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Court of AppealDismissedKisumu Civil Appeal (ruling of Ochieng, J in Kisumu High Court Misc Application No 63 of 2018)

Otieno, Ragot & Company Advocates v Kenindia Assurance Co. Ltd (Civil Appeal 129 of 2019) [2023] KECA 1398 (KLR)

Court of Appeal
24 November 2023
JNJoel NgugiPKP. O. KiageMNMumbi Ngugi
4,593 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed that advocates must claim 14% interest in their Bill of Costs itself, not later during enforcement proceedings.

What this practically means

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Executive summary

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This Court of Appeal judgment, delivered at Kisumu on November 24, 2023 by Ngugi, JA with concurring judgments by Kiage, JA and Mumbi Ngugi, JA, dealt with a single issue: whether an advocate may charge the 14% per annum interest allowable under rule 7 of the Advocates Remuneration Order on a taxed Bill of Costs when that interest was never included in the original bill served on the client and taxed. The appellant advocate had its bill of costs taxed at Kshs 57,161 and a certificate of costs issued; it then applied under section 51(2) of the Advocates Act for adoption of the certificate as judgment and, for the first time, sought 14% interest from one month after service of the bill. The High Court (Ochieng, J) adopted the certificate but awarded interest only at court rates from the date of its ruling. The Court of Appeal dismissed the appeal, holding that the Bill of Costs must contain the totality of the advocate's claims so the client has notice; once a bill is taxed and a certificate issued, the advocate cannot add claims, and the only recourse against an omission is a reference under rule 11. Kiage, JA emphasised the proviso in rule 7 requiring the interest claim to be raised before payment or tender in full, and suggested advocates place a cautionary notice on bills. The court affirmed the High Court decision, dismissed the appeal, and ordered each party to bear its own costs, noting conflicting High Court decisions on the topic. This binding rule now requires advocates to plead rule 7 interest in the bill itself.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether an advocate can charge the potentially allowable interest of 14% pa under rule 7 of the Advocates Remuneration Order on a taxed Bill of Costs when the advocate did not include the interest in the original Bill of Costs served on the client and taxed by a Taxing Master
  2. 2.Whether an advocate can retroactively charge the allowable interest of 14% under rule 7 after the Bill of Costs has been taxed and a Certificate of Costs issued

Key legal issues

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01

Whether 14% interest under rule 7 can be claimed after taxation if not included in the Bill of Costs

Holding

No. The claim for interest must be included in the Bill of Costs and litigated before the Taxing Master; if omitted, it can only be pursued via a rule 11 reference, not in section 51(2) adoption proceedings.

Reasoning

The Bill of Costs serves to notify the client of the totality of the advocate's claims and is the only basis on which taxation proceeds. Once taxed and a Certificate of Costs issued, the certified sum is the totality of the client's indebtedness. Permitting piecemeal claims would remove the incentive for clients to pay promptly or object, and for advocates to avoid delaying bills to accrue interest. Policy requires full notice of all claims at the earliest stage.

p. 10
02

Whether the High Court judge misdirected himself by awarding interest at court rates from the date of the ruling

Holding

No. In the absence of a rule 7 claim in the bill, the court's award of interest at court rates under its general discretion was proper and not an abuse of discretion.

Reasoning

The advocate neither claimed 14% interest in the bill nor filed a rule 11 reference challenging its omission. The certificate of costs was final as to the amount; the only interest available was at court rates at the court's discretion under section 26 of the Civil Procedure Act. The learned judge therefore did not misapprehend the law or improperly exercise his discretion in disallowing the 14% claim and awarding interest at court rates.

p. 10

Legal principles established

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  • An advocate claiming 14% interest under rule 7 of the Advocates Remuneration Order must include the claim in the Bill of Costs served on the client and litigated before the Taxing Master; the claim cannot be raised for the first time in section 51(2) adoption/enforcement proceedings.
  • Once a Bill of Costs is taxed and a Certificate of Costs issued, the door is closed on the advocate to add further claims against the client based on the representation; dissatisfaction lies only in a reference under rule 11.
  • Where no reference under rule 11 is filed, the Certificate of Costs amount is final, subject only to interest at court rates in the discretion of the court adopting the certificate as judgment.

Court orders

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  1. 1.Appeal dismissed
  2. 2.Each party to bear its own costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

JN
majority

Wrote the judgment

Wrote the lead judgment holding that an advocate must include a claim for 14% interest under rule 7 of the Advocates Remuneration Order in the Bill of Costs served on the client and taxed; it cannot be raised for the first time in section 51(2) adoption proceedings.

it was not open to the appellant to claim the potentially permissible interest rate of 14% for the first time during adoption proceedings under section 51(2).p. 3
PK
concurring

Wrote the judgment

Concurring judgment stressing timely notice: an advocate must raise the 14% interest claim before the bill is paid or tendered in full, and ideally give a cautionary notice on the bill itself; having failed to do so, the claim could not be raised at the adoption stage.

Having failed to give such notice at delivery of its bill to the client and not having included the claim for such interest at such rate in the Bill of Costs it filed before the High Court on May 29, 2017... it was not open to the appellant to claim it when seeking adoption of the Certificate of Costs as a judgment of the court in a subsequent application.p. 11
MN
majority

Wrote the judgment

Concurred entirely with the judgment of Joel Ngugi, JA, adding nothing further.

I have had the benefit of reading in draft the judgment of my brother, Joel Ngugi, JA which I entirely agree with and have nothing useful to add.p. 11
On appeal from
High Court
Kisumu HC Misc Application No 63 of 2018 (Kisumu HC Misc No 63 of 2017)
Jurisdiction invoked
First appellate appeal to the Court of Appeal against the High Court ruling; no specific constitutional or statutory invocation beyond the Advocates Act and the Advocates Remuneration Order is stated in the judgment.

Relief refused

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Setting aside of the High Court ruling and award of 14% pa interest on the taxed costs of Kshs 57,161 from June 29, 2017 until payment in full

The advocate did not include the interest claim in the Bill of Costs served and taxed, nor file a reference under rule 11; the claim could not be raised for the first time in section 51(2) adoption proceedings.

p. 10

Costs

Each party bears its own costs

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The upshot is that the appeal lacks merit. I propose that it be dismissed. Noting some of the confiicting High Court decisions on the topic, however, I would propose that each party bears its own costs.
p. 10Disposition and costs
Having failed to give such notice at delivery of its bill to the client and not having included the claim for such interest at such rate in the Bill of Costs it filed before the High Court on May 29, 2017, with the efiect that it was not included in the certificate of costs dated July 4, 2018 for Kshs 57,161 upon taxation, it was not open to the appellant to claim it when seeking adoption of the Certificate of Costs as a judgment of the court in a subsequent application.
p. 11Timely notice required for rule 7 interest
It is not open to the advocate to spring the claim of interest for the first time at the enforcement proceedings under section 51 of the Advocates Act.
p. 10Interest claim cannot be raised at enforcement stage
As Mumbi Ngugi, JA also agrees, it is so ordered.
p. 11Final orders

Issues in the judgment

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minor

The judgment contains conflicting dates for the Bill of Costs, describing it as dated May 23, 2017 and served May 29, 2017 at the start, but later stating it was dated May 23, 2018 and served May 29, 2018.

minor

The judgment gives conflicting dates for the Certificate of Costs: July 4, 2018 and July 23, 2018.

minor

The judgment gives conflicting taxation dates: taxed on July 14, 2018, but the certificate is stated as dated July 4, 2018, which precedes the taxation date.

minor

The judgment contains a typographical error rendering 'reflected' as 'refiected' and 'effect' as 'efiect', consistent with an OCR-quality source text.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Otieno, Ragot & Company Advocates v Kenindia Assurance Co. Ltd (Civil Appeal 129 of 2019) [2023] KECA 1398 (KLR)", Case Analysis (2023). Kisumu Civil Appeal (ruling of Ochieng, J in Kisumu High Court Misc Application No 63 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1398/eng@2023-11-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.