Sh50bn and counting: The legal fees nightmare for counties
Auditor-General Nancy Gathungu addresses participants during a retreat of the Senate Liaison Committee at Eka Hotel in Eldoret, Uasin Gishu County, on June 5, 2024.
What you need to know:
- The 47 counties are grappling with Sh56 billion legal fees pending bills.
- Nairobi County is grappling with a bill of at least Sh21 billion in outstanding legal fees.
- Nakuru County on the spot over illegal expenditure of Sh116 million as payments to private lawyers.
County governments may soon not be allowed to hire external law firms if a Senate proposal to amend existing laws is adopted.
The Senate Justice, Legal Affairs and Human Rights Committee and the Senate Committee on Devolution have made the proposal.
This comes amid shocking revelations that the 47 counties are grappling with Sh56 billion in legal fees pending bills.
Some governors have been paying as much as Sh1 billion legal fees to lawyers to represent them or their counties in cases that can be handled by the Alternative Dispute Resolution (ADR) mechanism or by county attorneys.
The Senate is now mulling over amending the law to bar county governments from hiring external law firms.
Collusion between county officials and law firms, negligence and failure to utilise county legal officers have left most of the devolved units grappling with huge legal fees.
At the heart of the headache is the penchant of some counties to outsource legal services at high fees despite having full-fledged legal offices and county attorneys.
Nairobi County, for instance, is grappling with a bill of at least Sh21 billion in outstanding legal fees after outsourcing over 50 external law firms to represent it in court cases.
Governor Johnson Sakaja was recently baffled by the pending bill of legal fees incurred during previous administrations.
Sh400 million
He said that he found fee notes ranging from Sh400 million to Sh2 billion quoted for litigating small matters in court.
Mr Sakaja said they will embark on an internal audit to establish the reason behind the high fee notes, warning that those found culpable of colluding to inflate costs will face dire consequences.
“A county cannot be having a pending bill of Sh21 billion in legal fees only. I have told the county attorney that I’m going to hold to account anybody at City Hall behind such fee notes,” Governor Sakaja stated.
But Nairobi is not alone.
Auditor-General Nancy Gathungu recently put Nakuru County on the spot over illegal expenditure of Sh116 million as payments to private lawyers that represented the devolved unit in various matters in court.
In her 2022/2023 audit report, Ms Gathungu revealed that during the period under review, the county government engaged lawyers without following due process and there was also lack of evidence on which services were rendered to warrant the Sh116 million payments.
“During the year under review, legal expenses amounting to Sh116,085,352 were paid to various external law firms. However, a review of legal documents in respect of the expenditure revealed that the law firms were directly procured despite the services not being urgent and the reasons for using direct procurement were not provided for audit,"reads part of the audit report.
The report raises concern that taxpayers could have lost money. It further states that legal fees charged by external law firms had no itemised fee notes.
“There was no documentary evidence to show prior approval for use of the direct procurement method. Also, the legal fees charged by the external law firms did not have itemised fee notes or justifications for the amounts charged and, therefore, may not have been competitive,” the report further states.
The Senate Justice, Legal Affairs and Human Rights Committee and the Senate Committee on Devolution are reviewing a petition regarding restricting county governments from hiring external law firms.
Legal fees
Members of the joint committees have backed a petition by Nakuru-based activist, Laban Omusundi, saying many county officers use legal fees as an avenue to steal public funds.
Kisii Senator Richard Onyonka wondered why all counties were hiring external lawyers yet they have county attorneys.
“What is even more worrying is it is an avenue to pilfer county funds. We must stop this and protect our counties from becoming dens of corruption. The billions of shillings being stolen could have been put to better use,” said Mr Onyonka.
Siaya Senator Dr Oburu Oginga said the habit of hiring external lawyers has been an avenue of pilfering public funds.
Nominated Senator Catherine Mumma urged the Senate to establish whether counties were getting value for money by engaging external advocates.
