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Northern Ireland
Bank of Ireland & Anor v Jaffery & Anor [2012] EWHC 1377
Decision Number: Legal Body: ewhc
Published on: 25/05/2012
Issues Covered:
Article Authors The main content of this article was provided by the following authors.
Background This is a long (415 paragraphs) and complex case that will interest senior executives and their legal counsel. It involved a senior executive at the Bank of Ireland who owed both contractual and fiduciary duties to the bank. He failed to disclose certain interests and was summarily dismissed. His partner in crime was an agent of the bank who was joined in proceedings to answer claims of dishonestly assisting Mr Jaffery in breaches of fiduciary duty and bribery. 102The court found several, although not all, of the allegations against the defendants were proved. The case lists the clauses within the contract of employment and code of conduct used to limit Mr Jaffrey's conduct and spell out his responsibilities, sets out a series of questions and answers on matters surrounding fiduciary duties of executives and discusses the fairness of requiring a wrong-doer to repay bonuses.On this last point, the bank asked for Mr Jaffrey to pay back bonuses because, had the wrong-doing been discovered earlier (Mr Jaffrey's fiduciary duties required him to declare wrong-doing in any case), he would not have been paid all of the bonuses. However, the Court did not accept that view. It concluded that there was one area of wrong-doing but, other than that, Mr Jaffrey had been hard working. To require repayment in these circumstances would not be equitable:"Mr Kitchener [claimants' QC] argued that the equitable solution would be to require Mr Jaffery to forfeit his bonuses, since they would not have been paid had his breaches been uncovered. That was the clear benefit that Mr Kitchener said he obtained from his failure to disclose his wrongdoing. Whilst it might be true, as I have said, that, had he given a true certificate of compliance (or rather non-compliance) with Code of Conduct in 2010, he would have been dismissed and lost a large part of his bonuses, that does not mean that it is equitable for him now to have to repay them. The bonuses were paid for the good job he was doing to improve and promote the Bank's business generally. The Bank can be fully and properly compensated by requiring Mr Jaffery to disgorge his profits or paying equitable compensation. "It would be unfair in my judgment, even taking into account the nature of Mr Jaffery's breaches, to require him to repay his salary and bonuses, or indeed any part of them. The breaches must, as I have already said, be looked at in the context of his employment as a whole. Mr Jaffery worked long hours over several years for the Bank. It would be both disproportionate and inequitable in the circumstances of this case to require Mr Jaffery to repay some 5 years of salaries and bonuses in addition to disgorging his profits or paying equitable compensation."http://bit.ly/LsiHoS

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 25/05/2012
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