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Judge slams Tesco over court costs

20 October 2009

Competition judges have condemned Tesco for running just under £1.5m in legal costs in its challenge to the introduction of a new competition test in planning applications.

Tesco’s total bill for the three-day hearing in March was £1,461,904. The sum included £240,000 for three expert witnesses, £711,156 in counsel fees, and more than £75,000 in copying charges. Drawing up the costs schedule came in at £12,089.

Costs for the separate relief hearing clocked up a further £203,590.

“The amount incurred is, by any standard, very large in the context of a judicial review, the hearing of which occupied the tribunal for three days,” said Competition Tribunal president Mr Justice Barling.

The supermarket giant brought judicial review proceedings in June 2008 over the Competition Commisssion’s proposal for a new test that would require planners considering applications for new large grocery stores to take account of the local market.

Tesco won on one point in March 2009 but the tribunal said at the time that this did not necessarily invalidate the commission’s report recommending the changes, although it eventually quashed the report a few weeks later.

Ruling on costs last week in Tesco v Competition Commission [2009] CAT 26, the tribunal made an award of £312,000 in Tesco’s favour, an amount equivalent to just over 21 per cent of Tesco’s costs.

The tribunal said it should be recognised that the case was one of particular complexity and importance where actual time in court represented the tip of the iceberg.

“A great deal of submissions are in writing, and for every day in court there will inevitably be many days of preparation by a good number of people on each side,” Barling J said.

The judge continued: “Nevertheless the amount is very large. Some confirmation of this is to be found when one compares Tesco’s costs with the amount incurred by the commission. As we have said, Tesco’s costs are approximately six times as large.”

Although the case was an important one, the judge found it would not be just to impose costs at this level on the commission.

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