London College Of Management Ltd v Secretary of State for the Home Department

A sponsor-licensing authority may adopt a mandatory refusal-rate threshold for highly trusted sponsor status. Where the governing guidance calculates the rate by reference to applications supported by a Confirmation of Acceptance for Studies, the relevant pool comprises applications that have been determined, not applications that remain outstanding.

A fixed threshold need not ordinarily be supplemented by an examination of the reasons for each refusal. Fairness may require exceptions in appropriate cases, but a policy is not unlawfully inflexible merely because it is applied as a bright-line criterion where the decision-maker has considered the circumstances sufficiently.

A sponsor must report every sponsored student who fails to enrol within the enrolment period. The duty is not limited to students known to have obtained entry clearance.

The claimant, a private college holding a Tier 4 sponsor licence, challenged the refusal of its application for highly trusted sponsor status. The application was refused because its refusal rate exceeded 20 per cent and because it had failed to report 19 students who did not enrol.

The claimant also challenged earlier suspension and revocation decisions, but those challenges had become academic after the licence was reinstated. The court considered the proper construction of the September 2011 Tier 4 guidance, the fairness of applying its refusal-rate criterion, the scope of the reporting duty, and the consequential revocation of the existing licence.

1. Refusal-rate calculation. The September 2011 guidance required consideration of all CASs used by students to support applications during the relevant 12-month period. Properly construed, a CAS was counted only where the student's application had been determined. Including undetermined applications would produce a misleading measure of the sponsor's practices. The Secretary of State was therefore entitled to calculate the rate using the smaller pool, with refusals exceeding 20 per cent ([2012] EWHC 1029 (Admin), paras 28–31).
2. Fairness and policy discretion. The Secretary of State was entitled to adopt a mandatory 20 per cent threshold. The criterion was intended to operate as a bright-line policy and would be undermined if individual refusals routinely required detailed investigation. There could be exceptional cases requiring an exception, but this was not such a case. Discounting refusals made while the claimant's licence was revoked showed that the policy had not been applied mechanically or unlawfully so as to fetter discretion (paras 32–40).
3. Reporting duties. The guidance required sponsors to report a student who did not enrol within the enrolment period. The obligation was clear and applied whether or not the student had obtained entry clearance. Limiting it to students known to have obtained entry clearance would make the duty depend on information the sponsor might not possess and would undermine the reporting scheme (paras 41–49).
4. Licence revocation and order. The challenge to revocation of the existing licence under paragraph 277 of the September 2011 guidance was abandoned. The revocation followed from refusal of highly trusted sponsor status and was lawful. The judicial review claim was dismissed. The claimant was ordered to pay the defendant's costs, to be assessed if not agreed (paras 50–51, 60, 65).

The judgment records that permission for judicial review was granted on the papers. The challenges to the earlier suspension and revocation decisions became academic after the licence was reinstated. Permission was later granted to amend the grounds to challenge the refusal of highly trusted sponsor status. The Administrative Court dismissed the claim.