Law and ethics: foundations

Last updated November 20265 sectionsabout 28 min read

This chapter sets out what law is, where Kenyan law comes from, and the ethical standards that sit alongside it. A candidate who is comfortable with these foundations can reason about any later chapter, since every commercial rule that follows is either a source of law in its own right or an application of one of the sources introduced here.

The nature and sources of law

Key terms

Law is by nature:

• Coercive: backed by state sanction.
• Normative: it prescribes how people ought to behave.
• General: it applies to classes of persons, not named individuals.

Its purpose is to maintain order, resolve disputes peacefully, protect rights and property, and provide a predictable framework within which business and social life can be conducted.

What jurists have said law is

There is no single agreed definition of law, and the disagreement is not idle: what you think law is decides whether an unjust rule counts as law at all. Four schools of jurisprudence recur in examination questions, and each is best remembered by the one question it answers.

Kenya's own legal order borrows from all four:

• The Constitution's Bill of Rights reflects natural law thinking.
• The Judicature Act's ordered list of sources is positivist in structure.
• The recognition of African customary law is the historical school in practice.
• The repugnancy proviso attached to that recognition is a sociological judgment about consequences.

Purposes of law, and law versus morality

The nature of law and its purpose are examined together, and the purposes are best learned as a list because marks are awarded per point.

• Maintaining order and preventing the resolution of disputes by force
• Resolving disputes through an impartial and predictable process
• Protecting persons, property and legally recognised rights
• Regulating relationships, whether commercial, family or between citizen and state
• Setting and enforcing minimum standards of conduct, for example in employment and consumer safety
• Facilitating private arrangements by making contracts, companies and wills legally effective
• Distributing public resources and burdens, through taxation and public spending
• Effecting social change by prohibiting conduct that was previously tolerated

Law and morality overlap but are not the same, and the examiner wants the difference stated precisely. Law is made or recognised by the state and enforced by the courts; morality arises from conscience, religion and social convention and is enforced by disapproval alone. Law regulates outward conduct; morality reaches motive and thought. Law applies to everyone in the jurisdiction; a moral code binds only those who accept it.

The two diverge in both directions, and a good answer gives an example each way. Conduct can be immoral yet perfectly lawful, such as breaking a promise that was never a contract, or exploiting a bargain that a desperate seller regrets. Conduct can be unlawful yet morally neutral or even praiseworthy, such as parking on a yellow line to carry an injured person to hospital. Where the two coincide, as with theft and violence, compliance is high because two pressures point the same way.

The rule of law

The rule of law means that everyone, including the government, is subject to law that is known, certain and applied by independent courts. Article 10 of the Constitution lists it among the national values binding every state organ and every person interpreting the law. Its practical content is that:

• No one may be punished except for a breach of law established in the ordinary courts
• Everyone is equal before the law whatever their office
• Rights are protected by an independent judiciary

Candidates are regularly asked what undermines it, and the list is worth memorising:

• Wide discretionary powers exercised without published criteria
• Immunities and privileges attaching to office
• Retrospective legislation
• Delegated legislation that escapes scrutiny
• Ouster clauses that bar the courts
• Executive interference with judicial appointments or tenure
• States of emergency prolonged beyond need
• Ignorance of the law among those it governs
• The practical cost of litigation, which puts remedies beyond most people's reach

Classification of law

A single rule of law can usually be placed in several of the following classes at once.

Two further distinctions recur across the syllabus: the nature of law as a system of binding, state-sanctioned rules; and its purpose, which is to order society, settle disputes, and protect rights, distinct from law and morality, where a rule can be widely regarded as morally right without ever being legally enforceable, and legally binding without being universally seen as moral.

Of all these classifications, the one that earns the most marks and is most often muddled is criminal against civil. The same incident can generate both: a driver who injures a pedestrian may be prosecuted for careless driving and sued in negligence, and the two proceedings are independent of each other. An acquittal in the criminal court does not defeat the civil claim, because the standard of proof is lower there.

Sources of law

Section 3 of the Judicature Act sets out, in order of authority, where Kenyan law is drawn from.

The order is not decorative. It is a hierarchy, and a source lower down applies only so far as the sources above it do not cover the question. Section 3(1) directs every court, from the Supreme Court down to the subordinate courts, to exercise jurisdiction in conformity with:

1. The Constitution first
2. Then, subject to that, all other written law
3. Then, so far as written law does not extend or apply, the substance of the common law, the doctrines of equity and the statutes of general application in force in England on 12 August 1897, together with the procedure and practice of the English courts at that date

Two details in that provision are routinely misremembered and are worth fixing now. The reception date is 12 August 1897, not any later date, so an English statute passed after it is not received into Kenyan law by this route at all. And the reception is expressly qualified: the proviso applies the common law, equity and those statutes only so far as the circumstances of Kenya and its inhabitants permit, and subject to such qualifications as those circumstances render necessary. Kenyan courts are therefore free to decline an English rule that does not fit local conditions.

African customary law and the repugnancy proviso

Section 3(2) of the Judicature Act treats customary law differently from every other source. It says the courts shall be guided by African customary law in civil cases in which one or more of the parties is subject to it or affected by it, so far as it is applicable and is not repugnant to justice and morality or inconsistent with any written law. Three limits are packed into that sentence, and an answer that misses them loses marks.

• It guides rather than binds, so a court is not compelled to apply it as it would a statute
• It reaches civil cases only, never criminal ones
• It applies only where a party is subject to or affected by that customary law
• It yields to any written law it is inconsistent with
• It yields where it is repugnant to justice and morality, the repugnancy proviso

The repugnancy proviso is where the marks are. It gives a court the power to refuse a custom that is otherwise properly proved, and since 2010 it has been reinforced by the Constitution: Article 2(4) voids any law, including customary law, that is inconsistent with the Constitution, and the equality guarantee makes a discriminatory custom vulnerable.

Equity and its maxims

Equity developed in England because the common law had become rigid: it recognised a narrow set of claim forms, and its only real remedy was damages. Petitioners who fell outside those forms appealed to the Chancellor, and the body of discretionary principles he built became equity. It supplements the common law rather than replacing it, and where the two conflict, equity prevails.

Equity's contribution is best seen in what it invented: the trust, the equitable remedies of injunction, specific performance, rescission and rectification, and the equity of redemption that stops a lender keeping mortgaged property outright. Its discretionary character is expressed in maxims, which examiners like because they can be listed.

• Equity will not suffer a wrong to be without a remedy
• He who comes to equity must come with clean hands
• He who seeks equity must do equity
• Delay defeats equity, so a stale claim may be barred by laches
• Equity looks to the intent rather than the form
• Equity regards as done that which ought to be done
• Equality is equity
• Equity acts in personam, against the conscience of the defendant

Judicial precedent in practice

Precedent, or stare decisis, is listed as a source, but it works differently from the others: it is a doctrine about how the other sources are applied. The binding part of a judgment is the ratio decidendi, the legal reason necessary to the decision on those facts. Everything else is obiter dictum, said in passing, which may persuade a later court but cannot bind it. Separating the two on a set of facts is the skill the doctrine demands.

A precedent binds only a court below the one that gave it, and only where the material facts are the same. A decision of a foreign court, of a court of equal rank, or a dissenting judgment, is persuasive only. The current Kenyan hierarchy is the Supreme Court, then the Court of Appeal, then the High Court and the courts of equal status, then the subordinate courts, and each binds those beneath it.

A court is not trapped by every earlier decision. It may:

• Distinguish the precedent, showing the material facts differ
• Follow a higher court's later ruling that overrules it
• Decline a decision given per incuriam, in ignorance of a relevant statute or binding authority
• Treat it as superseded where the statute it interpreted has since been amended or repealed

The Court of Appeal for East Africa accepted in Dodhia's case in 1970 that a final appellate court, while treating its own previous decisions as binding, should be free to depart from them whenever it appears right to do so, and that flexibility is now part of how Kenya's own final court works.

The doctrine is defended:

• For the certainty and predictability it gives
• For treating like cases alike
• For the richness of detail that accumulated decisions provide
• For the convenience of a judge who need not reason from first principles

It is criticised:

• For rigidity where a bad decision persists
• For the sheer bulk of reported cases
• For the artificiality of some distinctions drawn to escape an unwelcome precedent
• For leaving law-making in the hands of unelected judges

General rules of international law: Article 2(5) of the Constitution makes the general rules of international law part of the law of Kenya, and Article 2(6) does the same for any treaty or convention Kenya has ratified, so international obligations can be a direct source of domestic law without a separate implementing Act.

Administrative law

Natural justice: two rules bind every decision-maker exercising a power that affects a person's rights:

• Audi alteram partem (hear the other side, a fair hearing before an adverse decision)
• Nemo judex in causa sua (no one may be a judge in their own cause, the rule against bias)

The cases in this chapter are genuine, reported authorities, whether Kenyan or English decisions received into Kenyan law; none is invented for illustration.

Constitutional concepts: the 2010 Constitution is built on a small set of recurring ideas that appear throughout this paper:

• The supremacy of the Constitution
• The sovereignty of the people
• The rule of law
• A Bill of Rights binding all state organs
• Devolution of power to 47 county governments

Doctrine of separation of powers and independence of the judiciary: state power is divided between the Legislature (Parliament, which makes law), the Executive (which implements it) and the Judiciary (which interprets and applies it), each checking the others so that no single arm accumulates unchecked power. Article 160 of the Constitution guarantees that the Judiciary is subject only to the Constitution and the law, and not to the control of any person or authority.

Judicial control of the Executive: the High Court's supervisory jurisdiction (Article 165(6)-(7)) lets it review an administrative decision by judicial review, ordinarily seeking an order of certiorari (to quash a decision), prohibition (to stop a threatened one) or mandamus (to compel a public duty), on the grounds of illegality, irrationality or procedural unfairness.

Judicial review examines how a decision was reached, not whether it was the best decision. The court does not substitute its own view for the decision-maker's, and an applicant who argues only that the decision was wrong will fail. The three classic grounds are worth stating in the examiner's own vocabulary.

Natural justice deserves its own emphasis because it is examined more than any other part of this section. Audi alteram partem requires that a person be told the case against them, given a genuine opportunity to answer it, and have that answer considered before an adverse decision is made. Nemo judex in causa sua disqualifies a decision-maker with a personal, financial or other interest in the outcome, and the test is not whether the decision was in fact biased but whether a fair-minded observer would see a real likelihood of bias. Appearance is enough, because public confidence is what the rule protects.

Foundations of ethics

Ethics is the study of what conduct is right or wrong, and, for a business professional, of the standards a profession expects its members to meet over and above what the general law requires.

Alternative dispute resolution

Litigation is slow, public, expensive and adversarial, and it usually ends the commercial relationship along with the dispute. Alternative dispute resolution exists because for most business disagreements those four costs outweigh the benefit of a judgment. Article 159(2)(c) of the Constitution obliges the courts themselves to promote reconciliation, mediation, arbitration and traditional dispute resolution mechanisms, so ADR is not a sideline to the justice system but part of it.

The mechanisms form a ladder from least to most formal, and the rung is chosen by how much control the parties are willing to give up:

1. In negotiation they keep all of it.
2. In mediation they keep the decision but accept help reaching it.
3. In arbitration they surrender the decision to a person they chose.
4. In litigation they surrender it to a judge they did not choose.

Arbitration is the most legally structured of the four. It rests on an arbitration agreement, usually a clause in the parties' own contract, and is governed by the Arbitration Act, 1995. The award is final and binding, the grounds for challenging it in the High Court are narrow and procedural rather than a rehearing on the merits, and once recognised the award is enforceable as if it were a decree of the court. That combination of privacy, finality and enforceability is why commercial contracts so often contain an arbitration clause.

Ethics, law and regulation

Emerging issues and trends