The UK’s financial watchdog has said it will urge the Supreme Court to quickly decide whether to allow lenders to appeal against a landmark ruling over car finance commission deals.

The Financial Conduct Authority (FCA) also said it was preparing to give lenders more time to deal with an expected flurry of customer complaints.

Last month, the Court of Appeal sided with consumers in a row over commission earned by selling car finance loans.

It ruled that any dealers receiving commission from lenders must ensure their customers are fully informed about the arrangement.

The lenders involved in the cases, including Close Brothers Group, are expected to appeal against the ruling by taking it to the Supreme Court – the highest court in the UK.

The FCA said it will write to the Supreme Court asking it to decide quickly whether it will give permission to appeal and, if it does, to consider it as soon as possible.

This is because car finance firms and consumers need clarity over the law, the watchdog said.

It also said it was consulting on extending the time that lenders have to handle commission complaints, with firms expected to receive a high volume of complaints in response to the recent Court of Appeal judgment.

The issue has had significant knock-on effects for high street lenders who are preparing to face a potentially large bill to compensate customers over several years.

Santander’s UK division last month delayed the publication of its quarterly financial results to consider the impact of the Court of Appeal judgement.

Lloyds previously said it was setting aside about £450 million to cover the potential cost of handling complaints and any redress.

It comes as the FCA is currently looking into whether people could be owed compensation for being charged too much for car loans, following the high number of complaints.

The review relates to so-called discretionary commission arrangements prior to the practice being banned in 2021.

The watchdog said its own probe will be influenced by any decision of the Supreme Court to hear an appeal.