More AIB officials may take legal action over blocked bonuses

FINANCE Minister Brian Lenihan’s bank bonus blocking plan may not be able to prevent more AIB officials from taking High Court cases to receive the money — potentially leaving the state open to the pay-out and expensive legal costs.

Despite Monday night’s decision to stop any bank bonuses being paid out, almost 2,400 employees who were to receive the 2008 bonuses could still take legal cases to do so.

In reality, due to the significant cost of taking a High Court case — which can result in €25-€40,000 in legal expenses — the majority of AIB staff who expected to receive the money are unlikely to go to court.

However, almost a third of those who saw their bonuses cancelled were due to receive between €44,000 and €350,000.

And with up to 91 cases lodged since October alongside the successful €161,000 test case by John Foy before Mr Lenihan’s intervention, the state potentially still faces a mass of High Court and Circuit Court battles which could result in both the bonuses being paid out and high legal costs.

Among AIB staff who were due the 2008 bonus to be paid in 2009 were 62 executives who were set to share €11.11 million — an average of €179,193 per person. Two more executives due the deferred payment in 2010 would have each received just over €350,000.

A total of 674 managers in 2009 and 41 more in 2010 would have shared combined totals of €30.06m and €3.06m — the equivalent of €44,599 and €87,804 per person — while 700 junior managers were to receive €9.2m, or €12,142 each.

A Department of Finance spokesperson has confirmed there is nothing in Mr Lenihan’s bank bonus blocking plan preventing these individuals from taking a High Court case to force the nationalised AIB from handing over this money.

If these cases are successful, the state would also face paying these individuals’ legal fees.

“This is no easy country, legally speaking,” Mr Lenihan confirmed.

McDowell Purcell solicitors, who acted on behalf of bank official John Foy during his recent undisputed High Court case which led to him receiving his bonus, did not return calls on the matter yesterday.

However, 91 similar cases had been prepared before the judgment regarding Mr Foy.

In a statement, the Irish Banking Officials Association (IBOA) said it is discussing the implications of Mr Lenihan’s announcement with its legal advisers. A spokesperson said the union will comment when it had “an opportunity to scrutinise the precise nature and scope of the proposed legislation”.

While the Department of Finance has insisted the Government’s about-turn on blocking the bank bonuses was not the result of any IMF decision on the matter, it has emphasised fresh funds will only be given to AIB if the bonuses are not handed over.

The latest banking stand-off emerged on the same day as the US had raised concerns the Irish Government was failing to bring the sector under control just weeks after the initial September 2008 bank guarantee.

Documents revealed by WikiLeaks show that, as far back as October 2008, the US believed the Government was failing to get a grip on our crippling banking system and was “a bit optimistic” about the sector’s recovery.

This was despite the insistence from both Taoiseach Brian Cowen and Mr Lenihan steps they had taken would ensure the issues were resolved and were supported by international experts.