R (K and another) v Secretary of State for the Home Department (K & AM)

The claim challenged a Home Office contract change which reduced weekly subsistence paid to certain potential victims of trafficking from £65 to a level aligned with general asylum support (£37.75) from 1 March 2018. The court held the change unlawful because it was implemented outside the strict contractual variation powers, was procedurally flawed, irrational and perverse, and rested on a false basis. The judge also found that the Home Secretary had failed in his statutory duty under section 49 of the Modern Slavery Act 2015 to issue guidance, and that the change involved unjustified discrimination contrary to the European Convention on Human Rights read with Article 1 of Protocol No.1 and engaged Article 4; further the Equality Act 2010 section 149(1) duty had not been discharged.

This is a first-instance judicial review in the Administrative Court concerning support payments made to potential victims of modern slavery under an Adult Victim of Modern Slavery (AVMS) contract administered by the Salvation Army.

Background and nature of application:

• The claimants were recognised by the Home Office as having reasonable grounds to believe they were victims of trafficking and were entitled to statutory National Referral Mechanism support. They sought quashing of the Home Office decision (implemented by a Contract Change Notice) which, from 1 March 2018, reduced the cash subsistence element payable to certain classes of potential victims.
• The primary relief sought was quashing of the March 2018 Contract Change Notice and repayment of the difference up to the contractual £65 weekly rate.

Procedural posture: This was decided at first instance in the Administrative Court before Mr Justice Mostyn.

Key issues framed by the court:

1. Whether the contractual terms entitled certain classes of potential victims (notably those in self-catering accommodation who were asylum-seekers) to a £65 weekly payment, and whether the March 2018 change was a lawful variation under the contract.
2. Whether the decision was irrational, perverse or taken on a false basis and therefore unlawful in public law terms.
3. Whether the Home Office had complied with its statutory duty under section 49 of the Modern Slavery Act 2015 to issue guidance on identification and support of victims.
4. Whether the change involved unjustified discrimination contrary to Article 14 in conjunction with Article 1 of Protocol No.1 (and engagement of Article 4), and whether the Equality Act 2010 section 149(1) public sector equality duty had been complied with.

Court’s reasoning and findings:

• The contract expressly specified subsistence bands and, for victims in self-catering accommodation who were accommodated by the authority (the third class), a top-up to reach £65 (practically a £27.25 top-up to asylum support of £37.75). The judge accepted the plain contractual meaning and rejected the Home Office’s contention that the table reflected a mistake or that the Salvation Army had acted independently to correct an error.
• The unilateral imposition of the March 2018 Contract Change Notice was procedurally non-compliant with the contract’s variation provisions (Schedule 6) and therefore outside the confined power to vary; the change was implemented by the Home Office and not by the contractor autonomously.
• The change was irrational and taken on a false basis; it was part of a policy alignment announced in Parliament and reflected in internal briefing and change notices. The court assessed the meaning of “subsistence” in the Trafficking Directive against the Reception Directive and accepted a broader conception of subsistence for trafficking victims that can justify more than the minimum to avoid destitution.
• The March 2018 change caused discriminatory treatment between like and unlike groups; the discrimination was not shown to be objectively justified and the Home Office had not advanced a reasoned justification in the decision-making record. The Equality Act 2010 public sector equality duty had not been discharged.
• The statutory duty under section 49 of the Modern Slavery Act 2015 to issue guidance had not been complied with despite the section being in force, a failure criticised by the court.

Remedy and consequential orders: The March 2018 Contract Change Notice was quashed, repayment to affected claimants was ordered using the contractual arithmetic (£65 minus weekly asylum support), specific payments to the two claimants were ordered, costs were awarded to the claimants, and the Home Office was required to publicise payments and use reasonable endeavours to contact affected persons.

At first instance the court quashed the Home Office Contract Change Notice of 1 March 2018 and ordered repayments. The judge found the Home Office had no lawful basis to impose the cut: the payment table in the AVMS contract plainly entitled certain classes of potential victims to top-up payments to reach £65, the unilateral change breached contractual variation rules, was irrational and taken on a false basis, involved unjustified discrimination engaging Article 1 of Protocol No.1 (and Article 4) and breached the public sector equality duty in section 149(1) of the Equality Act 2010. The judge also held the Secretary of State had failed to comply with the duty to issue guidance under section 49 of the Modern Slavery Act 2015.