Blue Inn Limited, R (on the application of) v Secretary of State for the Home Department

In sponsor-licence investigations, suspicion is only the start of the process. The Secretary of State must fairly assess the sponsor’s response before revoking a licence. Where the substance of the case involves dishonesty, deliberate wrongdoing or other reprehensible conduct, that allegation must be clearly put to the sponsor and addressed in the decision. Where a response materially answers an identified concern, fairness may require further targeted inquiries or requests for documents. The degree of inquiry required is fact-sensitive, although the Secretary of State is entitled to proceed swiftly and to maintain a high index of suspicion. A failure to investigate must be assessed in the context of the investigation as a whole. The statutory test under section 31(2A) of the Senior Courts Act 1981 requires an evaluation of whether it was highly likely that the outcome would not have been substantially different.

The claimant, a construction company holding a skilled-worker sponsor licence, challenged the Secretary of State’s decision to revoke that licence on mandatory grounds under the sponsor guidance. The alleged breaches concerned supplying sponsored workers as labour to third parties, assigning a certificate of sponsorship for a non-genuine vacancy, and failing to pay the salary stated on a certificate of sponsorship.

The claimant alleged procedural unfairness, failure to follow the guidance, irrationality and breach of legitimate expectation. The court concentrated on the first three grounds because the parties agreed that they were dispositive. The central issues were whether the Secretary of State had fairly investigated and put the concerns to the claimant, whether further inquiries were required after representations and supporting letters were provided, and whether section 31(2A) of the Senior Courts Act 1981 precluded relief.

1. Outcome. The claim for judicial review was allowed on grounds 1, 2 and 3. The decision of 15 April 2025 was quashed and the Secretary of State was required to remake the decision lawfully and procedurally fairly.
2. Applicable principles. Procedural fairness is contextual. The Secretary of State is the primary fact-finder and is entitled to respect for her experience, a high degree of judgment in applying the guidance, a high index of suspicion and expeditious finality. Nevertheless, each investigation must be sufficiently fair on its facts. The sponsor must show that the procedure actually followed was unfair, and must maintain its records diligently. These principles were drawn from R v Secretary of State for the Home Department, Ex p Doody [1994] 1 AC 531, Bank Mellat v HM Treasury (No 2) [2012] UKSC 39; [2014] AC 700, and R (London St Andrew’s College) v Secretary of State for the Home Department [2018] EWCA Civ 2496.
3. Grounds 1 and 2. The Secretary of State’s conclusions that the claimant was supplying labour and that a worker’s vacancy was not genuine were, in substance, allegations of dishonesty, deliberate wrongdoing or other reprehensible conduct. Under R (Balajigari) v Secretary of State for the Home Department [2019] 1 WLR 4647 and Rex (Prestwick Care Ltd) v Secretary of State for the Home Department; Rex (Supporting Care Ltd) v Secretary of State for the Home Department [2025] EWCA Civ 184; [2025] 1 WLR 4761, the concern had to be clearly stated and the claimant’s response fairly considered. It was not sufficient to disavow dishonesty while relying on reasoning that effectively treated the supporting third-party letters and the worker’s account as false or misleading.
4. The Secretary of State also acted unfairly by rejecting material letters from the claimant’s contractors without requesting the labour-agency agreement or further details of the relevant project. Similarly, after receiving the worker’s letter asserting that his duties matched the certificate of sponsorship, further inquiry, a meeting or a request for documents was required before discounting that account.
5. Ground 3. The salary ground required assessment of the annual salary stated on the certificate of sponsorship over a balanced period. It did not require payment of an identical amount in every week or month. The approach in Treal Care v Secretary of State for the Home Department [2025] EWHC 1797 (Admin); [2025] 4 WLR 89 was applied. Although the failure to make a further inquiry about overtime would not, standing alone, have been irrational, it formed part of the wider procedural unfairness.
6. Applying R (Bradbury) v Brecon Beacons National Park Authority [2025] EWCA Civ 489; [2025] 4 WLR 58, the court could not conclude that it was highly likely that the outcome would not have been substantially different absent the errors. Section 31(2A) therefore did not prevent relief.