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The government has been losing a lot of money because of consent judgments made by Local Government councils with third parties without the consent of the Attorney General.

However, this has now been put to an end because the High Court has declared illegal all agreements entered into by Local Government councils with third parties resulting in consent judgments against the Government without the consent of the Attorney General.

In a landmark ruling dated May 3, 2024, High Court Judge Farouq Lubega based at Mbale High Court has ruled that Local Government councils must first seek approval or clearance from the Attorney General before entering into any agreement of any form. If not the same are illegal.

Justifying his decision, Lubega noted that although local government councils are body corporations that can independently manage their affairs, they are part of the central government performing delegated functions since their responsibilities and powers are devolved and transferred from the central government to the people at different levels.

Arriving at the decision, Lubega relied on the Regulation 2(1) and (3) of the Local Government (requirements for seeking technical and legal advice) regulations of 2007 that provides that a person holding a political or public office at a district or lower local government council shall before directing or concurring in use of public funds or property whenever giving effect to the direction that is likely to result in a decision being challenged in court or loss of public funds seek technical or legal advice from the Attorney General.

According to Article 119 (3) of the Constitution, the Attorney General is the principal legal advisor of the Government, and Article 115 (5) of the Constitution states that no agreement, contract, treaty, convention, or document of whatever name to which the Government is a party or in respect of which the Government has an interest shall be concluded without the legal advice from the Attorney General except in such cases and subject to conditions as Parliament by law prescribe. 

The ruling stems from the case in which Mbale district local government sued Samuel Wegoye advocates for setting aside the consent agreement dated April 12, 2023, for payment of shillings 382 million to the law firm in legal fees on grounds that its services were procured without complying with the law.

In his affidavit in support of the application, Martin Max Mukula, the chief administrative officer of Mbale district now the city contended that the actual amount of legal fees was shillings 275 million as against shillings 382 million which the law firm claimed.

The law firm had been put on retainer to handle cases to which Mbale district local government was a party.

Setting aside the consent agreement, Lubega says it was illegal to have been entered into without the consent or approval of the Attorney General.

He cited the 2022 High Court decision in the case of Byenkya-Kihiika and Company advocates versus Gang Min in which it was held that any agreement between a lawyer and his or her client that does not conform to the provisions of section 51(1) of the Advocates Act are not enforceable.

“In the instant case, the officers of the applicant executed the consent agreement which gave rise to the consent judgment without the approval or clearance of the Attorney General.  Therefore, they had no legal mandate to do so and the consent agreement/ judgment they entered was illegal and it is accordingly set aside,” Lubega ruled.

While a consent agreement under the law binds the parties to it, the judge said there was a mistake regarding the actual amount of money in legal fees owed to the law firm.

In her affidavit, Diana Nsubuga from Samuel Wegoye advocates argued that the law firm was entitled to the money having represented the Mbale Local Government in courts of law between April 2015 to May 2022.

Joshua Serugendo from the Attorney General’s chambers who handled the matter welcomed the decision saying accounting officers of Local Governments should take note that they are not allowed to enter into consent agreements/ judgments without the consent of the Attorney General even though local government councils are separate legal entities with capacity to sue or be sued. 

“The ratio decidendi (reason) of this decision is that Local Government councils are not free to enter into consent judgments and if the Attorney General objects, the court will set aside the consent judgments and take into consideration the constitutional limitations on financial spending before the entity is compelled to pay,” Serugendo explained.

Following his appointment as Attorney General, Kiryowa Kiwanuka has instituted a strict approval process of payments for Local Governments, and consent judgments that do not have his approval are being challenged in court and so far, the government has been saved from payment of about shillings 1.2 trillion.

In July last year, the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) requested the Inspectorate of Government (IG) to investigate Charles Ouma, the former deputy director in charge of litigation at Kampala Capital City Authority (KCCA) and ex-director for human resource Richard Lule on allegations of signing a consent judgment that resulted in payment of shillings 3.7 billion in wages to individuals that had never worked for KCCA.

However, some local government officials argue that they have been compelled to hire private lawyers because of the limited number of state attorneys from Attorney General chambers to represent them in courts of law.