At all costs
9 March 2011 | By Katy Dowell
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When a corporate client calls in Brick Court’s Jonathan Sumption QC to lead its legal team, it is calling in the big guns to fight off a case whatever the financial cost.
Being the country’s top barrister means it is rare for him lose a case, whether it be for a high street bank, the government, or a major corporate.
Sumption was widely credited with convincing the Supreme Court that the Office of Fair Trading could not legally investigate banking charges after Barclay instructed him to lead the advocacy in it case (25 November).
He represented the Competition Commission in its successful legal bid to have BAA sell off two airports (13 October) and this week, he is representing Lucasfilm in its Supreme Court battle over the alleged copyright infringement of the Star Wars stormtrooper helmet (5 January).
Every winning streak, however, must reach its end and this week Sumption scored an own goal for Commerzbank and Dredner Kleinwort in the Court of Appeal (CoA).
The 104 claimants are suing the bank over unpaid commissions dating from 2008, in the height of the banking meltdown. There are two group actions against the German banks, the first of which was lalucnhed in September 2009 and the second two minths later, which have been bound together.
Stewarts Law partner Clive Zietman, who is known for his appetite for suing banks, instructed 4 Pump Court’s Nigel Tozzi QC to lead for 83 claimants, while Michcon de Reya partners Mark Levine and Daniel Naftalin instructed Essex Court’s Andrew Hochhauser QC for 21 claimants.
Sumption was instructed by Linklaters partner Nicola Rabson for both defendants.
The group of bankers claim they were promised combined bonuses of up to €52m in bonuses that the bank had previously agreed to honour.
At the first instance Mr Justice Simon dismissed any part of the claim which relied on discussions held between the bank and its employees at a ‘Town Hall’ meeting on 18th August 2008. In that meeting, it was claimed, the Dresdner Kleinwort’s then chief executive Stefan Jentzsch told the staff a €400m bonus pot had been set aside to be distributed amongst them.
The claimants case is supported by Jentzsch while the bank put forward witness statements from its London head of legal John Benson.
Tozzi argued that the CoA should reinstate the validity of the town hall meeting, by dismissing it, he argued, the court was not saving costs and had inhibited the claimants case.
The Chancellor of the High Court Sir Andrew Morritt agreed and said there were points of contention which required a full airing in court and that it must include details of discussions held at the Town Hall meeting.
“It is clear from the evidence, as to which there is no dispute, that the boards of [the banks] intended to establish a guaranteed minimum bonus pool,” the judgment states. “Their intention was communicated by the approved and conventional method of communication to all those eligible for allocation and payment of a bonus out of such pool if their employment continued until the bonus payment date.”
In overturning the first instance judgment in the claimants appeal, the Lord Chancellor put the onus on the defendants to disclose materials relating to the discretionary bonus scheme.
To further compound the loss, the CoA rejected its attempt to have the remainder of the claim struck out because it had little chance of success.
It may not be a complete loss for Sumption, but sources close to the case said he was instructed to make the claim go away. Instead, the court has chosen to give the claimants an airing in court and the key point about whether the Town Hall debate discussions can be included has already been decided.