The High Court has ruled the Home Office acted unlawfully by seizing mobile phones under the policy, which was brought in after a surge in Channel crossings in 2020.
Asylum seekers were searched and had mobile phones and SIM cards confiscated.
The High Court has ruled that the policy breached the European Convention on Human Rights, opening the door to compensation claims.
32 asylum seekers have so far received payouts totalling £210,800 – the equivalent of £6,587.50 each. A further 41 cases remain unresolved. If they are settled at the same rate, the bill will rise to £480,887.
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According to The Sun, the Home Office has already spent £735,000 contesting the case – and a total of 1,323 people could seek damages, which could bring the total as high as £8 million.
It comes after a judicial review was launched in November 2020 by three asylum seekers, identified only as HM, MA and KH.
The High Court heard that nearly 2,000 phones were taken between April and November 2020 under what was described as a blanket policy.
Until July 2020, all seized devices and SIM cards were subjected to full data downloads. After that date, downloads were limited to cases where a ‘person of interest’ had been identified on a boat.
Judges found that taking their phones interfered with migrants’ rights to family and private life under the ECHR and that phones and PINs were taken ‘without any lawful authority’.
After the case, Daniel Carey, of Deighton Pierce Glynn, said: “Nearly 2,000 phones were taken from migrants in an indiscriminate blanket policy that the High Court has now found to be unlawful on multiple fronts.
“All of this had real impacts on very vulnerable people, who lost touch with their families and couldn’t get their asylum documentation, while the phones languished on a shelf for many months, many which now cannot be returned.”
Alp Mehmet, chairman of Migrationwatch UK, said: “This beggars belief. The taxpayer should not be made to hand over huge sums to people who have made their way here illegally to break into the country.
“If granted permission, they should instead be required to repay the huge costs of maintaining them while their applications are processed.”