Councils able to charge for enforcing sexual entertainment licences

It is thought likely that the ruling by the Supreme Court in Europe today could extend to other locally set licensing schemes including Pavement Café licences. The ruling is not expected to have much impact on centrally set fees such as premises and personal licences.

The case came as Westminster City Council (WCC) appealed a judgment from the Court of Appeal in May 2013, which supported the view that European law prevented licensing authorities from charging fees going beyond the costs of the authorisation process. 

The original ruling was won by a group sex shop owners in London’s West End who were charged £29,102 for their annual licence from WCC. 

The Supreme Court has now ruled overturned the court of appeal and confirmed that councils can impose a fee which covers the running and enforcement costs of a licensing scheme. 

However, the court has referred to the European Court of Justice for whether a charge should be made to applicants which covers the cost for administering and enforcing the licensing regime, at the time when an application is made, as opposed to when it is granted. 

It is quite common for local authorities to ask for payment upfront for licence applications and if the licence is not granted it will return part of the payment.

Jonathan Smith, managing partner at Poppleston Allen, said: “The Supreme Court has decided that charging applicants whose licence is granted for the costs of administering and enforcing the licensing regime is lawful, and consistent with the European Directive, but referred to the European Court of Justice the question of whether a charge (including the cost of enforcement) should be made on application, because by so charging it could dissuade persons from applying".

Association of Licensed Multiple Retailers chief executive Kate Nicholls agreed that there will be a limited impact on alcohol licensing but agreed that Sexual Entertainment Licensing and outside table and chairs would be affected.

She said it would take between a year and 18 months before the ECJ would rule on whether full fees can be charged up front.