EU General Court: Amended Rules but no real change to costs assessment…

The New Rules of Procedure of the General Court of the EU came into force on 1 July 2015. These replace the existing rules, which were first introduced in 1991 and which have been amended on a number of occasions as a result of the increasing variety of cases that have come before the General Court.

Unlike in English proceedings, (unless the matter is listed to the fast track or is for a hearing of one day or less) a decision as to costs in the General Court “shall be given in the judgment or order which closes the proceedings”, pursuant to Article 133. The Order will, therefore, fix the sum of the costs to be recovered. In order to recover the costs of the assessment of costs, it will be necessary to include provision for the same in the Bill of costs so that an all-inclusive determination of the overall costs can be made. In addition, as the right to recover costs has its legal basis in the order fixing the amount recoverable, interest thereon is payable only from the date of that order (para 86 of Mulder and Others v Council and Commission [2004] ECR 1-1).

The English rule of “loser pays” typically applies, however, provision for the same will need to have been made in the successful party’s pleadings. In the event that a case does not proceed to judgment, the costs shall be in the discretion of the General Court (Article 137).

In accordance with Article 170(3) of the rules of procedure, if there is a dispute concerning the costs to be recovered, the Court is, on application by the party concerned and after hearing the opposition, to make an order, from which no appeal may lie.

Under Article 140(b) “expenses necessarily incurred by the parties for the purpose of the proceedings, in particular, the travel and subsistence expenses and the remuneration of agents, advisers or lawyers” are regarded as recoverable costs. It follows from that provision that recoverable costs are limited, first, to those incurred for the purpose of the proceedings before the Court and, secondly, to those which were necessary for that purpose (Airtours v Commission [2004] ECR II-1785, para 13).

Greater guidance in respect of the same can be found in the case of Mulder. This case appears to be the leading decision in the determination of costs.

Under Article 74 of the old procedure rules, it was highlighted that the EU judicature cannot tax solicitor-client costs (the relevant provision does not appear to have been transferred into the new rules). However, it can determine the amount of those fees which may be recovered from the paying party. The General Court is not obliged to take into consideration a national scale of lawyers’ fees (for example – in England – the starting point is consideration of the guideline hourly rates) or any agreement in that regard between the client and his solicitor. The General Court must, instead, make a decision based on the facts of the case, taking into consideration the purpose and nature of the proceedings, among other things.

It is common place for delegation to take place within the legal arena. However, it is to be noted that the remuneration of only one lawyer/legal advisor is recoverable and is the starting point in the General Court. It is possible, however, depending on the individual circumstances of the case, for a number of lawyers’ fees to be considered “necessary expenses” as per article 140(b).

In light of the above, it is apparent that the discretion held by the General Court in awarding costs is expansive indeed. A strict definition has been applied to “necessarily incurred” and indeed a great deal of costs are irrecoverable from the outset regardless of whether one deems these as necessary as they will not have been for the “purpose of proceedings”, for example, fees in respect of negotiations that lead to an extra-judicial settlement.

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