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.

The UK's Supreme Court will announce a long-awaited ruling on car finance commissions on Friday that could influence whether major banks face a multibillion-pound compensation bill. British lender Close Brothers and South Africa's FirstRand want to overturn a landmark Court of Appeal judgment,