Definition of Loss by the Supreme Court of Uganda. The Court got it Wrong. It’s time to reconsider Kassim v Uganda.

by Administrator · Published February 22, 2022 · Updated September 5, 2023

In Kassim Mpanga v Uganda Cr App 30 of 1994 the Supreme Court at page 17 defined loss as ‘something that reasonable search cannot recover. Something lost for good and not recoverable’.

Whereas the requirement of a reasonable search is prudent, the requirement that the affected person attempts to recover the lost thing is unnecessary. In the first instance there is nothing in the text of section 21 of the Anti-Corruption Act that says that the loss must be permanent. The statute merely refers to ‘financial loss”. The definition of loss by the Supreme Court refers to permanent loss rather than financial loss. Parliament did not intend that the state or any other body should make an often expensive attempt to recover resources that its officers have misappropriated due to their negligence or breach of duty. The fact that a loss can be made good at a particular time does not imply that the loss did not occur. If for example D negligently paid B over and above what was owed to B by D’s employer and after a few days D decides to refund the money to his employer, has there been loss? If D at the start of the trial decided to refund the money that he is alleged to have lost, is he guilty of financial loss. If the third-party on the day of conviction decided to refund the money, would there be financial loss? If the Government is insured and it recovers the misappropriated funds from the insurer has there been financial loss? In reality, any loss can be made good given sufficient resources, preparedness and time. For example banks often insurer against the negligence and fraud of their employees. Does that mean that a bank is incapable of incurring financial loss within the meaning of the Anti-corruption Act? Can it really be true that parliament intended that after an expensive corruption investigation, the suspect can frustrate the prosecution by simply refunding the money that was lost due to his or her actions? If a public officer negligently pays public funds to a third party does the state have an obligation to first exhaust remedies against the third party before it can prosecute the criminally negligent employee? What if there was fraud involved in the transfer, does this make a difference to whether financial loss has occurred or not?

Even if we accept that the state should first take reasonable steps to recover the money from a third party, still the definition by the Supreme Court is flawed because the state has a cause of action against its employee and one of the available avenues to recover the money is by suing the offending employee. Does that mean that prior to charging a public officer for financial loss the state should first take steps to recover the money from the employee? If so, how far does such an obligation extend? Does it extend to the employer exercising its cause of action against the offending employee? Is a demand for refund enough? What happens if insurer indemnifies the employer and the insurer does not bother to enforce its subrogation rights?

Whereas it is preferable that minor lapses during employment do not lead to criminal sanctions, there is an inbuilt safe guard against such lapses leading to criminal sanctions. Criminal negligence requires knowledge of the risk and voluntarily taking that risk as defined in R v Adamako. In such circumstances the offence of financial loss targets those that engage in arbitrary acts. An arbitrary act was defined in Uganda v Atugonza ACD CR CS 37 of 2010, Uganda v Kazinda ACD CR SC 138 of 2012 as ‘An action, decision or rule not seemingly to be based on reason, system or plan and at times seems unfair or break the law’.

On the other hand willfully was defined in Uganda v Hudson Jackson Andrua and Angol Michael High Court Anti-corruption Division Criminal Session Case No. 0054 of 2012 as, ‘deliberately doing something which is wrong knowing it to be wrong or with wreck less indifference as to whether it is wrong or not.’ Minor lapses during the course employment are unlikely to amount to arbitrary acts. Therefore, a person who has caused loss by arbitrary acts has the requisite mensrea to cause that loss. It cannot be true that after the offense is complete, conduct on the employee’s part or when a third party indemnifies the loss that was caused by the public officer, it erases the fact that a crime was committed.

Take the example of attempts, once you have ceased to engage in merely preparatory acts and embarked on committing the crime, no amount of remorse or impossibility of the offense can erase the fact that you attempted to commit a criminal offense. Courts have enforced this rule strictly in attempts why should it be different for financial loss. Once you exceed merely preparatory acts, the offence is complete, there is no going back. In the same way, once you engage in an arbitrary act that causes loss to your employer, the offence is complete whether you turn around and recover the money or whether you are lucky enough that the third party makes good the loss or insurance covers the loss or not. The offence is complete once the money is out of reach of your employer, however temporary or briefly as long as you had the requisite mensrea and the employer was deprived of the funds in issue for any period of time. It does not matter that the employer has other avenues for recovery.

The Supreme Court has the power to depart from its previous decisions. In Attorney General v Uganda Law Society Constitutional Appeal No.1 of 2006 the Supreme Court, Justice Mulenga JSC explained the binding power of precedent as follows.-

“Under the doctrine of stare decisis which is a cardinal rule in our jurisprudence, a court of law is bound to adhere to its previous decision save in exceptional cases where the previous decision is distinguishable or was overruled by a higher court on appeal or was arrived at per incuriam without taking into account a law in force or a binding precedent. In absence of any such exceptional circumstances a panel of an appellate court is bound by previous decisions of other panels of the same court.”

In the circumstances, before the Supreme Court decides to overrule itself on any case, there are several factors that are considered first. These factors include the quality of reasoning, workability of the decision, consistency with related facts, and reliance interests. Our analysis above clearly shows that the decision in Kassim Mpanga v Uganda is unworkable and based on faulty reasoning. It has entrenched Corruption in Uganda and handicapped anti-corruption agencies. The problem is so grave that Anticorruption agencies only bring charges of financial loss where money has been squandered and lost irretrievably yet if charges were brought earlier, it would be easier to recover the proceeds of crime before they are integrated into the financial system. The case illegitimately amends a statute of parliament and breaches the separation of power.