OWINO: Why the LSK is wrong on legal fees
Professional bodies argue that price setting and market division is self-regulation that ensures high standards of service delivery. The Competition Authority is justified to act against cartels in defense of the public interest. A robust discussion is going on today between the Competition Authority on one side and the Law Society of Kenya on the other about the setting of fees for legal services.
In Kenya, most professional societies gain formal recognition from government and use that recognition as a shield for their membership by setting rules regarding fees for each service. Such rules take the form of price floors or the division of markets among members.
They argue that this form of price setting and market division is self-regulation that ensures high standards of service delivery. In the language of dispassionate economic and market analysis, professional bodies that set and enforce prices, divide markets and forestall competition between firms are correctly known as cartels, and the Competition Authority is justified to act against cartels in defense of the public interest.
The essence of the disagreement between the Competition Authority and the Law Society of Kenya (LSK) arises from longstanding authority resident in the Chief Justice to periodically revise and set rates for legal services. With respect to the office of the Chief Justice, this requirement may originate from a statute but effectively makes the office holder a price setter for legal services.
Bearing in mind that the Chief Justice holds qualifications in law and could thus revert to the profession upon retirement, such a decision to adjust fees is unlikely to be completely objective. Citing the provisions in Section 29 (2) of the Competition Act, the Competition Authority correctly and sensibly contends that professional bodies seeking to set prices to guide service provision must seek authorization and exemption.
It is unclear whether the sole purpose of the objection by the Competition Authority in the present matter is to ensure that procedural requirements are adhered to or to object completely to price setting as pleaded by the Law Society of Kenya.... Read the full, comprehensive news article and discuss at The Daily Nation