Suspension and withdrawal of sponsor licences

February 7th, 2012

In R (on the application of New London College Ltd) v Secretary of State for the Home Department [2012] EWCA Civ 51 the Court of Appeal has considered the suspension and withdrawal of a Tier 4 General (Student) Sponsor Licence issued by the United Kingdom Border Agency (UKBA).  The College provides FE courses.  It held such a Licence.  That enabled it to issue a visa letter or a confirmation of acceptance of studies (CAS) to non-EEA students who wished to study in the UK.

The College mounted three challenges to the decisions to suspend and then withdraw its Licence.  First, it argued that the system of sponsor licensing, pursuant to which the decisions were taken, is unlawful, because it is contained in Policy Guidance, and not in the Immigration Rules themselves.  This challenge failed.   It is only the substantive criteria for entitlement for leave to enter and remain that must be in the Rules laid before Parliament under the Immigration Act 1971.

Second, the College argued that the lack of a right of appeal to an independent body is in breach of ECHR Article 6.  This challenge failed.  The availability of judicial review is sufficient.

Third, the College argued that the suspension and withdrawal of a Licence engaged ECHR Article 1 of the First Protocol.  This challenge failed.  A Sponsor Licence is not a “possession”, an interference with the peaceful enjoyment of which has to be justified as being proportionate.  It is not marketable or even transferable.  Nor is it obtained at a market price.  There was not an adverse effect on goodwill, in the sense of the capitalised value of the business as a going concern.  The Licence does not touch on the freedom of the College to provide courses of education to students. What it does is to confer the right to issue a CAS which will be recognized by UKBA and will contribute to a student’s ability to meet the substantive criteria for leave to enter or remain under the Immigration Rules.  Richards LJ said, at para 97: “That certainly enables the sponsor to attract non-EEA nationals wishing to apply for leave to enter or remain as students, and the loss of that ability through suspension or withdrawal of the licence, with a consequential loss of income from that source, is clearly a serious matter.  But it is far from clear that the expected income stream from such students can be capitalised as part of the value of the business, in particular because it depends on a licence that is non-transferable and has no market value in itself: in order to maintain the income stream, a purchaser of the business would have to obtain a licence of its own.  (I accept that if the business is run in such a way that the current owner qualifies for a licence, it will facilitate the obtaining of a licence by the new owner; but on that basis it is the underlying state of the business that matters and the existing licence of itself has no substantive significance.)”

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