Frankfurt: Commerzbank HQ
By allowing the appeal to proceed, the Court of Appeal has indicated that the bank may have an arguable case against the claim made by the investment bakers, according to London-based specialist employment law firm, GQ Employment Law.
The landmark claim was launched by 104 bankers from DKIB (Dresdner Kleinwort Investment Bank), after it was sold to Commerzbank in early 2009. They claim they were guaranteed a bonus pool for staff of €400m to deal with FSA concerns over excessive staff departures, but the bank only paid out around 10 per cent of this figure after it announced losses at DKIB of €6.5bn. Commerzbank had to turn to the German Government for emergency funding, but in a May judgement, Mr Justice Owen said Commerzbank needed to honour the bankers claim.
Commenting on the appeal court’s decision, Paul Quain, partner at GQ Employment Law, said: ‘This is a major case for all the banks, which will affect what bank bosses can say about bonuses in team meetings to motivate staff. The legal saga over whether these bankers were offered a binding promise on their bonus is now set to proceed to the Court of Appeal.
‘The Court of Appeal is only interested in one thing – whether the judge in the High Court got the principles of law wrong. Here, the appeal court has said that this may have been the case and that Commerzbank should at least be able to argue the matter fully.
‘Irrespective of whether Commerzbank ultimately wins or loses, the clear message for City businesses is that they need to be very careful saying one thing about bonuses in a team meeting, then changing their mind later when it comes to putting things in writing or actually paying the bonuses.’