International Transport Roth GmbH v Secretary of State for the Home Department

A statutory civil-penalty scheme may nevertheless attract the criminal protections of Article 6 where, in substance, it targets culpable conduct and imposes severe punitive penalties. A fixed and cumulative penalty, imposed without an independent tribunal able to assess culpability and mitigation, may render a scheme unfair.

Measures to control illegal immigration may pursue a compelling public objective, but they must not impose an excessive individual burden. The combined effects of a reverse onus, inflexible penalties and vehicle detention made the scheme incompatible with Article 6 and Article 1 of the First Protocol. Human Rights Act 1998, section 3, could not be used to redesign the scheme. Its indirect commercial effects did not, however, amount to restrictions under Articles 28 or 49 of the EC Treaty.

Hauliers, drivers and vehicle owners challenged the penalty regime in Part II of the Immigration and Asylum Act 1999. The regime imposed a penalty of £2,000 for each clandestine entrant found concealed in a vehicle. It allowed detention of the vehicle before payment where there was a significant risk of non-payment.

The Administrative Court (Sullivan J) declared the scheme incompatible with Article 6 and Article 1 of the First Protocol to the Convention, and inconsistent with Articles 28 and 49 of the EC Treaty. The Secretary of State appealed.

The central questions were whether the scheme was unfair or disproportionate under the Convention, whether section 3 permitted a compatible construction, and whether its effects on haulage constituted an unlawful restriction on cross-border trade or services.

1. By a majority of Simon Brown and Jonathan Parker LJJ, the appeal was allowed only in relation to Community law. The declarations concerning Articles 28 and 49 of the EC Treaty were set aside. The declarations of incompatibility under the Convention were upheld.

2. The majority treated the scheme as criminal in substance for Article 6 purposes. Although labelled civil domestically, it was directed at dishonest or careless carriage of clandestine entrants and imposed severe, fixed and cumulative financial penalties. Simon Brown LJ regarded the absence of any individualised assessment of penalty and mitigation as the principal Article 6 defect. Jonathan Parker LJ additionally considered that the reverse burden and detention regime were disproportionate.

3. The statutory scheme, taken as a whole, was unfair. A carrier could bear substantial liability and suffer detention of the vehicle despite limited culpability, without flexibility for mitigation or co-operation. The measures consequently failed to strike the fair balance required by Article 1 of the First Protocol and imposed an excessive burden on affected carriers.

4. Section 3 of the Human Rights Act 1998 could not cure those defects by interpretation. A compatible result would require a radically different scheme, which was a matter for Parliament.

5. The scheme was not a restriction on imports or the freedom to provide services. Its effects on trade were indirect and tenuous, and did not impair the substance of the Treaty rights.

Laws LJ dissented. He regarded the scheme as civil, considered that judicial review and the available court procedures supplied adequate protection, and would have allowed the appeal in full.

• Court of Appeal: In [2002] EWCA Civ 158, the Secretary of State's appeal was allowed only to set aside the Community-law declarations. The Convention declarations were maintained.

• Administrative Court: Sullivan J upheld the challenge. He declared the scheme incompatible with Article 6 and Article 1 of the First Protocol, pursuant to section 4 of the Human Rights Act 1998, and inconsistent with Articles 28 and 49 of the EC Treaty.