Together with

Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH SCL

• IN OTHER NEWS 🗞

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

I asked AI whether I should walk or drive to a car wash 50 metres away. AI told me to walk. It's only 50 metres, that's a 30-second stroll.

The thing is – you need the car to wash the car.

This “AI test” went round the internet a few weeks ago. I tested it again this week and the AI sometimes gets it right now (these things move fast).

But it's a useful reminder for any aspiring lawyer: AI is better than you at loads of things. It can hold huge amounts of context in its head and never forget a detail. It can draft, summarise and research in seconds – what would have taken you days.

But it's also worse than you at some things that you’d find easy.

Which brings me to Sullivan & Cromwell.

One of the most prestigious firms in the world has just admitted to a US bankruptcy court that an emergency motion it filed contained over 40 inaccurate citations – some of them AI hallucinations, where the tool invented cases that don't exist.

AI use, and its risks, comes up a lot during the law firm application process.

So here's a ready-made structure if you're ever asked about it.

Step 1: Acknowledging the upside – AI is a powerful tool that's already changing how lawyers work. Law firms are using it already.

Step 2: Point out the risks. It has known issues, including hallucinations which can be fatal for law firms. Use the Sullivan & Cromwell case as your example – an elite firm filed AI-generated citations that turned out to be fake.

Step 3: Land the point. The lesson isn't that AI shouldn't be used. It's that lawyers need to verify outputs, not just trust them.

And here's something worth remembering when you walk into that interview.

Most of you reading this have been exposed to AI for a long time now. Maybe you had it throughout university – used it for essays, revision, problem questions, job applications. You already know where it's strong and where it falls over – probably better than the partner across the table, who's learning it on the job.

If it comes up, talk about it confidently (and back yourself).

– Idin

FEATURED REPORT 📰

🚗 The £9.1 billion car finance scheme nobody likes

What’s going on here?

The Financial Conduct Authority (FCA) has built a £9.1 billion redress scheme for 12 million UK drivers who paid hidden commissions on their car loans. This week, the 28-day window to legally challenge the scheme expired.

Consumer Voice, a consumer rights group, got its challenge in just before the deadline – arguing the scheme doesn't pay drivers enough. Lenders are unhappy too, but for the opposite reason.

What was the problem?

For 17 years (2007–2024), lenders paid commissions to UK car dealers on every financed deal.

Dealers had a list of lenders to choose from. But they didn't pick them impartially – they steered customers (pun intended) toward whichever lender paid them the biggest commission.

Lenders funded those commissions by charging customers higher interest rates to begin with – so the bigger the dealer's kickback, the more expensive the loan.

This was just how car finance worked. Around 40% of deals involved a discretionary commission – where the dealer profited directly from charging a higher rate – and 99% involved a commission payment of some kind.

Then in August 2025, the question hit the Supreme Court: was this arrangement lawful?

What did the UK Supreme Court say?

The Supreme Court ruled that hidden commission arrangements could be unlawful – and where they were, a court could rewrite or unwind the loan – but only if it found the relationship "unfair" under s.140A of the Consumer Credit Act 1974.

It said there isn't a clear test. Instead, it's a balancing exercise across six factors.

1. ⚖️ How big was the commission compared to what the customer was paying to borrow?

2. 📑 Was the commission tied to the interest rate (so the dealer profited from charging the customer more)?

3. 👤 Was the customer commercially savvy, or a first-time buyer with no credit experience?

4. 📢 Did the customer know the commission existed, and how much it was?

5. 🚫 How well did the dealer stick to the conduct rules?

6. 🤝 Did the dealer have a hidden arrangement with the lender (like a promise to send them business first) that the customer didn't know about?

These factors have to be balanced case by case. Every claim is fact-specific, every claim needs its own court hearing – and there are 12 million of them.

Instead of letting the courts drown in claims, the FCA chose something faster: an industry-wide redress scheme.

How does the FCA scheme work?

If you took out a car loan between 2007 and 2024, your lender will check whether you qualify and write to you. If you do, they'll send a compensation offer. You can take it, or sue your lender in court – but not both.

Lenders pay for the scheme themselves, and the FCA sets the rules. There are two important constraints.

1. The cap on the FCA. The FCA can't invent new rules about what counts as compensation – the scheme can only pay out what a court would have.

2. The cap on customers. Customers who pick the court route lose access to the scheme entirely. If courts stayed open as a fallback, lenders would face uncertainty for years and the scheme wouldn't deliver the speed it was designed for.

The scheme hasn’t gone unchallenged – both lenders and consumer groups have issues with it.

Why don’t lenders like it?

Most customers won't get their full commission refunded. Instead, they get a payout calculated as an average of two numbers:

1️⃣ How much they were probably overcharged on interest, and

2️⃣ The commission the lender paid the dealer (plus a bit of interest).

Add them together, divide by 2, and that's what the customer gets.

Lloyds, one of the UK's biggest motor finance lenders, says the formula is broken. Using the formula, a customer could get back more than the dealer ever earned in commission – breaking the rule that the FCA can't pay out more than a court would have done.

Why don’t consumer groups like it?

To qualify, two thresholds must be met. The dealer's commission has to be at least 39% of the total cost of borrowing (the interest and fees on the loan), and at least 10% of the loan itself. If you fall below either, you’re out of the scheme.

Consumer groups argue the 39% threshold is wrong. The argument is easiest to see with an example.

Imagine two customers buying the same car from the same dealer with the same commission – but the second has worse credit and pays a higher interest rate.

Here's how the threshold treats them 👇

The result is upside down. The customer who paid more (and is more likely to be the kind of vulnerable buyer the scheme was meant to protect) is the one it excludes.

Consumer Voice – the group leading the challenge – says the threshold shuts out the exact customers who were hurt the most.

Why should law firms care?

Whatever the Tribunal decides, the scheme has already triggered a scramble among law firms and claims management companies to capture a slice of that compensation money.

• 💷 Court still pays better than the scheme. The scheme's average payout is £829, but a court win averages around £1,500. For the right cases, that gap is enough for a law firm or CMC to build a business pursuing the court route instead.

• 🪤 The SRA is watching. Some law firms (not just CMCs) have signed confused consumers up to multiple contracts at once. Those contracts can have exit fees meaning a consumer who wants to switch (or take the scheme money) gets billed thousands. The SRA (alongside the FCA, ICO and ASA) is cracking down on the worst behaviour. Firms doing motor finance work need to assume their conduct is being watched – not just by clients – but by their own regulator.

How can you use this in your applications?

Here are some ways you can use the insights from this story in your law firm applications.

TOGETHER WITH SCL

What’s the easiest way to stay on top of tech, AI and law?

One option is joining the Society for Computers and Law (SCL).

They offer free student membership, giving you access to a specialist community focused on law, technology and AI – including speakers like Sue McLean (Partner, Bird & Bird), and Mark O'Conor (Partner, DLA Piper).

It’s less about “joining a society”, and more about learning directly from people already working in the space.

Here’s what you can get involved in:

• Become a Student Ambassador and represent SCL at your university

• Attend events and hear from lawyers working in tech and AI

• Access mentoring and start building your network early

If you’re interested in how tech is shaping the legal industry, build your understanding alongside your studies.

IN OTHER NEWS 🗞

• 💻️ Freshfields has signed a deal with AI giant Anthropic to build legal AI tools together. The partnership gives the firm early access to future Anthropic models and builds on an existing rollout that already lets more than 5,700 Freshfields staff use Claude through the firm's internal AI platform. The two will work on contract review, due diligence, legal research and "agentic" systems that can handle multi-step tasks. The deal sits alongside Freshfields' existing Google partnership, doubling down on its strategy of using multiple AI providers rather than committing to one.

• 🏠 The Renters' Rights Act comes into force on 1 May. It’s one of the biggest shake-ups to housing law in history. The Act bans no-fault evictions, scraps fixed-term tenancies in favour of rolling agreements, ends rental bidding wars, and sets clearer rules on pets. Landlords will now have to rely on a s.8 notice to evict tenants, which requires stricter grounds like rent arrears or antisocial behaviour. Renters say it brings long-overdue security, while some landlords warn the extra rules are pushing them to sell up.

• 🇦🇪 Law firms in the UAE are calling staff back to the office (and not everyone's happy). US firms including Jones Day and Cleary Gottlieb are pushing lawyers to return to their Dubai and Abu Dhabi offices, months after asking them to work remotely during the US-Israeli conflict with Iran. Some lawyers are pushing back, referencing the fragile ceasefire and the costs of relocating again. To smooth things over, Cleary is covering relocation costs for staff returning to Abu Dhabi.

STUFF THAT MIGHT HELP YOU 👌

• 💻️ Free application advice: Check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.

• 📁 Law firm application bank: A growing library of real, verified successful applications for training contracts and vacation schemes. Helpful if you want to learn from others who answered the same questions you’re stuck on.

• 📝 Write winning law firm applications: A practical course to help you write clearer applications, faster. Avoid common mistakes, learn how to structure answers properly, and get lifetime access to future updates. Try it for 14 days, risk free.