In most commercial suits the losing party is ordered to pay the winner’s costs, but not automatically at the amount the advocate has charged. The court taxes a bill against a prescribed scale, and the amount recovered is usually lower than the client’s own legal costs. Understanding the difference helps litigants budget realistically and decide whether a claim is worth pursuing. This article explains how party-and-party costs work in Kenya.
Quick answer
Party-and-party costs are the costs the losing party pays to the winner. They are assessed by taxation against the Advocates Remuneration Order, which prescribes how fees and disbursements are calculated. The winner files a bill of costs before the Deputy Registrar, the taxing officer assesses it and issues a certificate, and the certified amount can then be enforced. A client usually remains liable for the balance of its own advocate’s fees.
Party-and-party costs and client costs
Client costs are what an advocate charges the client under the retainer agreed between them. Party-and-party costs are what the court orders the unsuccessful party to pay towards the winner’s costs. The two figures are calculated on different bases, and party-and-party costs are generally the lower.
That gap is the practical point. A litigant who wins a case may still recover only part of its legal spend, and a modest claim that runs to a contested hearing can consume the amount in dispute. The arithmetic should be considered before filing, not after the judgment.
The framework: statute, rules and the Remuneration Order
Costs in civil proceedings are governed by the Civil Procedure Act and the rules made under it. The general rule is that costs follow the event: the successful party is ordinarily entitled to costs, subject to the court’s discretion. The court may order otherwise where the circumstances justify it, for example where a party has succeeded on only part of its case or has behaved unreasonably.
The Advocates Act and the Advocates Remuneration Order made under it provide the scale for computing fees. The Order deals with matters such as instruction fees, routine items, disbursements and the basis on which a charge may be increased or reduced. The Law Society of Kenya publishes material on the Remuneration Order, and the Order itself should be checked for the current schedule.
The taxation procedure, step by step
- The court orders costs, either in the judgment or by a separate ruling.
- The winning party files a bill of costs setting out the items claimed and the amounts.
- The bill is lodged with the Deputy Registrar or the taxing officer designated by the court.
- The parties are notified and given an opportunity to be heard on disputed items.
- The taxing officer assesses the items against the scale and issues a certificate of taxed costs.
- The certificate is enforced in the same way as any other decree, or set off where appropriate.
Taxation is an evidential process. Supporting documents, attendance notes and invoices for disbursements should be available, and the party disputing an item should identify the basis of the objection rather than expressing general dissatisfaction. The taxing officer may reduce items that are unreasonable, excessive or unsupported, but the exercise is an assessment of costs, not a re-hearing of the case.
What a bill of costs contains
| Element | What it covers |
|---|---|
| Instruction fee | The core fee for taking instructions and prosecuting or defending the matter |
| Court attendance | Appearances before the registrar, judge or in chambers |
| Pleadings and process | Drafting, filing and service of documents |
| Disbursements | Filing fees, service fees, travel and other outlays supported by receipts |
| Getting up | Preparation for hearing and related work |
Challenging a taxation decision
A party aggrieved by the taxing officer’s decision may challenge it through the procedure set out in the Advocates Remuneration Order, which includes a reference to a judge. The challenge should identify specific items or errors of principle rather than reopening the whole bill. A general submission that the figure is too high is unlikely to succeed on its own.
Time limits apply to references and objections, so the dates should be diarised as soon as the ruling is delivered. The procedure and the applicable periods should be checked against the current Order and the rules.
Costs in arbitration and settlement
In arbitration, costs are usually dealt with in the award, and the tribunal has power to allocate them between the parties, often reflecting the outcome and the conduct of the proceedings. Institutional rules may add administrative fees and tribunal fees on top of the parties’ own costs. A settlement can allocate costs between the parties in whatever way they agree, which gives them more control than a contested ruling.
The article on security for costs and abuse of process explains the protection available where recovery of costs is doubtful, and the article on limitation periods for commercial claims explains why timing should be confirmed before a claim is filed.
Budgeting and when to take advice
Build a budget that assumes party-and-party recovery will cover only part of the legal spend, and include the cost of enforcement. The budget should separate fees, disbursements and enforcement costs, and be reviewed at each stage of the case as the scope of work becomes clearer. Where the amount in dispute is modest relative to the likely cost of a contested hearing, settlement or a cheaper process may be the better commercial decision. The firm’s commercial litigation practice advises on costs strategy and taxation.
Advice is worth taking where the costs order is substantial, where the bill is disputed, where a reference is being considered, or where the financial position of the paying party is uncertain.
Primary sources
- Advocates Act, Kenya Law, for the statutory basis of the Advocates Remuneration Order.
- Civil Procedure Act, Kenya Law, for the rules on costs in civil proceedings.
- Law Society of Kenya, for material on the Advocates Remuneration Order.
This article is general information, not legal advice.