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High Court strikes out LIBOR banker’s £5m bonus claim against Deutsche Bank

High Court strikes out LIBOR banker’s £5m bonus claim against Deutsche Bank

Deutsche Bank has won a strike out application against a former employee who brought a claim alleging his bonuses were too low.

The employee, Yves Paturel, claimed that his £1.2m and £2.96m bonuses in 2008 and 2009 were insufficient, and should have mirrored the higher awards given to his more senior colleagues.  Paturel was fired as part of a regulatory settlement Deutsche Bank reached in connection with its role in manipulating the London Interbank Offered Rate (“LIBOR”).  He received the highest bonuses of anyone at his level on his desk, but argued that his awards were two low and constituted a breach of contract by Deutsche Bank. He highlighted the more favourable formula applied to calculate his bosses’ bonuses.

The High Court rejected Mr Paturel’s arguments that his claim should go to a full hearing, and struck out the claim earlier this month.  Judge Rabinder Singh said that “There were clearly sound reasons for…[the bank’s] decision to award different bonuses” to Paturel compared to his more senior colleagues.

The claim will put HR professionals and employment lawyers in mind of Keen v Commerzbank (in which Paul Quain and Jon Gilligan, founding partners of GQ Employment Law, acted), where Mr Keen unsuccessfully sought to challenge his bonus awards despite them being amongst the very highest in the global bank.  The Court of Appeal judgement in Keen affirmed that, in order to establish a breach of contract in a discretionary bonus claim, an employee must show that their employer has acted irrationally or perversely.  The Paturel claim is a further reminder of what a high hurdle this is for employees to climb in order to succeed in such claims.  Presumably Mr Paturel will be left with a lasting reminder of this lesson when he meets the costs of the two QCs (plus solicitors’ fees) following the dismissal of his application.  The rest of us can await the judgment for a less painful demonstration.