Justus Mutiga & 2 others v Law Society of Kenya & another [2018] KECA 338 (KLR)
The bottom line
#Kenya's Court of Appeal struck down the insurer-backed cap on road accident compensation, confirming courts alone decide what accident victims are awarded.
What this practically means
#Executive summary
#Key legal issues
#Whether the Structured Compensation schedule applies pre-judgment and compromises judicial authority
The schedule applies post-judgment, since section 10 of the Principal Act presupposes claims based on court judgments. However, because assessment of damages is a judicial function that cannot be delegated, the schedule cannot be incorporated into any judgment without rendering it null and void; the High Court's declaration of unconstitutionality of sections 3(a) and 6 was upheld.
The court held that a judgment exists only upon delivery, so the schedule operates post-judgment, contrary to the High Court's reasoning on that point. But computation of damages after pronouncement is a judicial function which cannot even be delegated to the Registrar. Any post-judgment interference with the judgment by anyone purporting to calculate percentages would render the judgment a nullity. The schedule therefore has no place in the Principal Act and is unconstitutional, vindicating the result reached by the High Court.
Whether the limitation of the amounts recoverable under the schedule is justified
The limitation is unjustified. No evidence was adduced to prove justification; the cap leaves innocent third parties to recover the excess personally from insureds, defeating the objective of compulsory third party insurance.
The appellant argued the schedule balanced the interests of insurers, insureds and claimants and addressed insurer insolvency, drawing parallels with the Workmen's Compensation Act and Work Injury Benefits Act. The court found those statutes had not been raised at trial, and the evidence showed insolvency stemmed from many causes beyond compensation levels. Limiting compensation payable by the underwriter who received premiums, against an innocent third party armed with a court judgment, offends the very essence of insurance.
Whether the learned Judge misapprehended the purpose and intention of the schedule
No. The court found no reason to interfere with the reasoned judgment of the High Court and dismissed the appeal.
The appellant contended the schedule provided an expeditious, cost-effective settlement mechanism and streamlined the industry. The court accepted that section 5(b) caps only recovery from the insurer, not the court's award, agreeing with the judge that section 5(b) is constitutional. But the schedule itself could not stand, as it compromises judicial authority post-judgment. On the whole the appeal was devoid of merit.
Legal principles established
#- The Structured Compensation schedule introduced under section 6 of the Insurance (Motor Vehicle Third Party Risks) (Amendment) Act, 2013 applies post-judgment, but any post-judgment computation of damages awarded by a court is a judicial function that cannot be delegated; the schedule cannot be incorporated into any judgment without rendering it null and void.
- Computation of monies awarded as damages is a judicial function which cannot be performed by the Registrar of the court or delegated; a judgment left incomplete for assessment is a nullity.
- The cap under section 5(b) of the Insurance (Motor Vehicle Third Party Risks) Act limits only the amount recoverable from the insurer and does not fetter the court's discretion to award more, so section 5(b) is constitutional.
- A decision only becomes a judgment upon delivery, and not before.
Court orders
#- 1.The appeal is dismissed
- 2.No order as to costs
- On appeal from
- High Court of Kenya at Nairobi
- Constitutional Petition No. 148 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 29(a) of the Court of Appeal Rules; constitutional petition appeal from the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Justus Mutiga & 2 others v Law Society of Kenya & another [2018] KECA 338 (KLR)", Case Analysis (2018). Civil Appeal No. 141 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/338/eng@2018-04-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.