LONDON — U.K. banks overwhelmingly welcomed a surprise Supreme Court ruling Friday which (mostly) ruled in their favor over allegations they mis-sold motor finance to unsuspecting Brits.

It slashed a redress bill from what could have been £44 billion to much less — but it’s left a whole host of questions still to be answered for the City of London, Britain’s banking regulator — and the cash-strapped U.K. Treasury.

Judges at Britain’s top court ruled Friday that it wasn’t up to motor finance brokers, and in turn banks, to have customers’ best interests at the heart of their decision-making. That closed the door on eye-watering compensation for consumers who argued that hidden commission arrangements in car loan contracts were illegal.

But while that mammoth sum has been ruled out, banks are not entirely off the hook.

In the three cases the Supreme Court ruled on last week, judges said the customer in one of the cases had been treated unfairly due to confusing documentation and a huge commission payment — amounting to 55 percent of the total loan — and should receive that amount back, plus interest.

The U.K.’s finance watchdog has since confirmed it will design a redress scheme in October for consumers that have experienced similar harm. It will run for six weeks, with the first payments made to affected individuals by the start of next year.

Here’s what’s left to clear up.

1) How much will the whole thing actually cost the industry?

Anywhere between £9 billion and £18 billion, with the final redress total landing somewhere in the middle.

Before the Supreme Court ruling, analysts had put the bill at somewhere between £30 billion and £44 billion. Lenders such as Lloyds set aside over £1 billion for potential redress.

Friday’s appeal mostly undid the judgment that estimate was based on, however.

As just one of the three cases heard by the Supreme Court was successful, only a limited number of consumers will now be able to claim they too were treated unfairly. Affected consumers are likely to receive £950 or less each.

The exact parameters of the redress scheme, to be designed by the Financial Conduct Authority in October, are still be worked out. The FCA has given a £9-18 billion estimate — but even it thinks numbers at the top end of this are very unlikely.

Instead, the regulator thinks it’ll land somewhere in the middle of that, aligning with analysts such as RBC which estimates a sector impact of £11.5 billion — £3.8 billion for banks, and £7.7 billion for nonbanks.

The FCA has said any redress scheme should avoid pushing a bank into failure. So the regulator now has to walk the line between addressing consumer harm and limiting the impact on the market.

2. What’s unfair?

Finding the definition of when a consumer has been treated “unfairly,” as per the Consumer Credit Act, will be the key to determining which contracts are now eligible for compensation.

In the third of three cases ruled on on Friday, judges said the compensation paid — 55 percent from the bank to the car broker — was a “powerful indication” of an unfair relationship.

The Financial Conduct Authority will now have to decide where to draw the line. If 55 percent is unfair, is 50 percent unfair? What about 40 percent?

In the U.K.’s biggest previous consumer scandal, over Payment Protection Insurance, the Supreme Court ruled that a failure to disclose commission of 50 percent or more gave rise to an unfair relationship under section the Consumer Credit Act.

Experts believe this could be used to inform the FCA’s thinking this time around too.

“The consultation will need to consider whether a range of factors together amount to unfairness,” RBC analyst Benjamin Toms wrote in a Sunday note. “These factors could include the size of the commission, the nature of the commission, the characteristics of the consumer, compliance with regulatory rules and the extent and manner of disclosure.”

In a call with analysts Sunday, FCA chief executive Nikhil Rathi was giving little away. “I can’t give you a crystal clear steer on a single number because so much will depend on the context of each agreement overall,” he said.

3. Which cases will be included?

Banks immediately pushed back after the FCA published a statement Sunday setting out its thinking on how the future redress scheme will look.

The regulator said the scheme should cover arrangements dating back to 2007, as this is consistent with the complaints the U.K.’s Financial Ombudsman Service can consider. But the Finance and Leasing Association, the main lobby group for motor finance lenders, argues cases should have a statute of limitations.

“We have concerns about whether it is possible to have a fair redress scheme that goes back to 2007 when firms have not been required to hold such dated information, and the evidence base will be patchy at best,” the group’s director Stephen Haddrill warned.

The FCA also wants to include discretionary and non-discretionary commission arrangements in its compensation plan. The former means a broker could adjust the interest rate offered to a customer if incentivized by the bank to do so. The latter refers to fixed commission.

The case in which the Supreme Court ruled in favor of the consumer was a non-discretionary arrangement so the regulator will have to assess in which scenarios redress is due.

Discretionary commission arrangements have been banned by the FCA since 2021 and the regulator was reviewing practice in the market anyway.

A separate Court of Appeal hearing between Barclays bank and the Financial Ombudsman Service on discretionary commission arrangements is slated for September, after a lower court ruled against Barclays late last year, leading to the bank appealing. That will also inform the FCA’s thinking.

4. Will Rachel Reeves stay away?

Before the ruling, reports were swirling that Chancellor Rachel Reeves, the U.K.’s top finance minister, would intervene to put in place a law circumventing the Supreme Court judgment if its ruling had ended up leaving banks on the hook for huge redress.

But that was when analysts thought the redress scheme would cost lenders £44 billion, and hurt the U.K. as a place to invest. So, is a max £18 billion bill palatable enough that Reeves will stay away?

On Monday, Prime Minister Keir Starmer’s official spokesperson said: “We respect the judgment from the Supreme Court, and we’ll work with regulators now and the industry to deliver the scheme that the FCA has set out.”

He added: “We want to make things right for consumers. We want to restore trust in the car finance market and make sure that lenders are playing fair. So we will obviously support the FCA in running this consultation.”

Reeves and the Treasury have remained notably quiet, beyond a generic statement Friday. As the chancellor has thrown her weight behind boosting the City of London to help Britain’s ailing economy, she may still be considering the impact on the financial services sector and whether any intervention is needed. The Treasury declined to comment.

5. Is the fight now over for the banks?

FLA’s Haddrill said Friday that the judgment was an “excellent outcome” for lenders. The stocks of Lloyds Banking Group, Barclays and Close Brothers — major car finance lenders — all jumped on Monday as investors breathed a sigh of relief.

But there’s still potential for the redress scheme to upset the sector, which could challenge the FCA at the U.K.’s Upper Tribunal — potentially sending the topic straight back to the courts to thrash out. So there could be more fireworks to come.