KLG Trucking SRL v Secretary of State for the Home Department

An appeal against a penalty under section 32 of the Immigration and Asylum Act 1999 is a rehearing. The court must decide afresh whether to cancel the penalty and, if not, whether to reduce it. Compliance with the Carriers’ Liability Regulations is relevant to a reduction, but does not by itself require cancellation or a penalty below the level indicated by the Penalty Code. An owner or hirer’s record-keeping duty concerns the actions cross-referred to for that person, chiefly pre-journey actions. A failure to record later driver checks does not establish breach of that duty.

The appellant owned a heavy goods vehicle in which eight clandestine entrants were found at Calais. The Secretary of State imposed a £36,000 penalty under section 32 of the Immigration and Asylum Act 1999, alleging breach of regulation 2E(2) of the Carriers’ Liability Regulations 2002. The County Court at Nottingham upheld the penalty, finding that the owner had failed to ensure proper completion of the driver’s checklist.

On appeal, the Secretary of State relied on a different alleged breach, namely failure to record pre-journey checks. The central issues were whether regulation 2E(2) had been breached and what penalty, if any, should be imposed on a rehearing.

1. Appeal allowed in part. The Court of Appeal reduced the penalty from £36,000 to £18,000.
2. An appeal under section 35A of the Immigration and Asylum Act 1999 is a rehearing. The court must first decide whether the penalty should be cancelled in light of the facts found. If cancellation is inappropriate, it must decide whether the penalty should be reduced and, if so, by how much. The court may consider the Penalty Code and any other relevant matter: Link Spolka Z O.O. v Home Secretary [2021] EWCA Civ 1830.
3. Under regulations 2E(2) and 2E(3) of the Carriers’ Liability Regulations 2002, the requirement to make a record as soon as practicable afterwards relates to the relevant action, not to the journey as a whole. The owner or hirer’s obligations under regulation 2E(2) are distinct from the driver’s obligations. Apart from regulation 2C(3), the cross-referred owner or hirer actions were pre-journey actions.
4. The Secretary of State’s penalty notice alleged that the checklist showed no checks within 24 hours of the incident. The evidence did not establish that no record of the pre-journey checks existed. The later change in the Secretary of State’s case was also inconsistent with the statutory requirement to state the reasons for liability. The County Court had therefore proceeded on an erroneous basis.
5. Although the statutory discretion permits cancellation, full compliance with the Regulations does not itself require a penalty to be cancelled or reduced below the Penalty Code’s indication. The statutory scheme and Code treat compliance as a basis for reduction. In so far as Nexways Cargo KFT v Home Secretary (unreported, 15 March 2024) suggested that full compliance ordinarily justified no penalty, it should not be followed.
6. KLG had no previous liability, was a medium-sized business and qualified for the relevant discounts. The appropriate calculation was £6,000 per clandestine entrant, reduced by 25 per cent for its size and by 50 per cent for acting to ensure compliance. The resulting penalty was £18,000.

• Court of Appeal (Civil Division) The appeal was allowed in part and the penalty was reduced to £18,000: [2024] EWCA Civ 737.
• County Court at Nottingham On 8 December 2023, His Honour Judge Jonathan Owen upheld the £36,000 penalty.