Westminster council legal judgment could limit scope of licensing fees

That’s the view of licensing barrister Philip Kolvin QC who acted on behalf of the group of sex shop owners that won the case in the Court of Appeal after a three-year campaign to reduce its licence fees.

Since 2005, Westminster City Council charged sex shop owners in London’s West End £29,102 for their annual licence. In 2009, new European laws came into force in the UK preventing licensing authorities from charging fees going beyond the actual costs of the authorisation process.

The shop owners claimed that at most 10% of the fee was justified – the remainder being spent by the council on prosecuting unlicensed operators, which, it was argued, could not be charged back to the licensees.

In May 2012 the claim was upheld in the High Court, but Westminster City Council appealed to the Court of Appeal, arguing that their charges were not affected by the new laws.

Today, three judges of the Court of Appeal dismissed the Council’s appeal.

Kolvin said: “The effect of the judgment is that Westminster City Council will have to repay the great majority of fees charged since the beginning of 2010.

“Also, the council has been ordered to pay interest at 10% above the Bank of England Base Rate and “indemnity costs” because it rejected an offer to compromise the claim on much better terms at the start of the proceedings.

“Westminster City Council was also ordered to recalculate fees going back to 2004 because of deficiencies in its procedures for determining fees. The cost to the Council of the award, the interest and costs is likely to approach £2m.”

He added: “The judgment has important consequences for the funding of regulation in the United Kingdom because the new laws apply to all forms of authorisation to provide service activities. These include all forms of licensing (except for gambling and taxis which are excluded), street trading, subscriptions payable by professions including the legal professions in order to be able to practice and even the fees for planning applications.

“Most importantly, the judgment will limit the scope of fees which licensing authorities will be able to charge under the Licensing Act 2003, following the right to determine fees introduced by the Police Reform and Social Responsibility Act 2011. The Home Office has delayed introducing Regulations implementing the legislation, it is thought in order to enable it to consider the Hemming judgment.”