New London College Ltd, R (on the application of) v Secretary of State for the Home Department

The general powers in the Immigration Act 1971 authorise a system for licensing student sponsors. The criteria governing the grant, suspension and withdrawal of sponsor licences may be contained in policy guidance. They are distinct from the substantive criteria governing a migrant’s entitlement to enter or remain, which must be placed in Immigration Rules subject to parliamentary scrutiny.

A non-transferable sponsor licence without market value is not itself a possession protected by article 1 of the First Protocol. Its suspension or withdrawal engages that article only if it adversely affects an existing possession, such as the capitalised goodwill of the business. Loss of expected income from future students is insufficient. Where article 6 applies, administrative decision-making under the sponsor guidance, combined with conventional judicial review, can provide a fair determination.

The appellant further-education college held a Tier 4 student sponsor licence, enabling it to issue confirmations of acceptance for studies to non-EEA students. The United Kingdom Border Agency suspended the licence and later decided to withdraw it because of concerns about attendance monitoring, immigration-status checks, student recruitment and record-keeping.

Wyn Williams J, in [2011] EWHC 856 (Admin), held that the initial suspension was unlawful but that the continued suspension and withdrawal were lawful. He also held that the licensing decisions engaged article 1 of the First Protocol, although only the unlawful period of suspension infringed that article.

The college appealed on the legality of placing sponsor-licensing criteria in guidance, compliance with article 6, and the reasonableness of the decisions. The Secretary of State cross-appealed on whether article 1 of the First Protocol was engaged.

1. The college’s appeal was dismissed and the Secretary of State’s cross-appeal was allowed. Richards LJ delivered the judgment, with which Rimer and Mummery LJJ agreed.

2. Sections 1 and 3 of the Immigration Act 1971 were sufficiently wide to authorise the sponsor-licensing system. The Immigration Rules assumed the existence of that system, but the power to operate it derived from the Act’s general powers rather than from specific authorisation in the Rules.

3. The ratio of Pankina v Secretary of State for the Home Department [2011] QB 376 concerned substantive criteria governing entitlement to enter or remain. Such criteria must be contained in Immigration Rules laid before Parliament and cannot be qualified by changeable guidance. Sponsor-licensing criteria were materially different. They affected a student’s practical ability to satisfy the Rules only indirectly and did not alter the content of the substantive criteria. The criteria for granting, suspending and withdrawing sponsor licences could therefore lawfully remain in guidance.

4. Assuming without deciding that article 6 applied, the licensing process in the guidance, together with judicial review on conventional grounds, afforded a fair determination. Sponsor licences did no more than confer a right to issue a confirmation of acceptance recognised for immigration purposes. Article 6 did not require a full merits appeal.

5. The judge had carefully assessed the attendance, immigration-status, recruitment and record-keeping concerns. He was entitled to consider the reasons cumulatively. The Court of Appeal adopted his conclusion that maintaining the suspension and withdrawing the licence were rational and lawful. The original procedural unfairness had been cured, and it was fair to assess the continuing suspension under the guidance in force at that time.

6. A sponsor licence was neither marketable nor transferable and was not obtained at a market price. It was therefore not itself a possession for article 1 of the First Protocol. The licence also did not restrict the college’s freedom to provide education. The evidence showed economic disruption and potential loss of future income, but did not establish an adverse effect on the capitalised goodwill of the business. Article 1 of the First Protocol was consequently not engaged.

• Court of Appeal (Civil Division): The college’s appeal was dismissed and the Secretary of State’s cross-appeal was allowed in [2012] EWCA Civ 51. The finding that article 1 of the First Protocol was engaged was reversed.
• High Court, Administrative Court: Wyn Williams J held in [2011] EWHC 856 (Admin) that the initial suspension was unlawful, but that the continued suspension and withdrawal were lawful. He held that article 1 of the First Protocol was engaged and that the initial unlawful suspension infringed it.