Lawyers and outrageous legal fees charged on state corporates

A senior lawyer once demanded Sh76 million fee in order to represent the Central Bank of Kenya (CBK) at a Public Procurement and Administrative Review Board hearing for five days.

The lawyer was acting for the bank in a case that was challenging award of a security surveillance tender. CBK bosses were shocked by the demand and sought alternative representation.

This is an example of the increasingly outrageous legal fees being charged by some legal firms in Nairobi that are mainly targeting State corporations, constitutional commissions and public offices for their numerous cases and willingness to spend.  

The group of lawyers runs a cartel-like outfit, locking out their colleagues from the lucrative deals. The proceeds from the deals are shared with senior government officials in form of kickbacks.

“What we have seen are people in government negotiating with certain lawyers so that they can also get their cut,” said lawyer Haroun Ndubi. 

The concern arose following revelations that another group of lawyers including Fred Ngatia were demanding Sh290 million for representing the Kenya Airports Authority in the case against businessman Kamlesh Pattni and his company World Duty Free. 

The lawyers were demanding the fees for getting Mr Pattni and his company World Duty Free to, among other things, drop the claim of sole and exclusive rights to operate duty free shops at all airports. 

The Sh290 million was part of the Sh384 million for defending KAA in two court cases filed by World Duty Free. Mr Ngatia has since clarified that the money was not meant for him alone but was to be shared among the lawyers KAA had hired for their services in the high-profile case.

National Social Security Fund (NSSF) and the Kenya Pipeline Corporation are the other public institutions that lawyers are falling over themselves to represent. A single file, the Sunday Nation understands, is all that the lawyers need to sustain themselves for years.

Lawyers representing the Independent Electoral and Boundaries Commission (IEBC) before the Supreme Court petition had also slapped it with a bill of Sh360 million.

The petition was filed by Cord leader Raila Odinga, the Africa Centre for Open Governance Executive Director Gladwell Otieno, and activist Zahid Rajan after the March 4 General Election.  

The petition was challenging the announcement of Jubilee coalition’s Uhuru Kenyatta as the winner of the presidential elections. 

IEBC chairman Ahmed Issack Hassan had on June 4, 2013 told the National Assembly’s Justice and Legal Affairs Committee that IEBC was paying its lawyers Sh26 million daily to defend it during the 14-day presidential petition. 

That was besides the amount the commission owed its suppliers at the time and the 188 petitions filed for other electoral positions across the country. 

“There are 188 petitions filed against the commission and it is anticipated that legal fees will be Sh506 million, considering all the costs associated with the cases,” Mr Hassan had said. 

In the Supreme Court petitions, IEBC was represented by advocates Aurelio Rebello, Lucy Kambuni, Mohammed Nyaoga, Paul Nyamodi, Eric Gumbo, Nani Mungai, Hillary Sigei, Mahat Somane and Kimani Muhoro.

Lawyers Ahmednassir Abdullahi and Kamau Karori, meanwhile, had represented Mr Hassan who was also a respondent in his capacity as the returning officer for the presidential elections.  

Lawyer Abdullahi was understood to be demanding between Sh30 million and Sh50 million from the commission for his services rendered during the 14 days, a figure which was said to be way above what IEBC’s lead lawyer was asking for in legal fees. 

LAND COMPENSATION

Meanwhile, a lawyer who successfully petitioned the State to pay Sh860 million compensation for land acquired for the Lamu port also wants the government to pay him Sh100 million for his services. 

George Wakahiu had represented 146 landowners who benefited from the payouts for giving up their land for the construction of Lamu port. However, he said, the government had yet to settle his legal fees and instead transferred the compensation directly to the land owners. 

Mr Ndubi also pointed at the 2004 case by Rev Timothy Njoya and others against the Attorney General and the Constitution of Kenya Review Commission in which the court ruled that the Wako draft constitution had to be subjected to a referendum.

“We appeared in court for about five days and some of the lawyers involved were demanding more than Sh75 million for their services,” he said. 

In addition, the civil society have also been slapped with a bill of more than Sh70 million after the court compelled them to pay Sh77 million as the cost of the suit in which they had challenged the eligibility of Mr Kenyatta and his running mate William Ruto to contest last year’s General Election.

For Mr Ndubi, the concern about the fees some of the lawyers are demanding is there more so given that the state corporations do not engage in open tendering for legal services.

“It is more of headhunting to get certain people who will give the corporation chiefs kickbacks. Another question that arises is about the role of the State Law office. By law, the State Law office should be the one to handle such cases unless a particular case needs certain expertise or the Attorney General’s office is overstretched,” he said. 

Furthermore, he said the State Corporations have full time legal departments yet they still outsource services. “What then is the need of having the legal departments?” he asked.

The chairman of the Law Society of Kenya, Mr Eric Mutua, said the lawyers should not be vilified for the size of the fee notes they are raising for acting for the public constitutions.

According to Mr Mutua, some of the clients rush into negotiations with the lawyers whenever there is a disagreement over the amount yet there are other judicial ways to sort out the matter.

The recommended way, he said, is to take the matter before the deputy registrar of the High Court when there is a disagreement. 

“The blame is on the clients, majority of who seem to be parastatals. When they can’t agree with the lawyer, they start negotiating when there is recourse to go before the deputy registrar of the High Court,” said Mr Mutua.

According to Mr Ndubi, the legal fees payable is determined by two factors, namely: the complexity of the case and the monetary value involved. 

“We have regulations, the Advocates Remuneration Order, which provides for the minimum fees for various types of cases. However, the lawyer and the client can negotiate a fee higher than the prescribed one but not lower. This is to avoid undercutting colleagues,” he added.