Seventy-two City bankers are suing Dresdner Kleinwort and Commerzbank for €33m ($47.8m) worth of unpaid bonuses in the biggest case of its kind in the UK.
The lawsuit, filed on Tuesday in the High Court, is the latest sign that bankers are ready to fight for their pay packets in spite of public outrage over the size of the rewards on offer in an industry widely blamed for the financial crisis.
An additional 25-30 former employees at Dresdner, which was bought by Germany’s Commerzbank late last year, are expected to file a separate suit in the coming weeks.
It will claim that the two banks reneged on explicit promises to pay their bonuses in full.
Lawyers for the traders, many of whom have stayed on with Commerzbank, were quick to distance themselves from the wider battle over excessive remuneration.
Clive Zietman, a partner at Stewart’s Law said: “This case is about English law and an English court will decide on that basis and will not be influenced by politics”.
Employees have historically faced an uphill struggle in big-money bonus disputes, with UK courts backing the principle that the hefty payments are generally awarded at the discretion of financial institutions.
Commerzbank, however, has settled several cases brought by former senior managers at Dresdner Kleinwort, who were claiming they were entitled to “guaranteed” bonus payments.
Four other bankers won an expedited court judgment on a similar claim last month.
The current dispute centres on a €400m bonus pool set aside by Allianz, Dresdner Kleinwort’s former owner, in 2008 to retain staff.
Commerzbank subsequently slashed the size of that pot following a public outcry, awarding many Dresdner workers 10 per cent of what they had been promised.
The amounts being sought in the case range from €45,000 to €1.67m by Jonathan Powell, a senior foreign exchange options trader.
Eight bankers, including Mr Powell, who has recently joined Barclays Capital, are seeking more than €1m.
Commerzbank denied wrongdoing and said it would “vigorously” contest the case in court.
“Dresdner Bank was entitled to take the actions it did,” Dresdner said.
By Megan Murphy in London
Sebtember 08, 2009
Source: The Financial Times