Stowaway fines for hauliers 'unlawful'

The Government is set to face one of the most embarrassing legal defeats since it came to power when a High Court judge is expected to declare that a central part of its policy to stem the flow of illegal immigrants is unlawful.

Mr Justice Sullivan is thought to have decided that the system of fining lorry drivers £2,000 for each stowaway they carry into the country is in direct contravention of European legislation.

While the Government is likely to ask for a stay of execution pending an appeal, the judge could refuse to do so, setting in train a massive increase in immigration controls at ports – especially Dover – and blowing a gaping hole in the Government's policy.

It is understood that nearly £8m worth of fines have been levied on hauliers after illegal immigrants were found in their vehicles and about £1m on the rail freight company English, Welsh & Scottish. Much of the money has not been paid.

The purpose of the law was to shift the initial responsibility for detecting hidden asylum-seekers from the Govern- ment to private companies and individuals. Claimants hope the judge will order an immediate end to the fines and allow reimbursement of those already paid. Companies and individual lorry drivers are forced to pay £2,000 for each illegal immigrant found.

The Government has invested considerable political capital in the regime of fines, portraying the system as evidence that it was "getting tough" on the issue. However it is thought Mr Justice Sullivan will rule that the Government has infringed both the EC treaty on the free movement of goods and the Human Rights Convention.

The Government's UK Immigration Service argued that the penalty regime was a civil matter, but lawyers for claimants replied that lorry drivers in particular were treated like criminals. The judge was told that many of them were locked up, not informed of their rights and subject to "draconian" penalties.

It is understood that the judge has accepted that criminal law should apply and that the present system is therefore unfair because it does not afford the basic rights that European legislation demands.

The case was brought before the High Court by Zimmer's, a small law firm operating in north London, which represents German haulage firms and individual lorry drivers. It was felt that German firms in particular were unfairly targeted by the authorities.

If the Government has to ensure that the offence is covered by criminal rather than civil law, ministers will have to go back to the statute books, which would have a massive impact on its legislative programme.

More pressing for the Home Secretary, David Blunkett, is the problem of what to do about curbing the flow of illegal asylum-seekers if he is not granted a stay of execution.