KENYA Law and Practice Contributed by: Ahmednasir Abdullahi, Asli Osman, Peter Muchoki and Elizabeth Wangui Mungai, Ahmednasir Abdullahi Advocates LLP
2.4 Minimum and Maximum Amounts of Third-Party Funding See 2.1 Third-Party Litigation Funding . 2.5 Types of Costs Considered Under Third- Party Funding See 2.1 Third-Party Litigation Funding . 2.6 Contingency Fees Advocates are not permitted to charge contingency fees. The law on this point is set out in Section 46 (c) of the Advocates Act (Cap. 16), which expressly pro- hibits an advocate from entering into any agreement to prosecute or defend a case on terms that payment will only be made if the case succeeds. Any arrangement tying an advocate’s remuneration directly to the success of litigation is void and unen- forceable. 2.7 Time Limit for Obtaining Third-Party Funding See 2.1 Third-Party Litigation Funding . Ideally, there are no court-imposed rules governing pre-action conduct. However, there are clear expecta- tions and statutory requirements that guide how par- ties should conduct themselves before filing a suit. Ordinarily, it is standard practice for a claimant to issue a formal demand letter, particularly in commer- cial and debt recovery matters. This is to provide the prospective defendant an opportunity to respond or settle the dispute at the earliest possible stage, ensur- ing that litigation is used only as a last resort. While failure to issue a demand letter does not auto- matically bar the claimant from instituting proceed- ings, it may prevent the claimant from recovering costs against the defendant, even if the claim is ulti- mately successful. 3. Initiating a Lawsuit 3.1 Rules on Pre-Action Conduct
Foreign advocates must be instructed by, and appear in court with, a qualified Kenyan advocate. Further- more, they are not entitled to sign or file any court pleadings themselves and must pay a prescribed admission fee to the Registrar before they can prac- tise.
2. Litigation Funding 2.1 Third-Party Litigation Funding
Kenya does not have an express legal framework regulating third-party funding, nor is there a specific statutory prohibition against it. Historically, Kenyan courts have been guided by the common law doc- trines of maintenance and champerty which barred third parties with no legitimate interest in a dispute from funding litigation. Given the current global trends, it is arguable that Kenya is ready to embrace the recognition of third- party litigation funding. Law makers should consider amending the existing legal framework to expressly allow third-party funding while also introducing clear statutory provisions outlining the mandatory require- ments for such arrangement to be valid and enforce- able. The proposed mandatory requirements for enforce- able third-party funding arrangements in Kenya could include the following. • The funding arrangement must be in writing. • The funder must be a person or entity as set out in law. • The sum payable by the litigant should consist of the actual costs incurred in the proceedings along with an agreed return to the funder that must be reasonable. 2.2 Third-Party Funding: Lawsuits See 2.1 Third-Party Litigation Funding . 2.3 Third-Party Funding for Plaintiff and Defendant See 2.1 Third-Party Litigation Funding .
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