Commerzbank has won its battle to overturn a legal ruling allowing former proprietary trader James Keen to take the bank to a full trial over claims he was underpaid bonuses worth millions of euros.
The UK Court of Appeal last week upheld an appeal by the German bank against the original decision in April and threw out the majority of Keen's claim, which focused on his bonuses for the past three years.
The court also rejected Keen's appeal against its judgment, although the former trader can still petition to take his case directly to the House of Lords. The court allowed Keen to pursue a separate, smaller claim relating to the withholding of shares awarded as part of his bonuses.
Keen, who managed Commerzbank's special situations proprietary trading desk in London, filed claims for more than 7m (€10.3m) in bonuses more than a year ago, after leaving Commerzbank in June last year. His claims were for bonuses allegedly due for 2003, 2004 and last year.
Commerzbank welcomed the appeal verdict in a statement today, saying: "Commerzbank has always maintained that the decisions with regards to the bonus awards relating to Mr Keen adhered to the terms of his contract of employment. Today's ruling confirms that the exercise of the bank's discretion with regards to the bonus awards he received was both reasonable and appropriate."
Linklaters, the law firm that acted for Commerzbank, said the case will have a "significant impact on the way that banks and City institutions award bonuses to their employees. Given the high level of bonuses anticipated in the coming year this will be of particular interest to financial institutions".
Nicola Rabson, managing associate at the law firm, said the decision will "undoubtedly give financial institutions some breathing space, especially those fearful of challenges over the next bonus round".
The UK High Court originally rejected Commerzbank's request for an expedited ruling in its favour in April, instead ruling that Keen could take his case to a full trial.
Legal representatives for Keen could not be reached for comment this morning.