The chess match over caps on banker bonuses continued this week, as United Kingdom and European Union lawmakers sought to outmaneuver one another in the remuneration battle.

At issue is the impending rule limiting bankers’ bonuses to 100 percent of fixed pay or twice their fixed pay with shareholder approval. That rule, scheduled to take effect in January, was part of the larger Capital Requirements Directive package approved by EU lawmakers in 2013 to tighten financial regulations and guard against excessive risk taking.  Both U.K. lawmakers and members of the financial sector there were vocal in opposition to the caps, claiming it would hurt the sector’s competitiveness and drain talent.

This week lawyers for both sides began their arguments at the European Court of Justice in Luxembourg. The U.K. is seeking annulment of the regulation, arguing the provisions overstep the authority granted in the EU treaties, are disproportionate and/or fail to comply with the principle of subsidiarity, were passed in a way that infringed on the principle of legal certainty, and inappropriately extend to institutions outside the European economic area, according to court documents on the ECJ website. The U.K. also is taking issue with the role the European Banking Authority (EBA) plays in the new regulations. The EBA is responsible for determining who constitutes a “material risk taker” and thus is subject to the rules, and for coming up with other guidelines. The disclosure requirements contained in the regulation also run counter to EU data protection and privacy laws, the U.K. argued.

Kieron Beal, a lawyer representing the U.K., told the court the rules amount to the EU being allowed to set the pay for an “important financial sector,” according to a report by Bloomberg. “Setting the level of variable remuneration by reference to a percentage figure still sets the level of pay for that worker,” Bloomberg quoted Beal as saying.

The ECJ previously rejected an argument from the U.K.’s lawyers that the case should be heard on an expedited basis because the rule would affect a large number of existing contracts between bankers and their employers.

Lawyers representing the European Commission, European Parliament, and the Council of the European Union defended the regulation in court, and called the U.K.’s argument that it poses an outright limit on remuneration “intellectually dishonest,” according to Bloomberg.

“We are not in the business of banker bashing,” Matthew Moore, one of the lawyers representing the Council, said, according to Bloomberg. “What we are seeking to do is make sure banks in the European Union don’t collapse because of excessive risk taking.”

Bloomberg reported that the court’s advocate general is expected to issue an opinion on the case 20 Nov., with a final ruling expected about six months after that.

Separate from the court case, banks in the U.K. already have begun planning ways to offset the impact of the regulation if it stands. A survey this summer by Robert Half showed roughly 65 percent of the financial services executives polled reported raising salaries in response, with an average pay raise of 20 percent. Numerous media reports have detailed moves by HSBC, Lloyds Banking Group, and others to get around the cap by paying executives fixed “allowances” in cash or shares rather than variable bonuses. The Guardian reported in February that HSBC was starting to give its chief executive Stuart Gulliver a £1.7M “fixed-pay allowance” on top of his £1.2M annual salary.

But a top European Commission official this week signaled the EU is ready to fight back at those attempts to get around the bonus cap. Michel Barnier, the commission vice president in charge of internal markets and services, asked the head of the EBA to accelerate its investigation into the use of allowances. The EBA began looking into the issue at the request of the commission earlier this year, with a report due back by the close of the year. Barnier instead is asking for those results by the end of this month at the latest.

“I would like to underline my strong concerns with regard to the continuing reports of the use of these allowances,” Barnier said in his letter to EBA Chair Andrea Enria this week. “It is important to show a collective proactive stance on this important matter and address the claims made that the spirit – if not the letter – of Union law is being disregarded.”

Barnier said the EBA’s findings will help the commission address the concerns quickly “through a coordinated policy response.” Barnier would need to act quickly if he is to try to tackle the situation before his term as internal markets commissioner expires as expected in October. He promised Enria that the EBA would have his full support and assistance in resolving the issue.