Justus Mutiga & 2 others v Law Society of Kenya & another [2018] KECA 338 (KLR)
The bottom line
#Kenya's Court of Appeal struck down the insurer-backed cap on road accident compensation, confirming courts alone decide what accident victims are awarded.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the schedule applies pre-judgment and compromises judicial authority
- 2.Whether the limitation of the amounts recoverable under the schedule is justified
- 3.Whether the learned Judge misapprehended and misapplied the purpose and intention of the schedule
Key legal issues
#Whether the Structured Compensation schedule applies pre-judgment and compromises judicial authority
The schedule applies post-judgment, since section 10 of the Principal Act presupposes claims based on court judgments. However, because assessment of damages is a judicial function that cannot be delegated, the schedule cannot be incorporated into any judgment without rendering it null and void; the High Court's declaration of unconstitutionality of sections 3(a) and 6 was upheld.
The court held that a judgment exists only upon delivery, so the schedule operates post-judgment, contrary to the High Court's reasoning on that point. But computation of damages after pronouncement is a judicial function which cannot even be delegated to the Registrar. Any post-judgment interference with the judgment by anyone purporting to calculate percentages would render the judgment a nullity. The schedule therefore has no place in the Principal Act and is unconstitutional, vindicating the result reached by the High Court.
Whether the limitation of the amounts recoverable under the schedule is justified
The limitation is unjustified. No evidence was adduced to prove justification; the cap leaves innocent third parties to recover the excess personally from insureds, defeating the objective of compulsory third party insurance.
The appellant argued the schedule balanced the interests of insurers, insureds and claimants and addressed insurer insolvency, drawing parallels with the Workmen's Compensation Act and Work Injury Benefits Act. The court found those statutes had not been raised at trial, and the evidence showed insolvency stemmed from many causes beyond compensation levels. Limiting compensation payable by the underwriter who received premiums, against an innocent third party armed with a court judgment, offends the very essence of insurance.
Whether the learned Judge misapprehended the purpose and intention of the schedule
No. The court found no reason to interfere with the reasoned judgment of the High Court and dismissed the appeal.
The appellant contended the schedule provided an expeditious, cost-effective settlement mechanism and streamlined the industry. The court accepted that section 5(b) caps only recovery from the insurer, not the court's award, agreeing with the judge that section 5(b) is constitutional. But the schedule itself could not stand, as it compromises judicial authority post-judgment. On the whole the appeal was devoid of merit.
Legal principles established
#- The Structured Compensation schedule introduced under section 6 of the Insurance (Motor Vehicle Third Party Risks) (Amendment) Act, 2013 applies post-judgment, but any post-judgment computation of damages awarded by a court is a judicial function that cannot be delegated; the schedule cannot be incorporated into any judgment without rendering it null and void.
- Computation of monies awarded as damages is a judicial function which cannot be performed by the Registrar of the court or delegated; a judgment left incomplete for assessment is a nullity.
- The cap under section 5(b) of the Insurance (Motor Vehicle Third Party Risks) Act limits only the amount recoverable from the insurer and does not fetter the court's discretion to award more, so section 5(b) is constitutional.
- A decision only becomes a judgment upon delivery, and not before.
Court orders
#- 1.The appeal is dismissed
- 2.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- Constitutional Petition No. 148 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 29(a) of the Court of Appeal Rules; constitutional petition appeal from the High Court
Relief refused
#The appellant's appeal seeking to set aside the High Court's declaration that sections 3(a) and 6 of the Insurance (Motor Vehicle Third Party Risks) (Amendment) Act 2013 and the Structured Compensation schedule are unconstitutional
The schedule cannot be applied to any court judgment without rendering the judgment a nullity; the limitation on compensation was unjustified and unsupported by evidence
Costs
No order as to costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
On the whole therefore, we find no reason to interfere with the reasoned judgment of the High Court. Our conclusion is that this appeal is devoid of merit, and the same is hereby dismissed with no order as to costs.
It is clear therefore that the schedule cannot be incorporated into any judgment without affecting the validity of the judgment, and in effect impugning the authority of the court.
Both the award and level or quantum of damages is in our view judicial functions which the superior court cannot rightfully delegate
What in our considered view is anticipated by the amendment is to put a ceiling or cap to the amount recoverable from the insurance company, but it does not fetter the court from awarding more than Ksh.3 million.
We therefore agree with the learned Judge that Sections 3(a) of the Insurance (Motor Vehicle Third Party Risks (Amendment) Act, 2013 is null and void and so is section 6 which sought to introduce the impugned schedule.
Issues in the judgment
#Internal inconsistency: the judgment states the schedule applies post-judgment (contrary to the High Court's reasoning) yet upholds the High Court's declaration that the schedule compromises judicial authority, on the separate ground that post-judgment computation of damages is a non-delegable judicial function.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Justus Mutiga & 2 others v Law Society of Kenya & another [2018] KECA 338 (KLR)", Case Analysis (2018). Civil Appeal No. 141 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/338/eng@2018-04-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.