Case T-342/99 DEP

Airtours plc

v

Commission of the European Communities

(Taxation of costs – Solicitors’ and barristers’ fees – Economists’ fees – VAT)

Order of the Court of First Instance (Fifth Chamber, Extended Composition), 28 June 2004

Summary of the Order

1. Procedure – Costs – Taxation – Recoverable costs – Definition

(Rules of Procedure of the Court of First Instance, Art. 91(b))

2. Procedure – Costs – Taxation – Matters to be taken into account

(Rules of Procedure of the Court of First Instance, Art. 91(b))

3. Procedure – Costs – Taxation – Recoverable costs – Definition – Involvement of more than one lawyer

(Rules of Procedure of the Court of First Instance, Art. 91(b))

4. Procedure – Costs – Taxation – Recoverable costs – Definition – Expenses necessarily incurred by the parties – Involvement of more than one lawyer – Aggregation of barrister’s and solicitor’s fees – Whether permissible – Limits

(Rules of Procedure of the Court of First Instance, Art. 91(b))

5. Procedure – Costs – Taxation – Recoverable costs – Definition – Expenses necessarily incurred by the parties – Economist’s fees – Whether permissible in cases essentially involving economic appraisals

(Rules of Procedure of the Court of First Instance, Art. 91(b))

6. Procedure – Costs – Taxation – Recoverable costs – Definition – Value added tax – Exclusion in the case of a taxable person

(Rules of Procedure of the Court of First Instance, Art. 91(b))

1. It follows from Article 91(b) of the Rules of Procedure of the Court of First Instance that recoverable costs are limited, first, to those incurred for the purpose of the proceedings before the Court and, second, to those which were necessary for that purpose.

By virtue of those principles, the amount of recoverable costs cannot exceed the amount of expenses necessarily incurred by an applicant for the purpose of the proceedings before the Court. An applicant is not therefore entitled to rely on what was said in a judgment of the Court of First Instance, on views expressed by the Commission or by a national court following that judgment or, more generally, on the need for effective judicial review in order to obtain more than that to which it is entitled under Article 91(b) of the Rules of Procedure.

Furthermore, the rules which apply to the fixing of the amount of recoverable costs are laid down in the Rules of Procedure and cannot be inferred, by analogy, from the national procedural rules to which the applicant refers.

(see paras 13-15)

2. The Community Courts are not empowered to tax the fees payable by the parties to their own lawyers, but may determine the amount of those fees to be recovered from the party ordered to pay the costs. When ruling on an application for taxation of costs, the Court of First Instance is not obliged to take account of any national scale of lawyers’ fees or any agreement in that regard between the party concerned and his agents or advisers.

In the absence of Community provisions laying down fee-scales, the Court must make an unfettered assessment of the facts of the case, taking into account the purpose and nature of the proceedings, their significance from the point of view of Community law as well as the difficulties presented by the case, the amount of work generated by the proceedings for the agents and advisers involved and the financial interests which the parties had in the proceedings.

(see paras 17-18)

3. As regards the extent of the work which proceedings may have obliged an applicant’s advisers to undertake, the primary consideration of the Court is the total number of hours of work which may appear to be objectively necessary for the purpose of the proceedings before the Court, irrespective of the number of lawyers who may have provided the services in question. In that regard, the ability of the Court to assess the value of work carried out is dependent on the accuracy of the information provided.

(see para. 30)

4. It is for the Court to determine whether, and to what extent, the fees which a party seeks to recover represent expenses necessarily incurred for the purpose of the proceedings as provided for in Article 91(b) of the Rules of Procedure.

As regards cases before the Community Courts, there exists no legal or deontological obstacle to a party being represented solely by either a solicitor or a barrister of England and Wales for the purpose of both the written and the oral procedure. However, it does not follow that where a client decides to be represented by both a solicitor and counsel, the fees due to each of them are not to be regarded as costs necessarily incurred for the purpose of the proceedings, as provided for in Article 91(b) of the Rules of Procedure.

In taxing costs in those circumstances, the Court must examine the extent to which the services supplied by all the advisers concerned were necessary for the conduct of the legal proceedings and satisfy itself that the fact that both categories of lawyers were instructed did not entail any unnecessary duplication of costs. When the applicant’s action seeks annulment of a Commission decision adopted following an administrative procedure during which the applicant was represented by the same team of lawyers, the costs necessarily incurred before the Court consist essentially of costs relating to the preparation and drafting of pleadings and responses to measures of organisation or inquiry ordered by the Court and to attendance at the hearing. It follows that where, for example, a client decides, on the advice of his solicitor, to retain counsel for advice as to whether to bring an action for annulment and counsel is instructed to draft pleadings and briefed to appear at the hearing, the costs which are necessarily incurred by the solicitor are limited to those involved in instructing counsel, acting upon counsel’s advice, engrossing and lodging the pleadings and attending upon counsel at the hearing.

(see paras 41-45)

5. Given the essentially economic nature of the findings made by the Commission in the context of merger control, the involvement of economic advisers or experts specialising in that field may sometimes prove necessary and entail costs which may be recovered under Article 91(b) of the Rules of Procedure of the Court of First Instance.

(see para. 55)

6. Where an applicant is a taxable person, he is entitled to recover from the tax authorities value added tax paid on goods and services purchased by him, and thus does not represent an expense for him. In such an event, he cannot claim reimbursement of value added tax on costs which are recoverable under Article 91(b) of the Rules of Procedure.

(see para. 79)