Licence Revocation of Capital Care Service (UK) Limited - | Hudson McKenzie


Licence Revocation of Capital Care Service (UK) Limited

September 13, 2012 | News

In a recent ruling by the Court of Appeal delivered by Laws LJ, it has been held that the Secretary of State for the Home Department was entitled to revoke a Sponsor Licence granted to Capital Care Services (UK) Limited in circumstances where it was mistakenly granted in the first place and was subject to withdrawal at any time. In the circumstances, Capital Care did not have a legitimate expectation that the licence would last for the full four-year term.


Capital Care was granted a Tier 2 Sponsor Licence in error in January 2009. The letter granting the licence expressly stated that it would be valid for four years unless it was withdrawn before then. The Tier 2 sponsor guidance states that employment agencies are not entitled to a sponsor licence as they do not have control of the worker’s job or function. Sponsors were obliged to ensure that they fulfilled the duties set out in the Guidance. The licence was subsequently revoked in July 2011 on the basis that the business model operated by Capital Care was contrary to the requirements of the sponsorship licence scheme as set out in the Guidance. This was because under the contractual arrangements between Capital Care and the NHS, which it supplied with workers, Capital Care was acting as an employment agency and did not retain full responsibility for the workers’ duties and functions.

Capital Care, the appellant, sought permission to challenge the decision made by the respondent to revoke its licence to operate as a sponsor of migrant workers under Tier 2 of points-based system. The challenge was brought on the grounds that it had a legitimate expectation of four years’ use of the licence and that it had suffered a loss as a result. Furthermore, the decision was so unfair as to amount to an abuse of power.

The High Court and Court of Appeal refused permission to apply for judicial review on the basis that the licence should not have been granted in the first place and that the UKBA made it clear that the four years’ duration was not guaranteed. Capital Care could not prove loss and there was an overriding public interest in the protection of immigration control.

Legitimate expectation

In considering whether Capital Care could rely on a substantive legitimate expectation, the Court of Appeal noted that it was acknowledged that the licence had been granted in error. Capital Care’s claim was therefore based on the withdrawal of a benefit which it had obtained as the result of a mistake.

The Court of Appeal followed the case of R v Secretary of State for Education and Employment ex parte Begbie (“Begbie”). In Begbie, it was held that where the court was satisfied that a mistake had been made by a public authority, the court should be slow to fix the public authority permanently with the consequences of that mistake.

R (on the application of Capital Care Services (UK) Limited) v Secretary of State for the Home Department [2012] EWCA Civ 1151; R v Department for Education and Employment ex parte Begbie [2000] 1 WLR 1115.

For further information on the above please get in touch with Rahul Batra, Director and Head of Department at or call on +44 (0)20 3553 7711.