Court orders lawyer to pay former client Sh62 million in payout dispute

The High Court has ordered an advocate to pay Sh62,915,950 to a former client, Simpson Kwayera, after finding he unlawfully withheld money received on the client’s behalf.

The dispute arose from a long-running claim dating back more than a decade.

According to court papers, the client had instructed the advocate to pursue a substantial settlement from a government ministry.

After years of correspondence, meetings, and official approvals, the money was said to have been eventually released in July 2021 into the advocate’s account.

In evidence presented in court, the final tranche amounted to Sh85,735,950. The client, through lawyer Edgar Busiega, alleged that only a portion of this reached him.

The applicant further alleged that the advocate kept the remainder, ignored calls, and failed to participate in a bank meeting arranged for disbursement instructions.

In his defence, the advocate admitted receiving the money but claimed it had been “fraudulently processed” by some government officials.

He said he distributed the funds to the client’s business associate and unnamed “facilitators,” not to the client.

The court described this as “one of the most striking defenses” it had encountered, noting that an advocate cannot justify withholding client funds by branding them as illegally obtained.

“It is the respondent's position that the applicant has lodged these proceedings as a cover-up of the fact that the sum of Sh60,000,000 and Sh85,000,000 was fraudulently processed and paid,” part of the judgment stated.

“That line of defense, I must say, is one of the most striking defenses I have ever come across in my practice as a lawyer, where a party seeks to avoid liability by arguing that they retained the money since they believed that the sum was illegally obtained!”

The judge emphasised that the lawyer had a fiduciary duty to either transmit the funds to the client, deducting only agreed legal fees, or report any irregularities to authorities.

The judgment dismissed arguments that the case was redundant because a disciplinary tribunal had already ruled on the matter earlier this year.

The court clarified that such decisions do not bind the High Court, which retains the power to independently evaluate the evidence.

In his ruling, the judge found that the advocate had received money clearly intended for his client and failed to release it.

“Judgment is accordingly entered against the respondent for the sum of Sh62,915,950.00, plus costs and interests until payment in full. It is so ordered,” the judge ruled.