Two separate decisions of the Administrative Court earlier this month concerning revocations and suspensions of Tier 4 sponsor licences by the UKBA have developed further the evolving body of caselaw in that important area of compliance.

The first case involved a judicial review challenge brought by Lords College of Higher Education concerning the UKBA's suspension and ultimate revocation of its B-rated sponsor status.  The Court decided that the UKBA's decision to suspend the licence had been lawful, because Lords College had been in breach of its Tier 4 sponsor obligations.  However, the Court went on to find that the ultimate revocation of the licence on discretionary grounds under the UKBA's Tier 4 guidance had not been a reasonable response.  The Court found that the UKBA had failed to take into account in reaching that decision relevant mitigating factors in favour of the College, such as the College's recent establishment; that there had been no complaint before suspension; that there was a future action plan in place; that a number of grounds for suspension had not been justified; and the seriousness of harm of revocation.  As such, the Court concluded that the revocation was unlawful.

The second decision involved a challenge by Warnborough College Ltd regarding the UKBA's refusal of its application for Highly Trusted Sponsor status ("HTS") under Tier 4 of the points based system.   The decision of the Court is not an outcome of the case itself, but relates only at this stage to the granting of permission for the College to proceed to a substantive hearing of the merits of the judicial review claim.  However, the judgment is of interest as it appears to signal a change of approach taken by the Courts to date - and indeed His Honour Judge Anthony Thornton QC certified that his judgment could be cited in other cases given "the importance and topicality of this decision". 

Briefly, Warnborough College's application for HTS was refused by the UKBA in November 2012 on the grounds that the College's refusal rate (ie the percentage of refusals by the UKBA of visa applications made by students to whom the College had issued Confirmations of Acceptance for Studies) was greater than 20% - a mandatory requirement under the Tier 4 sponsor guidance. In the court proceedings, the College contended that the 20% refusal rate test was premised on the College having responsibility for all refusals, irrespective of the reason for those refusals and there is no discretion for the UKBA to take into account reasons outside of the control of the Tier 4 institution.

In granting permission for the judicial review claim to proceed, the Court confirmed it considered the College had reasonable prospects of success in connection with the 20% refusal rate being a mandatory and fixed percentage, despite UKBA submissions that the requirement had been upheld by the courts in other cases.

Included in the challenges advanced by the College is a ground that the Tier 4 sponsor guidance on which the UKBA relied in reaching its decision to refuse the HTS application was unlawful, as it was not laid before Parliament for approval.  This is an argument which has been raised by other institutions in previous challenges of UKBA decisions.  As the law stands, there is authority from the Court of Appeal in the case of New London College v SSHD that the system of licensing of sponsors is not required to be laid before Parliament under the Immigration Act 1971 to be enforceable.  However, the Court recognised in the Warnborough College case that the Supreme Court is due to hand down its decision in New London College's final appeal in that case following a hearing earlier this month.  We will be tracking that outcome given the potential significance and will post an update here as soon it the Supreme Court decision becomes available.