European CFI blasts Slaughters’ high rates for Airtours litigation

The European Court of First Instance (CFI) has handed down a scathing judgment on Slaughter and May’s costs in the groundbreaking Airtours litigation.

On 28 June, the five-person tribunal agreed with the European Commission, which Slaughters beat in the litigation, that the firm’s fees were “exorbitant”.

In the absence of an hourly costs breakdown from Slaughters, the tribunal performed its own calculations of the firm’s hourly rates, estimating a blended rate for partners, associates and junior lawyers of almost £500 per hour.

Airtours, now trading as MyTravel, will get a bill for £850,000 from Slaughters, but the Commission will pay just £250,000 of the total. The CFI also slashed costs for MyTravel’s barristers and economists Lexecon.

Slaughters scored a historic victory over the Commission in June 2002 when the European Court of Justice overturned the Commission’s decision to block the Airtours-First Choice merger.

The CFI’s views on City fees are well known, but sources close to Slaughters said the firm is delighted with the amount recovered.

Freshfields Bruckhaus Deringer commercial and international litigation partner Jon Lawrence, who deals with the CFI regularly, said: “It’s very difficult for a law firm to get back the same proportion of costs you would expect in England.”

But Howrey Simon Brussels-based partner Trevor Soames said: “The judgment is a strong criticism of the way British international law firms operate and raises serious questions about massive overstaffing and leveraging down to assistants.”

Although the Airtours-First Choice merger was long dead, the decision was a success for Slaughters competition partner Malcolm Nicholson and a moral triumph for MyTravel.