How much should you pay your advocate? For the longest time, advocates' remuneration has been a source of controversy in Kenya, a matter that has been brought to a conclusion by the Supreme Court.
In a recent judgment given in favour of the Kenya Airports Authority (KAA) against their advocates, the court slashed an advocate’s fees by 97.4 percent, from Sh196 million to Sh5 million.
“The taxing officer as well as the High Court judge did not in any way err in law or principle, in the assessment of advocate-client instruction fees.
“Moreover, an increase of the instruction fees from Sh5 million to Sh196,044,750.50 amounted to an impediment to access to justice,” Supreme Court judges Martha Koome, Mohammed Ibrahim, Smokin Wanjala, Isaac Lenaola and Njoki Ndungu ruled.
The suit in contention dates back to 2009 in the High Court of Kisumu, where 54 individuals (original plaintiffs) instituted a suit against the KAA, claiming it had compulsorily acquired their land bordering the Kisumu International Airport.
The parties were alleging that KAA had failed to compensate them. As a result, they sought compensation of Sh258 million each amounting to Sh13.9 billion.
In response, KAA (appellant) requested the firm of Otieno, Ragot & Co (respondents) Advocates to act on its behalf.
Acting under instructions, the law firm challenged the competency of the suit, telling the court that the plaintiffs had failed to serve KAA’s Managing Directory with a one-month notice of their intention to commence legal proceedings as required.
Additionally, KAA argued that the plaintiffs should have first filed the suit at the Land Acquisition Compensation Tribunal before seeking the intervention of the High Court. The High Court agreed with KAA and struck out the suit.
What happened afterward forms the gist of the case that has reached the Supreme Court. The law firm submitted a party-party bill of costs for the KAA dated June 28, 2010, to be reviewed by a taxing officer in accordance with the Advocates Remuneration Order.
However, KAA claims that the respondent filed the bill without their approval. In the bill of costs, the law firm asked for Sh151 million.
Of this amount, Sh130,704,900 was for instruction fees, based on the claim that the respondent was hired to defend the primary suit. Upon review, the taxing officer set the amount at Sh151,650,000.
The law firm then wrote a letter to KAA about the option to pursue the original plaintiffs for the taxed costs. However, the lawyers also warned that due to the plaintiff's impecuniosity (not having enough money to pay), the appellant might have to cover the auctioneers' fees, which could amount to millions, even if the execution was unsuccessful.
In July 2010, the law firm asked KAA to settle a fee note of Sh227 million for the service it had rendered. A back-and-forth ensued between the parties without any agreement. Ultimately, in 2011, the advocates filed an advocate-client bill of costs at the High Court to be reviewed by a taxing officer.
Before the advocate-client bill of costs could be reviewed, KAA filed a lawsuit in the High Court against the advocates, arguing that the latter’s bill was based on an unsubstantiated compensation claim by the original plaintiffs.
The bone of contention was the Sh130 million sought as instruction fees, which the advocates said was premised on the Sh13 billion sought as compensation by the original plaintiffs.
KAA also sought to halt the taxation of the respondent’s advocate-client bill of costs until the suit was resolved. In a ruling, judge Ali Aroni granted the request.
The law firm appealed at the Court of Appeal, which ruled that the High Court judge had overstepped by stopping the taxation and thus set aside the stay orders.
Judges during a Court of Appeal hearing. FILE PHOTO | NMG
Photo credit: File| Nation Media Group
This decision allowed the taxation of the respondent’s advocate-client bill of costs to proceed for review. Pauline Mbulikah, Deputy Registrar of the High Court was appointed the taxing officer.
In making her decision, she concluded that the value of the subject matter in the primary suit could not be determined as the plaintiffs had not provided details of the acquired parcels of land.
She set the instruction fees of the advocate at Sh5 million and the total advocate-client costs at Sh8.7 million.
Dissatisfied, the advocates appealed at the High Court and requested that the instruction fees determined by the taxing officer be set aside.
The late Justice David Majanja handled the appeal and upheld the taxing officer’s decision.
The law firm moved to the Court of Appeal to challenge the High Court’s decision. The appeal focused on the instruction fees, where the advocates alleged that the High Court erred by failing to recognise that the taxing officer should have considered the party-party certificate of costs when determining the costs.
In a majority judgment rendered in 2021, the judges of the Court of Appeal, Justice Agnes Murgor and Justice William Ouko (now at the Supreme Court), with Justice Gatembu Kairu dissenting, overturned the decision of the High Court and ruled in favor of the advocates even raising their instruction fees.
Not one to back down without a fight, KAA rushed to the Supreme Court, arguing that the matter was one of general public importance.
In a decision that is set to clarify advocates' remuneration, the court stated that instruction fees for advocates ought to take into account the amount of work done by an advocate and the prevailing economic times and should be reasonable enough to ensure that the charges are not an impediment to access to justice.
KAA told the Supreme Court judges that the Court of Appeal overlooked the principle that when the value of the subject matter cannot be determined, a taxing officer must use their discretion, considering relevant factors, to set the instruction fees.
Consequently, the appellant (KAA) argued that the majority of the judges of the Court of Appeal made a mistake in deciding that the instruction fees in the advocate-client costs should be based on the party-party costs.
In distinguishing the two costs, KAA states that Party-Party costs aim to compensate successful litigants for unnecessary litigation expenses incurred, while advocate-client costs aim to remunerate advocates for work done based on their client’s instructions.
The authority argued that the decision posed a risk to the general public's right to access justice, particularly those from humble backgrounds.
In their submissions, the advocates told the Supreme Court judges that a taxing officer is strictly required to increase the instruction fees determined in the party-party costs by one-half when assessing instruction fees in advocate-client costs.
In assessing the party-party costs, the highest court in Kenya stated that the original plaintiffs did not provide any details or the value of the parcels of land allegedly compulsorily acquired by the appellant.
This information was necessary to guide the taxing officer in assessing reasonable costs. “The original plaintiffs had merely claimed a sum of Sh.13,932,000,000 as special damages, stating that the details would be provided during the hearing.
Consequently, the value of the subject matter could only have been determined at the conclusion of the trial, which never occurred.
The position still remains that the amount therein has not been ascertained or determined, and as such, it cannot be applied as the value of a subject matter in a disputed taxation,” said the court.
The court stated that the assessment of instruction fees in advocate-client costs is determined by increasing the party-party costs by half.
However, the taxing officer has discretion when assessing instruction fees, even where the Party-Party costs have been taxed.
