Bankers win appeal over £44m in unpaid bonuses

Commerzbank furious at losing case over payouts cut after a takeover

The German banking giant Commerzbank has expressed anger after the Court of Appeal upheld a decision that more than 100 London investment bankers should receive €52m (£44m) in unpaid bonuses.

Commerzbank responded in unusually strong language, saying it was “disappointed” at the “regrettable” ruling. “In other jurisdictions, national courts upheld Commerzbank’s position,” said the bank, noting how a court in Germany rejected a similar claim, while Italian and Japanese courts have also been more favourable.

Commerzbank said it was particularly surprised given “the ongoing regulatory, public and shareholder calls to establish a sound relationship between banks’ performance and variable remuneration”.

The 104 bankers said they were given a guarantee about their bonuses at a meeting with the senior management of their then employer, Dresdner Kleinwort, in August 2008.

Commerzbank bought Dresdner soon afterwards and insisted that the bonuses were “provisional”, arguing that it was “reasonable and rational” to cut them by 90 per cent as the bank made a huge loss.

The bankers sued and have won at every turn since, with the Court of Appeal upholding the verdict last May of the High Court. Several bankers are in line for at least £1m each.

Clive Zietman, the head of commercial litigation at Stewarts Law, which acted for 83 of the bankers, said: “This is not just a victory for my clients. It is a triumph for common sense and for some very well-established principles of English contract law. It is a great pity that the bank saw fit to contest so vigorously and for so long, a case that could so easily have been avoided.”

Mishcon de Reya acted for the other 21 bankers.

The German bank, which is advised by the City solicitors Linklaters, is “considering its legal options”, which could involve going to the Supreme Court.

Paul Quain, a partner at GQ Employment Law, said: “The High Court ruling was quite radical and I’m surprised that it’s been so strongly endorsed by the Court of Appeal. This is going to cause significant problems for financial services employers. This ruling confirms that banks need to be extremely cautious when communicating with staff about their pay and bonuses, even in an informal manner.”

Another law firm, which did not wish to be named, said: “Employers should closely review the wording of any express power to make unilateral changes to terms and conditions of employment contained in employees’ contracts.”

Dresdner Kleinwort’s use of the company intranet to broadcast the “town hall” meeting in August 2008, when the decision was made to guarantee bonuses, also proved crucial. The court ruled this broadcast supported the case of the 104 bankers. Legal observers suggested that employers will need to be more careful about communicating online with staff orally, even when no written record is kept.

See you in court: The bonuses dispute

August 2008

Bankers in London say Dresdner Kleinwort guarantees them a €400m (£340m) bonus pool. In the same month, Commerzbank agrees to buy Dresdner from Allianz for €9.8bn

February 2009

Commerzbank cuts bonuses

September 2009

Dozens of Dresdner bankers sue

January-May 2012

High Court hearings; Commerzbank loses the case

November 2012

Commerzbank is given the go-ahead to appeal

Start your day with The Independent, sign up for daily news emails
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before