LIABILITY OF THE PARTIES AS TO COSTS Flashcards
WHAT ARE COSTS?
- Costs are defined under the Advocates Act (Cap. 16) to include fees, charges, disbursements, expenses and remuneration that are either party-to-party costs or advocate-client awareded by the court
- Where parties did not agree from the outset the costs payable, the Advocates’ Remuneration Order (‘ARO’) applies to determine the fees due
- The only time that advocate’s fees will be considered a cost in party-and-party costs is when the agreement stipulates that one of the party’s is to pay the costs of the other party’s advocate in the event of breach of the contract
Section 27, Civil Procedure Act
gives the court discretion and empowers a judge to determine who should bear the costs, and upon an application by a party which property is to be attached and to what and to what extent such costs are to be paid
What is determined when looking at costs to award?
- The conduct of the parties;
- The subject of litigation;
- The circumstances which led to the institution of the proceedings;
- The events which eventually led to their termination;
- The stage at which the proceedings were terminated;
- The manner in which they were terminated;
- The relationship between the parties; and
- The need to promote reconciliation amongst the disputing parties pursuant to Article 159 (2) (c) of the
Constitution (Cecilia Karuru Ngayu v Barclays Bank & Another)
Section 48, Advocates Act
allows an advocate to recover costs of litigation from the client before a court of competent jurisdiction
* Such actions for recovery for costs due to an advocate or their firm may not be brought until the expiry of one month after a bill for such costs has been duly drawn up and signed by the advocate, filed and effectively served upon the client
* The court may or may not charge interest on costs at any rate not exceeding 14% and such interest shall be added to the costs and are recoverable
How are costs arrived at?
- Upon determination of a suit, the judgment holder makes an application by drawing up a Bill of Costs in accordance with the ARO strictly for costs properly incurred
- The Taxing Officer then hears and makes orders as to costs duly and properly taxed
- Both parties must be represented at the hearings
Section 45(6), Advocate’s Act
provides that where there was an agreement, the costs of an advocate could not be taxed unless there was fraud, illegality and or coercion in the agreement (John Maina Mburu T/A John Maina Mburu & Co. Advocates v George Gitau Munene)
Rule 11(4)
a) Should any party object to the decision of the taxing officer, he may within fourteen days after the decision, give notice in writing to the taxing officer of the items of taxation to which he objects
b) The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection
What should a party do if in objection to Taxing officers’ decision of costing?
The Applicant is required to file a reference to the Court to challenge the decision of the Taxing Officer and not an application for Review under order 45 of the Civil Procedure Rules and section 80 of the Civil Procedure Act (Hezekiel Oira T/A H, Oira Advocate v Kenya Broadcasting Corporation)
What is ‘Taxation of Costs’?
‘the process of fixing the amount of litigation-related expenses that a prevailing party is entitled to be awarded’
What are the CIRCUMSTANCES WHEN HIGH COURT CAN INTERFERE WITH THE TAXING OFFICERS EXERCISE OF DISCRETION?
Either the decision was based on an error of principle, or the fee awarded was manifestly excessive as to justify an inference that it was based on an error of principle.
* Where the Court considers that the decision of the Taxing Officer discloses errors of principle, the normal practise is to remit it back to the taxing officer for reassessment, unless the Judge is satisfied that the error cannot materially have affected the assessment
Is the court quick to intervene in Taxation matters?
where the Taxing Officer is more experienced and therefore more apt to the job; the court will intervene only in exceptional cases and multiplication factors should not be considered when assessing costs by the Taxing Officer by even the Judge on appeal
(National Oil Corporation Limited v Real Energy Limited)
Part III of the Advocates Remuneration Order
Gives a court the mandate to determine costs in contentious matters as between advocate and client and between party and party
What is the discretion of Subordinate Courts regarding costs?
- The subordinate court has a discretion either to assess costs ex parte and notify the parties or invite the parties and tax the same inter partes that is if the parties are not in agreement on a specific item which usually relate to instructions fees
- The practice of inviting parties for assessment of costs, though not mandatory, is desirable to give the other parties a chance to be heard in order to avoid unnecessary complaints or references for one reason or the other
Jesse Mburu Gitau & 3 Others v. Attorney General [2003] eKLR,
the court found none of the parties to the
suit successful and subsequently declined to award costs.
* The losing party will normally be ordered to bear the costs of the suit unless the court orders otherwise
* If a party is partially successful, the court may order the offending party to bear only part of the costs due
* Should the court find the parties equally to blame, the court may order that each party bears its own costs. In public interest matters, the court does not make any orders as to costs
* As a rule of thumb, the level of costs payable will vary depending on the amount of the claim, the complexity of the matter and the agreement of the parties
