ORDER OF THE GENERAL COURT (Fourth Chamber, Extended Composition)
24 January 2014 (*)
(Procedure – Taxation of costs)
In Case T‑210/02 RENV-DEP,
British Aggregates Association, established in Lanark (United Kingdom), represented by L. Van Den Hende, lawyer,
applicant,
v
European Commission, represented by M. Afonso and J. Flett, acting as Agents,
defendant,
supported by
United Kingdom of Great Britain and Northern Ireland,
intervener,
APPLICATION for taxation of costs following the judgment of the General Court in Case T‑210/02 RENV British Aggregates v Commission [2012] ECR,
THE GENERAL COURT (Fourth Chamber, Extended Composition),
composed of M. Prek, President, I. Labucka, J. Schwarcz, V. Tomljenović and V. Kreuschitz (Rapporteur), Judges,
Registrar: E. Coulon,
makes the following
Order
Facts, procedure and forms of order sought by the parties
1 The applicant, British Aggregates Association, is an association, the members of which comprise small independent quarrying companies in the United Kingdom. It has 55 members, which operate over 100 quarry sites.
2 By Decision C(2002) 1478 final of 24 April 2002 on State aid file N 863/01 – United Kingdom v Aggregates Levy (‘the contested decision’), the Commission of the European Communities (now the European Commission) decided not to raise objections against certain legislative provisions imposing a levy on aggregates (‘the AGL’ or ‘the levy’) in the United Kingdom, on the ground, inter alia, that the levy did not constitute State aid within the meaning of Article 87(1) EC, in so far as its scope was justified by the logic and nature of the system of taxation at issue, and that the exemption granted to Northern Ireland was compatible with the common market.
3 By application lodged at the Registry of the General Court on 12 July 2002, the applicant brought an action for the annulment in part of the contested decision.
4 By order of the President of the Second Chamber of the General Court of 28 November 2002, the United Kingdom of Great Britain and Northern Ireland was granted leave to intervene in the case in support of the form of order sought by the Commission.
5 In support of its action, the applicant alleged, first, an infringement of Article 87(1) EC; second, a failure to state reasons in accordance with Article 253 EC; third, an infringement by the Commission of its duty to initiate the formal investigation procedure in accordance with Article 88(2) EC; and, fourth, a failure by the Commission to carry out its obligations in relation to the preliminary stage of the procedure in accordance with Article 88(3) EC.
6 The Commission challenged the admissibility of the action, contending that the contested decision was not of individual concern to the applicant within the meaning of the fourth paragraph of Article 230 EC.
7 By judgment of 13 September 2006 in Case T‑210/02 British Aggregates v Commission [2006] ECR II‑2789 (‘the first judgment of the General Court’), the General Court declared the action admissible, but rejected the first and second pleas, which it examined together, as well as the third and fourth pleas. Accordingly, the General Court dismissed the action in its entirety.
8 By a document lodged on 27 November 2006, the applicant brought an appeal before the Court of Justice seeking to have the first judgment of the General Court set aside and the contested decision annulled, save as regards the exemption for Northern Ireland. The Commission brought a cross-appeal requesting the Court of Justice to set aside that judgment and to declare the action inadmissible. The United Kingdom claimed that the main appeal should be dismissed.
9 By judgment of 22 December 2008 in Case C‑487/06 P British Aggregates v Commission [2008] ECR I‑10505 (‘the judgment on appeal’) the Court of Justice set aside the first judgment of the General Court and referred the case back to that Court.
10 The Court of Justice confirmed in its entirety the General Court’s assessment of the admissibility of the action (judgment on appeal, paragraphs 24 to 58).
11 As regards the substance, the Court of Justice found, inter alia, that the General Court had committed two main errors of law.
12 First, in the Court of Justice’s view, in its first judgment the General Court misconstrued the notion of aid, in particular the criterion of the selectivity of the advantage, which does not distinguish between the causes or the objectives of State aid measures, but defines them in relation to their effects. Therefore, the General Court was not entitled to take into account the environmental objective pursued in order to justify the exclusion from the scope of Article 87(1) EC of measures involving a selective advantage (judgment on appeal, paragraphs 82 to 92). Second, the Court of Justice considered that the General Court erred with regard to the standard of judicial review to be exercised in regard to the notion of aid – which is a legal concept that must be interpreted on the basis of objective factors – by holding that the Commission had a broad discretion in the application of Article 88(3) EC. That is why the Courts of the European Union must, in principle, carry out a comprehensive review as to whether a measure falls within the scope of Article 87(1) EC. According to the Court of Justice, that error of law vitiated in its entirety the General Court’s analysis of the substance of the contested decision (judgment on appeal, paragraphs 109 to 115).
13 The Court of Justice ultimately decided to set aside the first judgment of the General Court, to refer the case back to it on account of the two errors of law referred to in paragraph 12 above, and to reserve the costs (judgment on appeal, paragraphs 195, 197 and 198).
14 Once the case had been referred back to the General Court, the parties were invited to submit their observations on the conclusions to be drawn from the judgment on appeal for the outcome of the dispute. The applicant, the Commission and the United Kingdom lodged their observations in accordance with Article 119(1) of the Rules of Procedure of the General Court.
15 Following the opening of the oral procedure, the arguments of the parties were heard, as were their replies to the oral questions put by the General Court at the hearing on 16 May 2011.
16 At the hearing, the General Court invited the Commission and the United Kingdom, in the context of a measure of organisation of procedure pursuant to Article 64 of the Rules of Procedure, to provide it, within a time-limit of three weeks, all documents or references to documents already in the administrative file attesting to certain factual aspects of the administrative procedure launched following notification of the AGL in respect of the extraction of ‘virgin’ aggregates for commercial use. The General Court thus kept the oral procedure open, which was recorded in the minutes of the hearing.
17 By separate document lodged at the Registry of the General Court on 30 May 2011, the applicant requested the General Court to order the Commission and the United Kingdom, by way of measures of organisation of procedure pursuant to Article 64 of the Rules of Procedure, to submit further information regarding certain facts that were disputed at the hearing. The Commission and the United Kingdom submitted their observations on that request on 13 and 14 July 2011.
18 By separate documents lodged at the Registry of the General Court on 14 June 2011, the Commission and the United Kingdom complied with the General Court’s request for production of documents. The applicant submitted its observations on those documents on 18 July 2011 and the oral procedure was closed.
19 By judgment of 7 March 2012 in Case T‑210/02 RENV British Aggregates v Commission [2012] ECR (‘the second judgment of the General Court’), the General Court upheld the applicant’s first plea and, consequently, the action in its entirety, without ruling on the second, third and fourth pleas. It thus annulled the contested decision, save as regards the exemption for Northern Ireland, for an infringement of Article 87(1) EC. Moreover, the General Court ordered the Commission to bear its own costs and those incurred by the applicant before the Court of Justice and the General Court, and the United Kingdom to bear its own costs which it incurred before those Courts.
20 By letter of 25 September 2012, the applicant’s legal representative sought reimbursement from the Commission of a total of 293 335.99 pounds sterling (GBP) by way of costs, corresponding to 1 195.64 working hours in the context of the three sets of court proceedings concerned over a period of nine years.
21 By letter of 22 October 2012, the Commission requested that it be provided with more precise information concerning the costs relating to each of the three court proceedings.
22 By letter of 12 December 2012, the applicant’s legal representative sent the Commission more detailed information concerning the costs incurred in each of the three court proceedings. That information included, inter alia, a summary of the fees and disbursements of its advisers; a list of persons who had worked on the case, setting out their qualities and qualifications; time sheets of its advisers setting out, inter alia, their tasks, hourly rate and time devoted to completing those tasks; invoices from law firm H. sent to the applicant, and a reasoned statement of the costs and disbursements, accompanied by supporting documents. In that same letter, the applicant’s legal representative stated that the total costs amounted to GBP 293 709.36 and that disbursements amounted to GBP 11 666.93, including GBP 8 000 in fees invoiced by Professor J., making a grand total of GBP 305 376.29.
23 By letter of 4 February 2013, the Commission contested the amount claimed for being excessive and for failing to correspond to what was objectively necessary. It stated, in essence, that, in order to determine the amount of costs necessarily incurred for the purposes of the three sets of court proceedings, it did not intend to rely on the invoices produced by the applicant’s legal representative, but to make its own estimates in the light of the information available in the file and the procedural steps undertaken by the applicant’s advisers. The Commission annexed a table setting out those steps in relation to each of the three sets of court proceedings, assigning to each a number of hours which it considered that a reasonably experienced adviser should have devoted to it, and multiplied the total of 427 hours – the figure which it arrived at – by an hourly rate of EUR 300. The Commission thus considered that a total of EUR 128 696.92 would have been sufficient to defend the applicant’s interests in the three sets of court proceedings.
24 By letter of 22 February 2013, the applicant’s legal representative, acting on behalf of its client, rejected as ‘unacceptable’ the Commission’s offer to pay an amount of EUR 128 696.92. The applicant’s legal representative annexed a draft application for taxation of costs reiterating its request for reimbursement of a total of GBP 305 376.29 by way of recoverable costs and setting out the grounds raised in support of that request. Finally, the legal representative stated that the Commission had until 29 March 2013 to respond favourably to the applicant’s request, otherwise it would bring an action before the General Court.
25 By letter of 19 March 2013, the Commission invited the applicant inter alia to provide additional information and an estimate of its necessary costs, based on the methodology set out in its letter of 4 February 2013.
26 By document lodged at the Registry of the General Court on 11 April 2013, the applicant submitted the present application for taxation of costs pursuant to Article 92(1) of the Rules of Procedure.
27 By document lodged at the Registry of the General Court on 31 May 2013, the Commission submitted its observations on that application.
28 The applicant claims that the General Court should fix the net amount of recoverable costs at GBP 305 376.29.
29 The Commission contends that the General Court should fix the amount of recoverable costs at EUR 128 696.92.
30 After a change in the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which the present case was, consequently, assigned.
Law
31 According to Article 92(1) of the Rules of Procedure:
‘If there is a dispute concerning the costs to be recovered, the General Court hearing the case shall, on application by the party concerned and after hearing the opposite party, make an order, from which no appeal shall lie.’
32 Under Article 91(b) of the Rules of Procedure, recoverable costs include, inter alia, ‘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’. It follows from that provision that recoverable costs are limited to those incurred for the purposes of the proceedings before the General Court, including, if applicable, where the case has been referred back to the General Court following the setting aside of a judgment on appeal, and before the Court of Justice, which were necessary for that purpose.
33 It has consistently been held, first, that, in the absence of European Union provisions laying down fee scales, the General Court must freely assess the facts of the case, taking into account the purpose and nature of the proceedings, their significance from the point of view of European Union law, as well as the difficulties presented by the case, the amount of work generated by the dispute for the agents and advisers involved and the financial interest which the parties have in the proceedings. In that respect, the ability of the Courts of the European Union to assess the value of work carried out is dependent on the accuracy of the information provided. Second, the Courts of the European Union are not empowered to tax the fees payable by the parties to their own lawyers, but to determine the amount of those fees which may be recovered from the party ordered to pay the costs. When ruling on an application for taxation of costs, the General Court 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 (see orders in Case T‑80/97 DEP Starway v Council [2002] ECR II‑1, paragraphs 26 and 27, and Case T‑243/01 DEP Sony Computer Entertainment Europe v Commission [2005] ECR II‑1107, paragraphs 22 and 23 and the caselaw cited).
34 Moreover, it must be borne in mind that the primary consideration of the Courts of the European Union is the total number of hours of work which may appear to be objectively necessary for the purpose of the proceedings before the General Court, irrespective of the number of lawyers who may have provided the services in question (order in Case T‑342/99 DEP Airtours v Commission [2004] ECR II‑1785, paragraph 30; see also, to that effect, order in Case T‑290/94 DEP Kaysersberg v Commission [1998] ECR II‑4105, paragraph 20; and Case T‑337/94 DEP Enso‑Gutzeit v Commission [2000] ECR II‑479, paragraph 20).
35 It is according to those criteria that the amount of recoverable costs is to be assessed in this case.
36 The applicant submits that the number of hours devoted by its advisers to the defence of its interests is completely justified in the light of the purpose and nature of the court proceedings at issue and their significance from the point of view of European Union law, its financial interest in the outcome of the case, the difficulties presented by the case, and the volume of the work generated, in particular, by the Commission’s vigorous defence of the contested decision during the three sets of court proceedings.
37 The Commission disputes the applicant’s arguments.
The purpose and nature of the proceedings and their significance from the point of view of European Union law
38 As the applicant rightly points out, the dispute at hand has given rise to a number of highly complex factual, economic and legal issues, and led, over the course of the three sets of court proceedings which have lasted for almost nine years, to two judgments of the General Court which are diametrically opposed and a judgment of the Court of Justice recognising the existence of a number of errors of law on the part of the General Court which render its first judgment unlawful. Those errors of law related to questions of principle, namely the methodology and the scope of the judicial review in matters of State aid and the interpretation of the notion of aid within the meaning of Article 87(1) EC, in particular in relation to the ‘selective advantage’ criterion, where that notion must be applied to a tax system bearing particularly complex characteristics from a factual and legal point of view. As is evident from the various measures of organisation of procedure which were adopted during the two sets of proceedings before the General Court, the contradictory debates between the parties at the hearings and the General Court’s assessment set out in paragraphs 51 to 100 of its second judgment, the factual and legal contexts of the dispute required an in‑depth analysis, on the part of the parties and the Courts of the European Union, of the wording and structure of the AGL and the principles and derogations governing its operation with respect to the selectivity criterion and its various sub‑criteria. Similarly, the parties to the dispute were repeatedly called on to provide highly specific explanations of the factual and legal context of the AGL, which required an in‑depth analysis of the relevant questions of national law and European Union law and of the products and markets concerned.
39 Consequently, the applicant is right to submit that the dispute was highly complex, important from the point of view of European Union State aid law and that it contributed to the clarification and coherency of the application of the State aid rules, which has effects and consequences far beyond the case at hand.
The financial interests in the dispute of the parties
40 In so far as concerns the final interests in the dispute of the parties, suffice it to note that the applicant’s argument is credible that the dispute was of high financial interest to some of its members, which are quarry operators disadvantaged by the AGL, which were likely to lose some of their market share and struggle to compete in a profitable manner with operators marketing substitutable products which are exempted by the AGL (second judgment of the General Court, paragraphs 71 to 81). Those loses and competitive disadvantages, which resulted directly from the exemptions provided for under the AGL and its very structure, and the resulting financial interests cannot be called into question by the alleged fact, noted by the Commission, that the levy remains applicable to the United Kingdom.
The difficulties presented by the case and the volume of work required by it
41 It is apparent from the considerations set out in paragraph 38 above that the present case gave rise to significant difficulties from a factual and legal point of view, which required the applicant’s advisers to work intensively and assiduously in researching, analysing and preparing the written pleadings and oral submissions.
42 Thus, given that sufficiently clear definitions are not provided in the AGL as such, the parties and the Courts of the European Union were required to provide in‑depth statements, first, on the modus operandi of the ‘normal’ taxation on which the AGL was said to be based (second judgment of the General Court, paragraphs 51 to 60), second, on the alleged environmental objectives pursued by the levy (judgment on appeal, paragraphs 128 to 131; first judgment of the General Court, paragraphs 114 to 139; and second judgment of the General Court, paragraphs 62 to 66), third, on the comparability of the situations governed by the AGL in the light of those objectives (second judgment of the General Court, paragraphs 64 to 74), fourth, on possible differential tax treatment in comparable situations and, fifth, on the possible justifications for such differences in taxation based on the nature or general scheme of the AGL (second judgment of the General Court, paragraphs 83 to 92), which required an investigation and assessment of complex factual, economic and legal information. Moreover, in that regard, it was also necessary for the applicant to examine and dispute, in a meticulous and detailed manner, the relevance of certain categorisations supported by the Commission and the United Kingdom, which ultimately proved to be unjustified in the light of the wording, structure and general scheme of the AGL, such as the alleged distinction between ‘primary aggregates’, ‘secondary aggregates’, ‘virgin aggregates’ and ‘recycled aggregates’ (judgment on appeal, paragraphs 140 to 144 and 158 to 161, and second judgment of the General Court, paragraphs 56 to 59).
43 Similarly, following a challenge made by the Commission on that point, the applicant was required, in practice, to invest significant resources to show the existence of a tax differentiation between, inter alia, clay, slate, china clay, ball clay and shale aggregates, on the one hand, and aggregates exploited by its members, on the other, in the light of the environmental objectives – which are not set out in the law as such – which were pursued by the AGL (first judgment of the General Court, paragraphs 128 to 139, and second judgment of the General Court, paragraph 71 to 81), the relevance of which is still called into question by the Commission in its observations on the application for taxation of costs.
44 Moreover, from a legal perspective, following the first judgment of the General Court, the applicant was required to contest the validity of the scope of the judicial review carried out and the classification made of the facts deemed to be relevant by the General Court, in the light of the notion of State aid within the meaning of Article 87(1) EC.
45 The applicant is also correct to submit that the difficulties inherent in the present case were made more acute, inter alia, by the Commission’s conduct, which, even following the judgment on appeal, continued to defend the contested decision in all respects and, in particular, its contention – initially accepted, in essence (first judgment of the General Court, paragraphs 114 to 117, 128 and 130), but then explicitly rejected by the General Court (paragraph 52 of its second judgment) – that the AGL, as ‘an exceptional fiscal burden on a narrowly defined economic sector’ escaped ipso facto the scope of Article 87(1) EC.
46 Consequently, it must be acknowledged that the difficulties inherent in the case required a large amount of particularly assiduous work on the part of the applicant’s advisers, which exceeded the amount of work generally required in a State aid case.
Whether the total number of hours worked was objectively necessary and the appropriate hourly rate
47 It should be noted, at the outset, that, at the latest in its letter of 12 December 2012, the applicant provided very precise information regarding the calculation of the costs for each of the three court proceedings, which it regarded as recoverable from the Commission (see paragraph 22 above). Moreover, the parties unanimously agreed that an hourly rate of EUR 300 for an experienced lawyer could be regarded as objectively necessary for the purposes of the contentious proceedings, since that amount appeared to be in line with what the General Court has deemed appropriate for the taxation of costs in other economically complex cases, such as State aid cases (see, to that effect, order of 8 October 2008 in Case T‑324/00 DEP CDA Datenträger Albrechts v Commission, not published in the ECR, paragraph 100). At the time the present application for taxation of costs was brought, that hourly rate corresponded approximately to GBP 256.
48 The applicant included three tables in the information it provided, setting out in detail the number of hours worked by its legal advisers in the three sets of legal proceedings, the objective necessity of which must be assessed in the light of the particular characteristics of the present case, as described in paragraphs 38 to 46 above.
49 In relation to the first set of proceedings before the General Court, the applicant claims that a total of 612.79 hours of work should be taken into account, of which 56.33 were carried out by co‑workers who were either trainee solicitors or paralegals, namely persons who had not fully completed their legal training. Moreover, a certain number of hours of work are claimed to have been devoted to drafting press releases, a French translation of the application, and drafting a letter to the Commission. However, as the Commission submits, those hours cannot be classed as necessary for carrying out the contentious procedure and, consequently, cannot be taken into consideration for the purposes of the taxation of recoverable costs. In addition, in so far as, first, it is not possible to consider as necessary all of the hours worked by the co‑workers who were either trainee solicitors or paralegals, whose work cannot be compared to that of an experienced and efficient lawyer, and, second, all of the work was carried out by a number of lawyers with varying levels of experience and whose hourly rates varied substantially, the General Court will make an equitable assessment of the number of hours worked which were objectively necessary by fixing the amount at 400 hours.
50 The applicant further submits that, in the context of the proceedings before the Court of Justice, its legal advisers worked a total of 263.83 hours, 91.33 of which were carried out by co‑workers who were either trainee solicitors or paralegals. In the light of the grounds set out in paragraph 49 above, the General Court will make an equitable assessment of the number of hours worked which were objectively necessary for the purposes of the appeal proceedings by fixing the amount at 150 hours.
51 Moreover, in so far as concerns the second set of proceedings before the General Court, the applicant submits that a total of 319 hours of work were carried out, 51.58 hours of which were carried out by co‑workers who were either trainee solicitors or paralegals. In that respect, regard being had to the foregoing considerations, it is appropriate to estimate the number of hours worked which were objectively necessary at 250.
52 It results from all of the foregoing considerations that the applicant may claim the reimbursement of 800 hours of work at an hourly rate of GBP 256, corresponding to a total of GBP 204 800 by way of remuneration for its legal advisers.
The recoverable disbursements
53 By way of recoverable costs, the applicant seeks the reimbursement of GBP 6 000 for services rendered by Professor J., the objective necessity of which has not been contested specifically by the Commission, and disbursements, including travel and subsistence expenses in relation to Luxembourg and the postages fees incurred in sending procedural documents to the General Court and Court of Justice in the amount of GBP 2 195.94 for the first set of proceedings before the General Court, GBP 556.65 for the appeal proceedings, and GBP 8 914.34 for the second set of proceedings before the General Court, including the fees paid to Professor J.
54 In so far as concerns the disbursements incurred in the first set of proceedings before the General Court, it is appropriate to deduct the unnecessary costs incurred in translating the application, which amount to GBP 914.22, and printing and photocopying costs, amounting to GBP 941.83, in relation to which the applicant has neither stated the precise volume of the documents produced nor submitted any supporting documents. Thus, it is appropriate to fix the amount of disbursements which may be recovered for those proceedings at GBP 339.89.
55 As regards the disbursements relating to the appeal proceedings, for the same reasons as those set out in paragraph 54 above, it is necessary to deduct printing and photocopying costs, amounting to GBP 507, with the result that the amount of disbursements which may be recovered must be fixed at GBP 49.65
56 Finally, in so far as concerns disbursements connected with the second set of proceedings before the General Court, it must be acknowledged, in accordance with paragraph 43 of the application for taxation of costs submitted by the applicant and in the light of the absence of any challenge in that respect on the part of the Commission, that the sum of GBP 6 000 invoiced for the services rendered by Professor J. must be regarded as objectively necessary, while the additional sum of GBP 2 000 in fees paid to the latter, which is mentioned only in a table annexed to that application, cannot be regarded as being of such a nature. Moreover, it is necessary to deduct the sum of GBP 8.82 requested by the applicant corresponding to a taxi fare of one of its legal advisers who had to work until late, since the receipt produced is illegible, along with the printing and photocopying costs amounting to GBP 214.53, in respect of which the applicant has not specified the volume nor submitted any supporting documents. Consequently, the total recoverable amount is GBP 6 690.99.
57 Thus, the recoverable amount of disbursements must be fixed at GBP 7 080.53.
58 In view of all the foregoing considerations, the General Court will make an equitable assessment of the costs recoverable by the applicant in the present case by fixing the amount at GBP 211 880.53.
On those grounds,
THE GENERAL COURT (Fourth Chamber, Extended Composition)
hereby orders:
The total amount of costs to be reimbursed by the European Commission to British Aggregates Association is fixed at 211 880.53 pounds sterling (GBP).
Luxembourg, 24 January 2014.