Private hospitals have lost a fresh legal battle to stop county governments from imposing single business permit fees, after the High Court found that the dispute had already been settled in an earlier case nearly nine years ago.

Justice Roselyne Aburili dismissed a petition by the Rural Private Hospitals Association of Kenya (RUPHA) which sought to stop all 47 county governments from imposing what it described as double levies on private medical facilities already licensed by national regulatory bodies.

High Court judge Roselyne Aburili.

Photo credit: File | Nation Media Group

RUPHA also sought declarations that the permits were unconstitutional and that professional practice by its members was exclusively regulated by national medical regulatory bodies.

However, the court ruled that RUPHA lacked legal capacity to sue in its registered name and that its challenge was barred because the same dispute had previously been determined in a 2017 case lodged by Kenya Pharmaceutical Association.

“Allowing different associations to file successive petitions on behalf of the same broad sector creates an endless cycle of litigation and goes contrary to the principle of finality of litigation,” the court said.

RUPHA filed the petition on April 29, 2021, challenging single business permits demanded from private medical facilities across Kenya.

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The association, registered under the Societies Act, represents privately owned medical centres, outpatient clinics, nursing homes and hospitals.

It argued that its members are already regulated nationally under medical, clinical officers and nursing laws. It said the healthcare professionals are governed under various specific national legislation, including the Medical Practitioners and Dentists Act, the Clinical Officers (Training, Registration and Licensing) Act, the Nurses Act.

RUPHA said national councils, like the Kenya Medical Practitioners and Dentists Council, the Clinical Officers Council, and the Nursing Council of Kenya, inspect the health facilities, register practitioners and issue annual licences after collecting prescribed fees.

It therefore asked the court to declare county business permits illegal and unconstitutional and permanently prohibit counties from imposing them or other levies on its members.

It also argued that the permits amounted to double taxation and intruded into national professional regulation.

Several counties rejected that position, saying the permits concern commercial premises and trade rather than professional practice.

They relied on the Constitution’s allocation of trade licensing to county governments and their power to raise revenue through charges.

Kilifi County argued that its Finance Act authorized permits for private healthcare facilities and that counties regulate trade, not professions.

The counties also said RUPHA made broad claims without identifying specific Finance Act provisions being challenged.

The court, however, first found that RUPHA was an unincorporated society and therefore had no separate corporate identity allowing it to sue in its own name.

“Since the Petitioner is not a legal entity, it may bring an action, courtesy of Articles 22 and 258 of the Constitution, but with the express authority of its members,” said Justice Aburili.

The court then considered whether the dispute was res judicata, meaning a matter already finally determined by a competent court.

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Justice Aburili traced the dispute to a 2017 petition by the Kenya Pharmaceutical Association against Nairobi and 46 other counties. That case also challenged single business permits, arguing that pharmacists were already regulated nationally and that county charges amounted to double taxation.

The 2017 petition was dismissed after the court ruled that county permits applied to trading establishments and did not amount to double taxation.

Justice Aburili found that RUPHA’s case raised “the exact same county revenue mechanism” and the same trade-versus-profession and double-taxation questions.

“A party cannot evade res judicata simply by substituting one registered society or association with another,” she said.

She added that allowing different associations to repeatedly litigate the same dispute would create “an endless cycle of litigation”.

The court said affected parties could have joined the earlier case or appealed instead of filing another petition.

It said reopening the case would consume county resources and judicial time and risk conflicting decisions.

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jwangui@ke.nationmedia.com