Three senior investment bankers will collect almost €11m in severance pay and bonuses after winning a legal battle against Dresdner Kleinwort on Friday.
The three men, who include the former head of mergers and acquisitions in the UK, had been pursuing claims against the German bank, which is now owned by Commerzbank.
At the High Court on Friday, Mr Justice Jack ruled that severance payments and guaranteed bonuses in their contracts should be honoured.
Almost €2.5m (£2m) will be paid to John McIntyre, who was head of UK M&A, while Betrand Pinel, former head of global finance, will receive €5.45m. Alberto Piedra, who was head of global banking, will get €3m.
The case demonstrates bankers’ increasing willingness to fight for their pay packages in court, in spite of mounting public anger over their bonuses.
Mr Justice Jack ruled that the case, which was scheduled to be heard early next month, was almost identical to one he had ruled on in July, when he found in favour of four former Dresdner bankers.
“I see no point in this application being heard and wasting the court’s time,” he said before issuing summary judgment.
The court heard that at least one of the bankers was looking to recoup interest on the money at a rate of 8 per cent.
Commerzbank said on Friday: “Given the huge and unprecedented financial losses at Dresdner Bank last year, largely contributed by the investment banking business at Dresdner Kleinwort, Commerzbank contested the bonus and severance claims by the senior management.
“The claims by these individuals resulted from bonus and severance arrangements inherited by Commerzbank, which did not contain a specific provision enabling adjustments to be made to reflect losses.”
In July, Mr Justice Jack backed four investment bankers who had also sued Dresdner over unpaid guaranteed bonuses and severance pay contained in their contracts.
Dresdner, which reported losses of €6.47m in 2008, had written to the men asking them to give up the money because of losses at the investment bank.
However, Mr Justice Jack ruled that Dresdner’s defence had no “real chance of success”, pointing out there was no suggestion of mismanagement or breach of contract by the four men.
In the earlier case, Mr Justice Jack had also concluded: “That there may be public concern at the size of bankers’ bonuses and how they compare with the remuneration that others may receive is not a reason to have a trial where there is no defence.”
Lawyers have suggested that cases involving discretionary bonus payments – as opposed to guaranteed bonuses – may be far more difficult to enforce in court.
Dresdner and Commerzbank now face another case in which 72 City bankers are suing for €33m of unpaid bonuses, but these relate to discretionary payments.
The dispute centres on Dresdner’s €400m bonus pool put in place by then owner Allianz in mid-2008, ahead of its takeover, in a bid to avoid a staff exodus from the investment bank.
Get alerts on Banks when a new story is published