Darwins College Ltd v Secretary of State for the Home department

Factual and Procedural Background

The Appellant, the Home Secretary, appealed with permission against a costs order made in favour of the Appellee, Darwins College, following the settlement of a judicial review claim brought by the college. Darwins College, established in 2009 as a higher education institution in The City, primarily enrolled foreign students from countries including Pakistan, India, Bangladesh, China, and Nigeria. The college required and obtained accreditation from the Accreditation Service for International Colleges ("ASIC") and was granted full accreditation in February 2011 with a recommended student intake of 426.

To operate in the UK, the college needed a tier 4 sponsor licence from the United Kingdom Border Agency ("UKBA") to issue Confirmation of Acceptance for Studies ("CAS") to foreign students. Initially, the college held a tier 4 B-grade licence authorising it to issue 100 CASs over six months. In early 2011, the Home Secretary proposed changes to reduce migration and regulate colleges more stringently. On 11 April 2011, the college was notified it would retain its B rating based on an inspection from December 2010, and an action plan was issued requiring policy updates and evidence submission with a next review scheduled for August 2011.

On 19 April 2011, UKBA announced a temporary limit preventing B-rated sponsors, including the college, from issuing any new CASs. The college immediately objected, asserting it had complied with the action plan since December 2010 and requested an urgent inspection to upgrade to A rating, which would allow CAS issuance. Despite repeated requests and pre-action protocol correspondence threatening judicial review, UKBA delayed responding substantively. An unannounced inspection occurred on 19 May 2011, but the outcome was initially unclear.

On 20 May 2011, the college issued judicial review proceedings challenging the 19 April decision prohibiting CAS issuance. The principal legal challenge was that the Home Secretary unlawfully introduced changes to the Immigration Rules within the 40-day parliamentary scrutiny window. Other grounds included alleged disproportionate interference with the college’s possessions under Article 1 of Protocol 1 of the European Convention on Human Rights.

The college sought urgent interim relief, leading to a hearing scheduled for 22 May 2011. However, on 26 May, the Home Secretary informed the college that the 19 May inspection had resulted in the college being upgraded to A-rated status, rendering the judicial review claim academic. The claim was withdrawn by consent, leaving the costs issue to be determined. The lower court ordered the Home Secretary to pay the college’s costs on the standard basis. The Home Secretary appealed this costs order.

Legal Issues Presented

1. Whether the lower court erred in awarding costs to the college following the settlement of the judicial review claim.
2. Whether the concession by the Home Secretary was a genuine concession arising after the issue of proceedings or a separate development independent of the judicial review claim.
3. The appropriate exercise of the court’s discretion regarding costs in judicial review proceedings settled without a contested hearing.

Arguments of the Parties

Appellant's Arguments

• The judge misunderstood the reason why the case settled, wrongly characterising the Home Secretary’s actions as a concession made after proceedings were issued.
• The settlement resulted from an independent process initiated before the judicial review claim, specifically a reinspection requested by the college and conducted prior to the claim’s issuance.
• The decision to upgrade the college's status was based solely on the inspection outcome and was not a tactical retreat due to the legal challenge.
• The judge’s discretionary decision on costs was therefore vitiated by a flawed understanding of the facts.

Appellee's Arguments

• The judge properly understood the facts, including the Home Secretary’s submissions and the timing of the concession.
• Although the Home Secretary did not concede unlawfulness, the failure to comply with the Pre-Action Protocol and the delay justified the college’s judicial review claim and consequent costs award.
• The inspection conducted the day before the claim was issued was very late, with no assurance of a timely decision, making the judicial review application reasonable and necessary.
• The judge’s reference to a concession was apt in the sense that the college achieved the relief sought by the withdrawal of the prohibition on issuing CASs.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the sequence of events and the conduct of the parties with reference to established principles on costs in judicial review proceedings. It noted that the lower court judge based his costs decision on the view that the Home Secretary had made a late concession after proceedings were issued, justifying the award of costs to the college. However, this court found that the judge misunderstood the factual context, as the Home Secretary’s decision to upgrade the college’s rating followed an inspection that occurred before the claim was issued and was not a tactical concession prompted by the litigation.

The court acknowledged that the Home Secretary’s response to the Pre-Action Protocol letters was inadequate in failing to address the complaint of delay or to provide assurances regarding the inspection and decision timeline. Nonetheless, the subsequent inspection and decision to upgrade the college’s status were independent developments that complicated the lower court’s reasoning.

The court also recognised that the college’s decision to issue judicial review proceedings was reasonable given the uncertainty and delay, but it was also reasonable for the college to have sought clarification from UKBA on the timing of the decision following the inspection before issuing proceedings. The court emphasized the importance of clarity and full factual presentation in costs submissions on paper.

Balancing these factors, the court concluded that the lower court’s award of costs to the college was based on a flawed understanding of the facts and that the exercise of discretion should be revisited.

Holding and Implications

The appeal is allowed.

The court set aside the lower court’s order awarding costs to the college and substituted an order of no order as to costs in respect of the proceedings below. This means that each party bears its own costs of the judicial review claim at first instance. The court’s decision reflects the complex factual circumstances and the independent developments preceding the claim, rather than a straightforward concession by the Home Secretary. The appeal costs remain to be addressed separately.

No new precedent was established; the decision applies established principles on costs discretion in judicial review proceedings, underscoring the necessity for accurate factual presentation and careful judicial assessment of conduct and timing of concessions.