Fresh legal tussle over AIB bonuses
AIB's capital markets staff are not content to comply with the government's decision to rescind their deferred 2008 bonuses, and increasing numbers are seeking legal advice to claim the payments.
The Irish Times reported last week that a new group of AIB workers - seeking anything from €3k to €38k - were filing claims with the Circuit Court, while the Sunday Times says 115 High Court cases have so far been brought forward including a breakaway group of at least 16 of the most senior executives.
One lawyer, who declined to be named because he is representing AIB employees, says that the last week has been one of the busiest of his career: "We've been deluged with calls from AIB staff, some acting in groups to preserve anonymity and potentially save costs, to the point where we've had to turn many away."
So, why the sudden rush? Well, aside from the ignominy of being denied a bonus for yet another year, many staff are looking to file a claim ahead of the signing of the Credit Institutions (Stabilisation) Bill, which contains a provision restricting bonuses. This was delayed on Friday.
By starting proceedings before this is passed, this means that - under a legal precedent set by a 1942 case called Buckley-v-Attorney General (sometimes called the Sinn Fein funds case) - where the Oireachtas was barred from stepping in once the case was underway, the bill is less likely to be used in the bank's defence.
"Basically, if your case is pending or you've instigated a proceedings before the bill is passed, it's less likely it could be used in evidence against you," says the lawyer, adding that the bonus issue was likely to be "copper-fastened" once the bill was signed.
Instead, AIB will have to rely on the 'frustration' argument that Brian Lenihan's letter presents it with - namely, the government has prevented it from paying the bonuses, giving the bank a defence it didn't have previously.
Despite press reports that the bonuses will be paid to all capital markets staff, it has emerged that only 1,460 of the some 2,400 were due to receive a payment.
According to our legal source, AIB's case is not as rock solid as many assume.
"The frustration argument they're using is highly debatable as a matter of law," he says. "I think the government is relying quite heavily on the potential public backlash to deter people from coming forward."
Moreover, 90 or so capital markets staff who originally planned legal action with solicitors McDowell Purcell are now seeking "specific performance" of their contracts in a joint suit, suggests the Times.
Bank of Ireland, meanwhile, previously claimed that it hadn't paid any performance related bonuses this year. However, a new tussle with the government looks imminent after the Sunday Business Post reported that the bank had paid a number of senior figures bonuses in recent days including one a €500k payout for an executive in its asset management division.
