Credit Suisse Can See Other Banks' Bonus Tax Data in Lawsuit
(Bloomberg) -- Credit Suisse Group AG won a court bid to see how much money its rivals paid under a one-time U.K. banker bonus tax that was levied amid public anger in the wake of the financial crisis.
The Swiss lender can see a document held by the British tax authority HM Revenue & Customs that sets out how much individual banks paid under a 50 percent tax implemented by Britain’s Labour government after the 2008 crash, judge Matthew Marsh said in a court order dated Jan. 24 and released this week.
It comes ahead of a trial scheduled to start this summer that looks set to bring bankers’ pay back into the spotlight, a decade after the crisis. The lawsuit has already started to draw in the wider industry, as three banks raised objections to some details from the HMRC document being shared.
Disclosing the document -- which sets out how much each bank paid, but doesn’t identify any employees -- could potentially lead to those details becoming public. Banks’ names will be redacted if they or their employees were exempt from the tax, Marsh said in the court order.
Credit Suisse and HMRC declined to comment.
Credit Suisse, which is suing HMRC, argues the levy on bonuses over 25,000 pounds ($32,900) was unfairly limited to payments between Dec. 9, 2009, and April 5, 2010. The bank suspects it ended up paying more than others that distributed bonuses outside the narrow time frame.
It needs to know how much competitors paid in order to make a case at trial, its lawyer Aidan Robertson said at a pre-trial hearing in November.
A mystery bank had objected to the document being disclosed, saying at the November hearing that it didn’t want anyone to know it paid the tax because it didn’t want anyone to know it was paying bonuses -- a stance that the judge, Marsh, described as “astonishing.” Zahra Al-Rikabi, the anonymous bank’s lawyer, didn’t respond to calls and emails seeking comment.
Keep Our Bonus Taxes Secret, Banks Say in Credit Suisse Lawsuit
Mystery Bank Wants to Keep Bonuses Secret in Credit Suisse Trial
In total three banks had raised objections to some details being shared as part of the lawsuit, the London court said this month, though their names and the reasons for their objections haven’t been released.
Credit Suisse paid 440 million Swiss francs ($442 million) for the tax, which came at a time of widespread popular anger in the wake of government bailouts. Several lenders have already disclosed how much they paid under the program. Goldman Sachs Group Inc. paid $465 million and HSBC Holdings Plc paid $282 million.
The tax generated 3.4 billion pounds, almost five times more than initial estimates.
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