No fiduciary duty, no bribe: UK Supreme Court shuts down commission claims

In a landmark decision, the UK Supreme Court in three conjoined appeals has clarified the boundaries of bribery claims, reaffirming that such claims require the existence of a fiduciary duty (Hopcraft v Close Brothers Ltd; Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance; Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance [2025] UKSC 33).

This decision provides critical guidance on the limits of equitable liability, the scope of accessory claims and the appropriate legal framework for addressing undisclosed commissions in commercial transactions. It also offers a valuable comparator for Australian practitioners navigating similar commission-based claims.

The alleged bribes

In all three cases, the customers entered into hire-purchase agreements to acquire vehicles. The finance was arranged by dealers acting as credit brokers for the respective lenders. The lenders paid the dealers commissions for arranging the finance, but these commissions were either not disclosed, or only partly disclosed, to the customers.

Each customer alleged that the undisclosed commission constituted a bribe or secret profit and that the respective lender was liable as an accessory to the dealer’s breach of fiduciary duty. They argued that the dealers owed them fiduciary duties to act in their best interests and that the payment of the commissions breached these duties.

The lenders denied the claims, asserting that the dealers did not owe the customers fiduciary duties and that the payment of the commissions was a standard commercial arrangement.

The UK Supreme Court unanimously dismissed the claims, delivering three key findings regarding the scope of bribery-based liability in commercial transactions:

A fiduciary duty is essential

• A fiduciary relationship is a necessary precondition for any bribery or secret commission claim.

• Fiduciary duties arise only where a person consciously assumes responsibility to act with single-minded loyalty to another, to the exclusion of their own interests.

• In the context of dealer-lender-customer relationships, the dealer’s role as an intermediary pursuing its own commercial objectives is fundamentally incompatible with such a duty.

• The Court rejected the notion of a “disinterested advice duty&rdquo ;– a concept introduced below by the Court of Appeal – as an unwarranted expansion of fiduciary law.

Undisclosed commissions alone are not bribes

• Without a fiduciary duty, the payment of an undisclosed commission is not a bribe or unlawful secret profit.

• This avoids the remedial difficulties that would arise if payments to non-fiduciaries could also constitute bribes.

• The Court cautioned against using bribery law to police all undisclosed commercial arrangements, even those that may appear unfair or lack transparency.

Accessory liability is constrained

• With no fiduciary breach, the lenders could not be liable as accessories.

• The Court reaffirmed that accessory liability requires dishonesty or a fiduciary breach and cannot be extended to arm’s length commercial relationships. The dealers’ role as intermediaries, without authority to act on behalf of the customers, precluded any such liability.

Why this matters in Australia

While Hopcraft is a UK decision, it provides persuasive authority on principles that are highly relevant to Australian commercial law:

• Claims of bribery or secret commission must be anchored in a fiduciary relationship: The decision serves as a reminder that fiduciary duties are not easily implied in commercial transactions. Australian courts are likely to adopt a similar approach, recognising that commercial arm’s length relationships do not easily give rise to fiduciary duties.

• Disclosure practices: For in-house teams, the decision underscores the importance of clear commission disclosure – not to avoid fiduciary liability, but to meet regulatory obligations (for example, under the National Consumer Credit Protection Act 2009 (Cth)). Non-compliance with these obligations can lead to significant penalties and reputational damage.

• Accessory liability is constrained: Alleging that a lender is liable for another’s fiduciary breach requires more than proximity or benefit – it requires a knowing participation in wrongdoing.

Balancing equitable principles and consumer protection

The Hopcraft decision confirms that bribery claims cannot succeed without a fiduciary duty, even in cases where commissions are undisclosed.

The ruling serves as a reminder that fiduciary principles are narrowly applied in commercial contexts, and that consumer protection is best achieved through regulatory compliance and statutory remedies. For Australian practitioners, this underscores the importance of distinguishing between equitable and regulatory obligations when advising on commission arrangements.

For lenders and brokers, this is a reminder to prioritise transparency and compliance.