The Court of Appeal has held that the Home Secretary wrongly found that the owner of a heavy good vehicle was not eligible for a reduction in the penalty applied to it following one of its drivers arriving in the UK with clandestine entrants. The case is KLG Trucking SRL v Secretary of State for the Home Department [2024] EWCA Civ 737.

On 21 February 2023 a heavy goods vehicle left Bologna, Italy and on 23 February 2023 when it reached the UK, the vehicle was searched and eight people were found trying to enter the UK without permission. Penalties were issued under section 32 of the Immigration and Asylum Act 1999 to the driver and also to KLG, the owner of the vehicle.

The driver’s penalty was initially £48,000 but this was later reduced to £36 per person, totalling £288 because of his financial circumstances. KLG’s penalty was £36,000 (£4,500 per person) based on it being a medium business with no record of liability in the previous five years.

The penalty notice said that KLG was in breach of regulation 2E(2) of the Carriers’ Liability Regulations 2002 which deals with record keeping, on the basis that the checklist provided by the driver showed no checks in the 24 hours before the people were discovered in the lorry. The effect of that breach was that KLG was not eligible for a reduction in the amount of the penalty, under regulation 3A.

Both penalties were appealed, the driver’s appeal was dropped after it was discovered that the checklist provided by the driver to KLG recording the stops on their journey was different to the incomplete checklist that Border Force had been shown. KLG’s appeal was dismissed by the County Court in Nottingham on 8 December 2023 which upheld the penalty as being £36,000.

In the Court of Appeal hearing, the Home Secretary’s position changed to a claim that there had been no adequate record of pre-journey checks (instead of the 24 hour period before discovery of the people). This position was not supported by the evidence [at 41] and so the Court of Appeal held that the County Court judge had been mistaken in concluding that that KLG had breached regulation 2E(2).

The Court of Appeal referred to the penalty code at 45:

The Penalty Code explains that, where the person has no record of liability in the previous five years (as with KLG), the figure of £6,000 per clandestine entrant is to be used as the starting point. The Penalty Code further provides for a reduction of 25% in the case of a “medium” company such as KLG. There is provision, too, for certain discounts. That of relevance in the present case states that a 50% discount will be applied to the starting point level of penalty “if the responsible person is not the driver and was not present during the vehicle or detached trailer’s journey to the United Kingdom, but they acted to ensure compliance with the Regulations”. Had KLG breached regulation 2E(2) of the 2002 Regulations, as the Judge thought, KLG would not have qualified for this discount. On the basis, however, that it did not do so, it does.

Following this, the court reduced the penalty to £18,000.