Unravelling advocates’ fees

By Pravin Bowry

Advocate Kenneth Kiplagat’s original claim for fees of Sh3.4 billion, reduced ultimately to Sh600 million, whilst making legal history has raised interest on the mode of assessing lawyers’ fees.

The amount claimed, awarded and ultimately received by advocates for services rendered in all civil matters is governed by the law. Intricate and complicated rules have been formulated under the Advocates Remuneration Order, last amended by Legal Notice 50 of 2009.

An advocate is not allowed to ‘undercut’, that is, charge less than the minimum stipulated scale fees.

All court related civil matters are said to be litigation matters and the law sets the minimum fees. The mechanism of charging fees is different in the High Court with subordinate courts having a separate scale of fees.

In civil litigation, there are two distinct methods of determining fees and these are said to be ‘party and party’ fees and ‘advocate and client’ fees.

Mode of charging

‘Party and party’ costs are based on the principle that the unsuccessful party in any case must, unless the court otherwise orders for good reason, pay the successful party.

After a matter is finalised, the successful party and the loosing party may agree on the costs to be paid. Failure to this, a Resident Magistrate of any designation who has been gazetted as a Registrar or Deputy Registrar of the High Court can adjudicate upon the quantum of fees between opposing parties or between an advocate and client.

The Magistrate (in his capacity as Taxing Officer), decides on all matters of fees. The taxing officer’s decision is appealable to the High Court and the Court of Appeal.

And what are ‘advocate and client fees? In a concluded matter, the minimum advocate/client fees is that assessed by the taxing officer increased by one half. An unsuccessful litigant pays the opposing side and his own lawyers’ costs and in the same breath the winning side’s lawyer gets fees from the loosing party and his own client.

Every single aspect of costing is provided for by law, from writing a letter, perusing it to appearances in court. But the ‘instruction fees’ are based on the value of the subject matter, and whether the matter is defended or undefended. The instructions fees on a defended dispute of Sh20 million is presently Sh362,000 and thereafter 1.25 per cent on any additional amount.

Hourly rate

The Remuneration Order provides minimum fees in all matters including sale of land, mortgages, agreements, leases, trademarks and company law matters.

As between his own client, in conformity with international practice, an advocate is now allowed to charge fees at such hourly rate as may be agreed with a client.

The law does not stipulate any minimum fees relating to criminal matters, leaving the matter between an advocate and client. Normally, fee is based on the gravity of the offence, the possible sentence and the likely time the matter may take.

All advocates’ fees attracts 16 per cent VAT, though advocates have in place an injunction barring the usage of ETR machines.

A taxing officer deals with the matters of cost only after filing an itemised bill of cost.

Back to Sh3.4 billion bill! The answer lay in the value of the subject matter of the dispute, the complexity of the case and the time the matter took as adjudicated upon by the taxing officer, whose discretion in assessment of fees is profound.