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Friday, 3 July 2026

Compiled with AI from public news sources. Folio is editorial commentary for commercial-awareness practice, not legal advice. Verify any detail against the linked sources before relying on it professionally.

All M&A Capital Markets Banking & Finance Energy & Tech Regulation Disputes International AI & Law

Top Story/Regulation

FCA Partially Suspends Motor Finance Compensation Scheme Pending Legal Challenges, and Warns Insurers Over Poor-Value Legacy Pension Products

The Financial Conduct Authority (FCA) has confirmed that a tribunal has partially suspended its motor finance compensation scheme while legal challenges work through the courts, with the next substantive hearing expected in December or the following February. As a result, lenders targeted by motor finance complaints are not currently required to calculate or pay compensation. The partial suspension represents a significant pause in what has become one of the UK's largest retail financial services redress exercises — the motor finance mis-selling scandal, triggered by a Court of Appeal ruling on discretionary commission arrangements, had raised the prospect of industry-wide liability running into billions of pounds. Separately, the FCA issued a warning to insurance companies that consumers with savings in older pension investment products — so-called 'legacy' funds — may not be receiving adequate value for money. The regulator signalled that firms holding customers in high-cost or underperforming historic products should act to improve outcomes or face regulatory action. Taken together, Thursday's dual interventions reflect the FCA's broadening consumer protection agenda: the motor finance suspension keeps a major liability question live but paused, while the legacy pension warning extends pressure on the insurance and pensions sector to remediate poor-value products proactively. Firms across retail banking, consumer finance, and life insurance face continued compliance demands, and the motor finance proceedings will remain a focal point for financial services litigation practices through at least early 2027.

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Also Today

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Linklaters Advises on Genel Energy's $360m Acquisition of Capricorn Energy

Macfarlanes Raises NQ Solicitor Salaries to £150,000, Matching Magic Circle Pay Benchmark

Big Law Race for AI Directors Intensifies as Firms Struggle to Fill New Role Requiring Decade of Experience

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Travers SmithFieldfisher

“AI directors are Big Law's hottest hire — but a decade-long experience threshold makes the talent pool near…”

Banking & Finance

Lenders Warned to Sharpen Fraud Due Diligence in Private Credit and Asset-Based Lending as Fabricated Collateral Cases Mount

Practitioners specialising in private credit (direct lending by non-bank institutions) and asset-based lending (ABL — facilities secured against a borrower's specific assets suc…

Haynes Boone

“Private credit's bilateral flexibility is also its fraud blind spot — verification rigour is now a front-en…”

Disputes

Hill Dickinson Defeats Wasted Costs Order in UK Appellate Tribunal as Document Non-Disclosure Falls Short of Negligence

Hill Dickinson, the UK law firm, successfully defeated a doctor's application for a wasted costs order before an appellate tribunal this week, with the tribunal ruling that the…

Hill Dickinson

“Non-disclosure alone won't ground a wasted costs order — negligence requires a higher threshold than proced…”

Bigger Picture

Sector Watch

UK M&A Domestic Rebound

H1 2026 data confirms a striking reversal in UK M&A market share: Clifford Chance, Slaughter and May, Linklaters, and Freshfields have retaken the top four adviser positions as UK deal value surged 111% year-on-year to $332.4 billion. This coincides with the CMA escalating the nexfibre–Netomnia fibre merger to Phase 2, signalling that the regulator is deploying its most intensive tools to scrutinise infrastructure consolidation even as deal volumes boom. The combination of record advisory volumes and heightened regulatory scrutiny creates a dual demand for transactional and competition law expertise simultaneously. With worldwide M&A up roughly 50% and mega-deals doubling, the pipeline into H2 looks strong — but the CMA's Phase 2 willingness to intervene on £2bn-range deals suggests competition clearance cannot be assumed, particularly in regulated sectors.

One to Follow

The FCA's motor finance compensation scheme partial suspension — with the next substantive legal challenge hearings set for December 2026 or February 2027 — leaves major UK retail lenders in a prolonged liability limbo

The outcome will determine whether a multi-billion pound redress exercise proceeds in full, partially, or is significantly curtailed, creating sustained demand across financial services litigation, regulatory advisory, and banking finance practices for at least the next eight months. Any resolution — whether by tribunal ruling upholding or overturning the scheme — will also set a precedent for how the FCA designs future sector-wide compensation programmes, making this the most consequential ongoing regulatory proceeding for City financial services practices in 2026–27.

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