Lenders across the City are breathing a sigh of relief after today’s landmark Supreme Court ruling, which upheld the appeals of two banks in the high-profile motor finance commission case.

This highly anticipated legal decision marks a significant victory for the lending sector, as the UK’s top court sided with Close Brothers and FirstRand Bank.

The Lord Justices were tasked with deciding whether to overturn a controversial Court of Appeal ruling from October, which found it unlawful for banks to pay commissions to car dealers without obtaining the customer’s informed consent.

The decision curbs a hit for the banking sector which analysts projected could cost up to £30bn.

Lord Justice Reed, President of the Supreme Court, clarified ahead of the ruling it had handed down the judgment when markets were closed for the weekend after Financial Conduct Authority (FCA) advised it risked “market disorder” if announced in regular trading hours.

He said: “The markets will need time to digest and consider its implications.”

The case stemmed from three individuals who sought legal action against the banks in different local courts across England. The cases of Hopcraft, Johnson and Wrench were ultimately merged at the Court of Appeal.

The Supreme Court found “customers claims against the lenders cannot succeed in equity or in tort”.

But the Court did rule in favour of Johnson, who will be receiving commission and interest for his case, after Lord Reed said his commission was “unfair”.

Despite the relief for Close Brothers, the upholding of Johnson’s case, which was with First Rand, suggests the door is not fully closed for motor finance complaints.

A spokesperson for the Treasury said: “We recognise the issues this court case has highlighted.