Accurate civil penalty notices

The Supreme Court recently heard Akbars Restaurant (Middlesborough) Limited v Secretary of State for the Home Department [2026] UKSC 26, a case about civil penalty notices under the Immigration, Asylum and Nationality Act 2006. Of course, it is important to remember that immigration law and housing law are different creatures save for the very limited scenario in which they overlap, specifically the Right to Rent. However, unsurprisingly, I am intending to show that there is important elements in this case that are relevant to housing law!

Without spending too long on the background of an immigration case, section 15 of the 2006 Act permits the Secretary of State, acting through Home Office officials, to give a notice to an employer setting out that they are an employing someone who is not properly in receipt of a right to work in the UK and imposing a penalty. As with other civil penalty regimes, including the ones that operate in the housing sphere, the recipient can respond to that notice, setting out reasons why they believe it to be incorrect and the Secretary of State then provides a final response. There is then an ability to appeal the penalty if it is maintained, in the case of immigration penalties to the county court. The penalty notice is required to specify the basis on which is being imposed. However, it appears that Home Office officials have been less than diligent in completing these notices and had, at least in this case, failed to specify which part of the range of specific penalties authorised by s15 they are relying on and are simply saying that an employer has employed someone in breach of s15. The Secretary of State had in correspondence amplified the notice by suggesting that she sought to rely on one part of s15 but during the County Court appeal then sought to change the basis of her penalty and to rely on an entirely different basis for giving the penalty then had previously been put to the restauranteur. She argued that as the penalty appeal was a rehearing and the legislation specifically allowed her to rely on evidence which she had not previously been aware of that meant that she could rely on entirely new ground of penalty based on that evidence. The case then worked its way all the way up to the Supreme Court, who decided the Secretary of State was entirely wrong and overturned the penalty.

A key point made by Supreme Court was that a penalty notice is, as the name suggests, penal in nature. That means that when someone is issued with one, they should have a fair opportunity to fully understand what it is they have done wrong and the evidence that is being relied on against them, so that they can make a fair representation to the Secretary of State and a fair appeal, understanding the case that they will have to meet. To use the words of the Supreme Court:

Where the state imposes a penalty of this kind, it is to be expected that proper reasons should be given to explain why it is doing that and to show that its action is justified. The person affected is entitled to know why the penal power of the state has been invoked against them. The giving of reasons also imposes appropriate discipline on the state to ensure that such power is being exercised properly and serves as a practical safeguard against capriciousness.

In other words, a penalty notice has to be clear about why the penalty is being imposed. This is an important point but, to be fair, this is not a problem that I see very often any more in housing matters. Most local authorities are now pretty good about setting out the offence they are penalising and the reason why. But there is certainly a reminder here that it matters.

The second issue was whether the Secretary of State could change the nature of the penalty during the hearing. The Secretary of State asserted that she could on the basis that the court’s consideration of the penalty notice was a rehearing and it was allowed to consider evidence of which the Secretary of State was not aware. For that reason the Court could be asked to find, and could find, that the penalty was valid for totally different reasons than the ones specified on the original notice. The Supreme Court disagreed with this analysis. The statute says that the purpose of the re-hearing is to consider the “decision to impose a penalty”. That means that the court has to be hearing about the decision on the notice, and not some other penalty. The fact that the court can entertain other evidence simply means that the Secretary “may adduce new evidence bearing on the matters actually decided by her … It is not a provision which permits the Secretary of State to change the basic nature of the case against the employer on an appeal.”

It is this second issue which is important. I have seen, on several occasions, the basis of a penalty, and even the nature of the offence being penalised, changed during an FTT appeal. I have seen this happen both at the behest of the local authority and at the volition of the FTT itself. The Supreme Court makes clear that this is absolutely not permissible.

This case is clearly important for Home Office penalties. But given that the wording of civil penalty provisions is pretty much the same across almost all uses of it, including housing law penalties, the views expressed by the Supreme Court in this case are relevant.

David Smith is a partner at Bishop & Sewell.