Banks could still face claims for compensation for motor finance commissions, but the extent of the total bill facing lenders is likely to now be significantly reduced.

The Supreme Court has given a boost to banks, their investors and the government by throwing out large parts of last year’s landmark car finance ruling that threatened to unleash a multibillion-pound surge of compensation claims.

A group of lenders won a partial reprieve in a pivotal UK car finance case, after the country’s top court sought to rein in the spiraling saga that’s set to cost banks billions in consumer payouts.