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December 19, 2012 6:47 pm
Raphael Geys, SocGen’s former head of European fixed income, based in London, brought the case after his contract was terminated at the start of the financial crisis.
His lawyers say the ruling means that Mr Geys will now be able to pursue further legal claims against SocGen amounting to several million euros, in addition to receiving the €12.5m payment.
The Belgian, who had previously held senior positions at UBS and Merrill Lynch, brought the case about his entitlements under the terms of his employment contract.
SocGen, France’s second-largest bank by market value, had claimed Mr Geys was entitled to a payment of no more than €7m. Mr Geys claimed he had his employment contract terminated in November 2007 and received a draft severance agreement weeks later.
Mr Geys won his case in the High Court in 2010. But the decision was later taken to the Court of Appeal, which ruled on a number of points in the French bank’s favour, including the issue of when Mr Geys’ contract was terminated. This was found to be in December 2007 rather than January 2008.
This ruling would have reduced the potential amount awarded to him by €2m because the termination payment was calculated on a less favourable basis.
On Wednesday the UK’s highest court ruled in Mr Geys’ favour and found SocGen was not entitled to terminate Mr Geys’ contract by simply moving notice pay into his bank account rather than notifying him properly.
Lord Sumption, one of the justices who heard the case in the Supreme Court, noted in the ruling that Mr Geys was a “lucky man” with a “responsible and highly paid job”.
Lord Sumption also observed that “fortunately for Mr Geys, SG did not understand their own contact” and that the bank’s “breach . . . will have brought him a windfall amounting to several million euros”.
Mr Geys’ lawyer, Tom Custance, partner at Fox Williams, said the outcome vindicated their decision to take the case to the Supreme Court.
SocGen declined to comment on the ruling.
In the High Court in 2010, Judge George Leggatt rejected the bank’s arguments that Mr Geys had “lost any right to receive a termination payment, or any other payment” by pursuing employment-related proceedings.
Court documents produced in the earlier High Court hearing claimed the banker believed he had been dismissed for “being too successful” in his role “because the provisions in his contract were considered by the bank to be too generous”.
Mr Geys, who was paid a basic salary of £150,000, claimed that during his three years at the bank he was responsible for more than doubling the gross revenue of his division from €205m to €440m.
The legal wrangle is one of a number relating to bankers’ severance and bonuses which have reached the courts, although this is the first of its kind to reach the Supreme Court.
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