The Court of Appeal has refused to reverse a High Court ruling that Dresdner Kleinwort and Commerzbank should pay bonuses to more than 100 bankers, gifting Stewarts Law and Mishcon de Reya a win over Linklaters.
The CoA was unanimous in its rejection of the case which was led by Matrix Chambers’ Thomas Linden QC instructed by Linklaters partner Nicola Rabson.
Stewarts Law partner Clive Zietman acted for 83 respondents instructing 4 Pump Court’s Nigel Tozzi QC, while Mishcon partner Mark Levine instructed Essex Court’s Andrew Hochhauser QC for 21 respondents.
The appellants had sought to overturn a High Court ruling handed down last year (12 May 2012), which ordered the bank to hand over €52m to the claimants who had been denied bonuses.
The claim was launched in September 2009 after Dresdner Kleinwort reneged on promises to hand over bonuses it had promised to mitigate the risk of significant staff defections. The FSA was told of the plan by the bank in June 2008.
Instead of receiving their traditional Christmas bonus letter, however, the claimants were told that any bonus would be subject to a so-called material adverse change clause (MAC), effectively meaning that the bonus would be paid in February pending the financial performance of Dresdner Kleinwort. Consequently payments to staff were reduced by 90 per cent.
The CoA rejected an appeal by the bank that the MAC clause was not legally binding. It found that the bank had breached its contractual obligations.
“In my view there was a very strong presumption that a promise of this nature would be intended to be legally enforceable, and there was a whole series of matters supporting that conclusion,” Lord Justice Elias stated.
“Perhaps the critical one is that this was a promise made in the context of a pre-existing legal relationship.”
Zietman welcomed the ruling. In a statement he said: “This is not just a victory for my clients. It is a triumph for common sense and for some very well-established principles of English contract law. It is a great pity that the bank saw fit to contest so vigorously and for so long, a case that could so easily have been avoided.”
Levine added: “We welcome the Court of Appeal’s decision confirming that the bank breached its contractual obligations by failing to pay retention awards promised to our clients in exceptional circumstances.”
For the appellant (1) Dresdner Kleinwort and (2) Commerzbank
Linklaters partner Nicola Rabson instructed Matrix Chambers’ Thomas Linden QC to lead Brick Court’s Martin Chamberlain (now a QC) and Oliver Jones
For the respondents (1) Richard Attrill & Ors
Stewarts Law partner Clive Zietman instructed 4 Pump Court’s Nigel Tozzi QC to lead Kate Livesey of the same set
For the respondents (2) Fahmi Anar & Ors
Mishcon partner Mark Levine instructed Essex Court’s Andrew Hochhauser QC to lead David Craig of the same set