More than 100 London- based bankers have scored a legal victory against Commerzbank, Germany’s second-largest lender, for slashing their bonuses after huge losses at its former investment banking arm during the financial crisis.
Commerzbank, which has twice been bailed out by taxpayers, said it would seek leave to appeal after High Court Judge Robert Owen ruled it had breached its legal duties by failing to honour about €52m of promised payouts.
The ruling flies in the face of government, public and investor scorn at the size of bonuses paid despite disappointing returns and billions spent by governments on rescuing banks since the 2008 crisis. It could also open the way for disappointed staff to sue other firms over payout disputes.
“We are disappointed with the court’s decision and will seek leave to appeal, It is the bank’s submission that there is every prospect that the Court of Appeal would come to a different view on this matter,” said a Commerzbank spokesman.
The bank had argued that its now integrated Dresdner Kleinwort subsidiary was both justified and obliged to slash 2008 bonuses as losses spiralled to €6.5bn.
It went to the court of appeal last year in an attempt to dismiss the case before it came to trial, but lost.
After a legal battle that has lasted two-and-a-half years, lawyers for the 104 bankers urged Commerzbank to draw a line in the sand.
“The bank’s actions were unwarranted and unfounded in law ... The bank should now do the honourable thing and bring this matter to a close,” said Clive Zietman, a partner at UK firm Stewarts Law, which represents most of the claimants.
One lawyer said the case may set a precedent for other companies. Stefan Martin, employment partner at UK law firm Allen & Overy, said the ruling would “give fresh encouragement” to workers whose company had not delivered on bonus expectations.