Attorney General & another v Commission on Administrative Justice (Civil Appeal 7 of 2018) [2024] KECA 1157 (KLR)
The bottom line
#Kenya's Court of Appeal ruled the insurance regulator had power to set premiums but quashed the motor insurance price guidelines anyway for lacking justification.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Insurance Regulatory Authority acted within its statutory powers under section 3A of the Insurance Act when it issued the Motor Insurance Underwriting Guidelines under Circular No IC 07/2009
- 2.Whether the setting of premium prices was a rational, reasonable and proportionate exercise of IRA's regulatory power
Key legal issues
#Whether IRA had statutory power to issue premium-setting guidelines
Yes - the trial judge erred in holding that regulation under section 3A excludes price setting; regulatory power can include setting premium prices.
The court undertook a contextual statutory interpretation of the undefined term 'regulation', noting section 3A(2)'s objectives of a fair, safe and stable insurance sector, protection of policyholders and promotion of the sector. Drawing on Klein's three means of insurance regulation (solvency, price and market conduct regulation), it concluded that price regulation falls within the statutory concept of regulation, reversing the High Court's narrow reading of section 3A of the Insurance Act.
Whether the price regulation was rational, reasonable and proportionate
No - IRA provided no market justification (such as monopoly) for price regulation as opposed to other regulatory means, so the guidelines were irrational, unreasonable and disproportionate.
Applying section 7(2)(i), (k) and (l) of the Fair Administrative Action Act and the Wednesbury and proportionality standards, the court held that although price regulation can be within power, IRA failed to justify it as the most appropriate intervention, adduced no evidence of monopolies justifying price fixing, and ignored the market distortions and 'downward spiral' risks of rate suppression identified in the comparative literature cited.
Whether the High Court's declaration of unconstitutionality was justified
No - the trial judge never interrogated the constitutionality of the guidelines in substance or effect, so the unconstitutionality finding had no basis and was set aside.
The court noted that the learned trial Judge did not interrogate the constitutionality or otherwise of the impugned guidelines, whether in substance or effect, yet issued a declaration that they were illegal, unconstitutional and null and void. Since that finding was unsupported by any analysis, it constituted an error, and both declarations of illegality and unconstitutionality were set aside.
Legal principles established
#- A statutory body may only act within the scope of its conferred powers; action beyond them is ultra vires and null and void, and a body also acts unlawfully where it incorrectly interprets a provision as conferring a power that it does not confer.
- A statutory body acting within its powers may nonetheless act unlawfully if its decision is irrational, unreasonable or disproportionate, being grounds of review under the Fair Administrative Action Act.
- Regulation under section 3A of the Insurance Act can encompass the setting of prices for insurance services.
- On an appellate review, findings of the trial court will be departed from only where they are not based on the evidence on record, where wrong principles of law were applied, or where discretion was exercised injudiciously.
Court orders
#- 1.Set aside the two declarations of illegality and unconstitutionality of the Motor Insurance Underwriting Guidelines made by the High Court
- 2.Affirm and uphold the order of certiorari quashing the Motor Insurance Underwriting Guidelines issued by IRA under Circular No IC 07/2009 dated 20/11/2009 on the ground that the guidelines were irrational, unreasonable and disproportionate
- 3.Order that each party bears their own costs of the suit in the High Court and of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- Nairobi Constitutional & Human Rights Petition No 622 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court in a constitutional petition (not expressly stated beyond the appeal itself)
Relief refused
#CAJ's claim that IRA acted wholly outside its statutory powers in issuing the guidelines
The court found that regulatory powers under section 3A of the Insurance Act can include setting prices
Costs
Each party bears their own costs of the suit in the High Court and of this appeal
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In conclusion, this appeal therefore partially succeeds with respect to the finding that IRA acted within its powers in issuing the impugned guidelines, in the exercise of its mandate of regulation of the insurance industry.
We have however found that the impugned guidelines were irrational, unreasonable and disproportionate. We accordingly afirm and uphold the order of certiorari issued by the High Court in the said judgment to quash the Motor Insurance Underwriting Guidelines issued by IRA under Circular No IC 07/2009 dated 20/11/2009 for this reason.
We therefore order that each party bears their costs of the suit in the High Court and of this appeal in the circumstances.
A statutory body, even when acting within its powers, may still act unlawfully if its decision is irrational, unreasonable or disproportionate.
Issues in the judgment
#The judgment is internally inconsistent in how it describes the parties in the High Court, referring to the impugned party as both 'the 2nd appellant' and 'the first respondent' when reciting the High Court orders.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Republic v Attorney General & 7 others; Wilson (Ex parte Applicant) (Suing on Behalf of the Residents of Chepchoina Phase 111 in Trans Nzoia County) (Environment and Land Judicial Review Case E005 of 2024) [2026] KEELC 1650 (KLR)[2026] KEELC 1650 (KLR)18 Mar 2026
- Ochieng v Republic (Criminal Appeal E120 of 2022) [2025] KECA 1905 (KLR)[2025] KECA 1905 (KLR)7 Nov 2025applied
Cite this brief
#Cite this brief
Caselaw, "Attorney General & another v Commission on Administrative Justice (Civil Appeal 7 of 2018) [2024] KECA 1157 (KLR)", Case Analysis (2024). Court of Appeal at Nairobi (memorandum of appeal dated January 9, 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1157/eng@2024-09-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.