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I recently drafted Points of Dispute that contained the following dispute:
“It is noted that work is claimed relating to funding (eg items 7 and entries on 13/9/11 (fourth) under documents) despite clear Court of Appeal authority from 2011 (see paragraphs 108, 114 and 145 of Motto v Trafigura Ltd  EWCA Civ 1150) that such work is not recoverable. It is clear that the fee earner/s responsible for drafting the Bill and checking the same are not aware of the distinction between recoverable and irrecoverable work and it is anticipated that non-chargeable routine communications with the Claimant have been included. The Defendant, adopting a broad-brush approach, offers 80% of the routine communications claimed (ie 20 routine communications). If the same is not accepted the Court will be asked to determine the recoverability of each and every item claimed and the Defendant will request that the cost of this task be paid by the Claimant in any event.”
When Replies were served, out of time, they contained the following response:
“The Claimant is surprised by the dispute raised which illustrates that the Defendant’s fee earner responsible for preparing the Points of Dispute are not aware of the methodology applied in costs proceedings. The funding costs can be included within any Bill of Costs as they have been properly incurred. We have now conceded the said items rendering them irrecoverable.
Does the Defendant seriously suggest that all Bill of Costs that suffer a reduction have been improperly drawn through a lack of awareness?”
Now, the statement that these costs were rendered irrecoverable as a result of the concession in the Replies is clearly poppycock. They are irrecoverable because that is what the law is (as clarified by the Court of Appeal). Such costs were irrecoverable before, during and after the Bill, Points of Dispute and Replies were prepared.
However, ignorance of how the law operates aside, this shows why costs is an area of the law that has fallen into such disrepute. If this work had been included within the Bill as a result of ignorance of the relevant case law, that would be unfortunate but no worse. Instead this is a perfect of example of parties including work they know to be irrecoverable in the hope the other side does not pick up on this.
Murray Heining, Chairman of the Association of Costs Lawyers, recently commented on this issue and repeated the comments of Dyson LJ (as he then was) in Buxton v Mills-Owens  1 WLR 1997:
“[the solicitors] were under a professional duty not to include in the court documents that they drafted any contention which they did not consider to be properly arguable and not to instruct counsel to advance contentions which they did not consider to be properly arguable.”