Nairobi City County paid Sh30m to law firm in matatu case

Nairobi City County Government paid a law firm Sh30 million for a case that was settled out of court, a committee has established.

The county assembly's Public Accounts Committee (PAC) questioned how the legal firm revised the fee note from Sh92 million to Sh30 million.

It emerged Monday the county engaged the private firm, despite having its own legal team to deal with the case and high chances of resolving the matter outside the corridors of justice.

The Nairobi County legal team had been summoned by PAC in Nairobi to answer to queries of irregular legal fees payment for the 2013-2014 financial year.

Nairobi County Legal Services Department Director General Karisa Iha said they opted to hire a private firm to deal with a case involving 26 matatu operators, who had filed a petition seeking that the court permanently restrained the county from charging seasonal parking levies or daily parking fees in excess of Sh140, because the department was overwhelmed with other county cases.

"The matatu owners were opposed to the increment in parking fees from Sh200 to Sh400 per day for PSVs and Sh140 to Sh300 per day for private cars, brought about in the Nairobi City County Finance Act 2013," said Mr Iha.

Committee members, however, raised issue with the move to hire a private firm to represent the county whereas there was a designated legal team, claiming they had lost a majority of cases.

PAC Chairman Robert Mbatia questioned how the legal department had paid Sh30 million to the private firm despite the minimum sum payable under the Advocates Remuneration Order being Sh58 million.

But the director general defended the move to contract Ojienda & Company Advocates, citing that the payment to the firm was authentic and the adjustment of the fee note from Sh92million to Sh30 million was justifiable, as it was the product of mutual negotiations between the parties.

He added that had the matatu operators succeeded with the petition, the loss the county would suffer would be Sh1.9 billion per year for the next five years, by which point it would have accrued to Sh9.5 billion.

"In estimates of revenue and expenditure for the 2013-2014 financial year, the county anticipated collections of Sh1.9 billion.

Instruction fees to an advocate are based on the value of the subject matter. The subject matter here is the loss the county would have suffered if the court ruled against it. In this case the subject matter was Sh9.5 billion," said Iha.