The Winner Takes it All: Recovering Lawyers' Fees and Other Costs Before the Community Courts

Abstract

As a rule, litigation before the EC courts is free of charge. However, there are both statutory and case-law-based rules about legal costs. In short, the successful party can recover its costs from the unsuccessful party (a) to the extent that the costs were necessary (or indispensable) for the purpose of the proceedings before the Community courts and (b) provided that the successful party applied for the award of costs. This is known as the award of costs or the cost-shifting rule. The rationale of the cost-shifting rule is that (a) a party who has succeeded in litigation - whether as applicant or as defendant - should not be worse off after the litigation has concluded, compared to its prior situation; and (b) the rule deters meritless claims. The reasoning is that those who are not confident of success will be less likely to bring a claim, for fear of having to pay the prevailing party's legal costs. This paper examines the rules on the award of costs and how they are applied in practice by the Community institutions and the Community courts. In particular, this paper looks at the recoverability of lawyers' fees and experts' fees; exceptional circumstances; unreasonable or vexatious costs; interveners' costs; and other typical and atypical issues that may arise in costs litigation.

Keywords: Legal costs, lawyers' fees, cost-shifting, award of costs, EU law, EC law, Community law, ECJ, CFI

JEL Classification: K41