Sunday 19 November 2017

The financial crisis has surely removed any obligation to pay bonuses

AN Act of God is a clause typically found in insurance contracts, where payouts are deemed commercially impracticable owing to some wholly unforeseen or unnatural phenomena.

When he announced new laws to curb a payout of some €40m in backdated bonuses to AIB executives, Finance Minister Brian Lenihan did not use the phrase 'Act of God' to describe the shocking deterioration in the finances of one of the State's systemically important banks.

But he argued against the apparent breach of the bank's contractual duties towards staff who worked in the Capital Markets' division -- the only profitable arm of the bank in 2008 -- and the Senior Counsel claimed the bonuses could not be paid out due to a supervening event.

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