Experts are warning Labour that they should be cautious when potentially interfering in the car finance scandal by putting the future of banks over drivers.
Reports last week suggested that Chancellor Rachel Reeves could intervene in the car finance scandal, and any potential redress compensation scheme.
The issue stems from brokers receiving additional compensation when arranging car finance loans, which was not disclosed to motorists.
According to The Guardian, the Chancellor has considered overruling the Supreme Court under Treasury contingency plans to protect lenders from what could be a £44billion compensation event.
Do you have a story you'd like to share? Get in touch by emailing motoring@gbnews.uk
Legal experts are warning that Rachel Reeves should not put banks ahead of drivers
|GETTY
These retrospective law changes could see the Government have the final say on the handling of commission arrangements to borrowers.
The Supreme Court is expected to give a decision later this week on whether customers may be entitled to billions of pounds in compensation.
Some of the largest lenders and car finance providers have already set aside hundreds of millions of pounds in anticipation of a compensation scheme.
Courmacs Legal is representing 1.5 million people who may have been victims of the car finance scandal, dealing with more than four million claims.
The Supreme Court is expected to deliver a verdict on the car finance scandal soon | PAThey are calling on the Government to protect drivers following the impending Supreme Court decision, rather than putting banks and lenders ahead of them.
Darren Smith, managing director at Courmacs Legal, said: "It is outrageous and an affront to the rule of law that the Treasury is even considering giving motor finance giants a free pass at the expense of millions of hard-working consumers."
The legal firm believes there is a "real risk" to millions of customers who will be harmed if the Government goes through and places a cap or limit on redress.
Courmacs Legal highlighted how banks are posting large profits, yet could potentially be protected by the Government, while drivers are left behind.
LATEST DEVELOPMENTS:
Smith continued, saying: "If our highest courts determine consumers have been wronged by lenders, it would be unconscionable for the Government to send Labour MPs into the division lobbies and make them vote to limit the liabilities of big banks at the expense of their constituents.
"This is something which I, and many of my colleagues in the legal profession, feel strongly about. The Attorney General himself said in a speech last year that the Labour Government would uphold the rule of law 'at every turn'.
"Perhaps Rachel Reeves is having a problem with her sat nav, but we would recommend she heeds the advice of her Cabinet colleague, gets the Treasury back on the right road and affirms that she won't do anything to interfere with the redress for victims of the car finance scandal."
There had been suggestions that the car finance scandal could end up being as big in scope as the PPI scandal, although these estimates have been downgraded.
The car finance scandal could be worth up to £44billion
| GETTYSuggestions from experts, including Martin Lewis, state that motorists could receive an average of £1,100 if they were impacted in the scandal.
A Treasury spokesperson said it does not comment on speculation and would let the appeals process run its course.
It added: "We want to see a balanced judgment that delivers compensation proportionate to losses that consumers have suffered and allows the motor finance sector to continue supporting millions of motorists to own vehicles."
The Supreme Court is expected to pass down its verdict on Friday, August 1.