As expected, Commerzbank has applied for leave from the Court of Appeal to appeal the High Court’s decision in Attrill v Dresdner Kleinwort Ltd.
The High Court found that Dresdner Kleinwort Ltd was liable for the unpaid bonuses of over 100 investment bankers. The employees were told during the negotiations for the sale of Dresdner Kleinwort to Commerzbank that that they would participate in a guaranteed minimum bonus pool of EUR 400 million. This would be divided up on a discretionary basis according to individual performance. It was held that this amounted to a contractual obligation on which the bank could not renege when it faced financial problems. The decision reminded employers of the risks involved when making verbal assurances and of the need to refer expressly to any circumstances which could lead to a bonus being reduced.
Given the potential pay out which would need to be made to cover the bonuses (sums in excess of £42 million), and the significant press coverage involved, it is not surprising that the bank has decided to appeal.
It will be interesting to see how the Court of Appeal responds. Watch this space.
On June 27, 2012