) More stories like this are available on bloomberg.com ©2025 Bloomberg L.P.