City banker ordered to pay back bonus

Nov 21 2003 by Nic Paton Print This Article

Christmas in Gareth Price-Jones' house is likely to be a low-key affair this year after three judges ordered the City banker to pay back a £250,000 bonus with interest because it had been paid by mistake.

City institution Commerzbank took Price-Jones to the Court of Appeal after a deputy High Court judge ruled in December last year that he was entitled to bonuses worth £515,000 in total for a year's work.

Price-Jones began working for the investment bank back in April 2000, when he was 30, and was made redundant in November 2001.

During that time he had been offered a remuneration package of £1 million, including a guaranteed bonus of £250,000 a year.

In June 2000 he received a letter from his employers confirming his bonus as £265,000, which was paid in March 2001. However, the bank also paid the originally-agreed bonus in December 2000.

At the first hearing, David Phillips QC had been told Price-Jones had been entitled to believe that the £265,000 was a "lock-in payment" to persuade him not to leave the bank.

Despite agreeing that the bank had paid the initial £250,000 by mistake and had only intended to pay him an extra £15,000 bonus, Judge Phillips ruled that contracts signed by Price-Jones meant he was entitled to both sums.

But Lord Justice Mummery, giving the ruling of the Court of Appeal, said that, if the bank had intended to increase the guaranteed bonus to £515,000, this would have been made plain in letters to Price-Jones.

The judges ruled Price-Jones had been "unjustly enriched" and ordered him to pay back £250,000 plus £10,000 interest.

"The payment was a mistake. He has still got the money. There is no obstacle to repaying it," said Lord Justice Mummery.