Taxpayers’ money at risk as lawyers reap billions from government firms

A new report has exposed how lawyers are reaping big from government agencies, sometimes in questionable claims, as state agencies incur billions in avoidable legal costs.

The details emerged just days after the High Court temporarily blocked government agencies from engaging private law firms for work that can be done by state counsels or county attorneys.

The Law Society of Kenya has strongly opposed the court decision.

The reports by Auditor General Nancy Gathungu shows that counties are hiring external law firms – often without proper approvals or competitive procurement – despite having fully established county attorneys’ offices.

The counties are also losing money in unnecessary legal costs due to failure to honour court decrees and contractual obligations.

But the problem of legal fees is not in county governments alone. 

The Independent Electoral and Boundaries Commission has a pending bill of Sh3.8 billion in legal fees.

IEBC chairman Erastus Ethekon has appealed to MPs to intervene.

If the money is paid, many lawyers will be smiling all the way to the bank.

In the 2022 presidential poll petition, the electoral commission hired a record 38 lawyers.

The lawyers were to be paid Sh569.3 million.

The latest reports by the Auditor General reveal a pattern of delayed payments, poor contract management and questionable procurement of legal services in counties.

These inadequacies have exposed counties to penalties, accrued interest and inflated legal fees, leading to avoidable loss of taxpayers’ money running into millions of shillings.

In Bomet county, the auditor found that the government handpicked private law firms to handle 32 out of the 52 cases.

The procurement was not approved by the county executive committee and was not competitively undertaken to ensure value for money.

Instead, the firms were directly instructed by the county attorney.

“In addition, legal cases included 25 cases which had been outstanding for four years awaiting rulings,” the report says.

Gathungu warned that “continued delays in the pending matters may result in escalation and nugatory cost to the management and eventual loss of funds.”

In Busia, the authenticity of Sh9.15 million paid to private law firms was questioned, with the auditor raising concerns that some firms may never have appeared in court on behalf of the county.

“Payment vouchers were not supported with relevant documentation such as initial itemised fee notes, amounts paid to date, evidence of court attendance and case files,” the report says.

The county was also faulted for spending heavily on external lawyers despite having a fully fledged litigation department and for failing to apply the Advocates Remuneration Order of 2014 when determining legal fees.

Embu county paid an advocate Sh2.28 million without proof of work done or approval from the executive committee to outsource legal services.

“In the circumstances, the accuracy and completeness of legal expenditure amounting to Sh2.28 million could not be confirmed,” the report states.

Garissacounty paid Sh57.75 million to various law firms despite the existence of a county attorney’s office mandated to represent the executive and provide legal advice to departments.

Meanwhile, Kericho county overspent on legal services by more than Sh51.71 million, paying Sh61.71 million against a budget of Sh10 million.

The county also overpaid a law firm by Sh1.23 million due to discrepancies between the court decree and the amount paid.

“In the circumstance, public resources were not applied in a prudent and efficient manner,” the auditor said.

Kiambu county accumulated Sh403.43 million in outstanding legal payments arising from contempt of court orders and delayed settlement of decretal sums, leading to accrued interest payable to advocates.

“The expenditure could have been avoided if the county had honoured the claims after the court rulings,” the report says.

“Imprudent decisions by management could have led to judgments entered against the county executive resulting in high costs of litigation and interest.”

An additional Sh50.44 million in legal fees was also flagged for lack of supporting documentation.

In Kilifi, the county paid Sh21.95 million to five law firms without executive approval, even though it had four qualified legal officers who were not deployed.

Kisii county saw a court award increase from Sh5.6 million to Sh7.76 million due to delayed payment, with no evidence that the county explored an appeal.

Kisumu county was compelled to pay more than Sh21 million after delaying payment to a contractor for the construction of a hawkers’ market.

“In the circumstances, high legal fees costs were incurred as a result of poor contract management and conflict resolution by the county executive and value for money may not have been realised,” the auditor said.

The audit further flagged Laikipia county for handpicking eight law firms and paying them Sh24.93 million, while Lamu county was forced to pay an additional Sh1.18 million due to the delayed settlement of a court-ordered payment.

Meru county paid Sh140 million in legal fees and incurred a further Sh40.5 million in legal services that were not disclosed in financial records or budgeted for. “Details of the court cases were not provided with supporting documents such as fee requisitions and taxed amounts,” the report says.

Migori county paid Sh3.97 million in interest on late settlement of decretal amounts, costs the auditor said “could have been avoided had timely settlement of obligations been made.”

In Mombasa, Sh158.16 million in legal fees has remained outstanding for several years, with Sh143.57 million owed to four firms lacking supporting documents.

“Failure to honour court rulings has resulted in accrual of penalties, interest and decretal costs, hence increasing the county’s financial exposure,” the report says.

Nyamira county incurred Sh23.49 million in interest charges after failing to settle a court judgment on time.

“Had the county executive paid the decretal sum in time, the interest charges could have been avoided,” the auditor concluded.