Supreme Court to hear landmark licensing fees battle next week
The Supreme Court will next week hear a case with major implications for local authorities and other regulators' ability to charge fees for licences.
The case of R (on the application of Hemming (t/a Simply Pleasure Ltd) and others) v Westminster City Council is listed to be heard on 13 January. It is a one-day hearing.
The central issue is whether Westminster’s scheme of charging fees for licensing sex shops in Soho, including those operated by the respondents, is permitted by Directive 2006/123/EC on Services in the Internal Market, as implemented by The Provision of Services Regulations 2009.
The council is allowed to determine a fee to charge the respondents for applying for or renewing a licence, but had not properly determined one since year ending 2004.
Westminster’s fee also included a portion directed to the enforcement of the licensing regime against unlicensed shops, including since the Provision of Services Regulations 2009 came into force.
In the High Court the judge at first instance, Mr Justice Keith, held in May 2012 that the fee had been levied unlawfully:
- every year since 2004 because it had not been properly determined; and
- since the end of 2009 in addition because the Regulations read with the Services Directive they implemented made it unlawful to charge for enforcing the scheme against unlicensed operators.
Mr Justice Keith ordered the council to pay back the excess over what it could lawfully have charged.
The council’s appeal to the Court of Appeal was dismissed in May 2013 except so far as the amount it had to repay was concerned. The ruling was still said to have left Westminster with a £2m bill. The authority appealed to the Supreme Court.
Philip Kolvin QC of Cornerstone Barristers, the shop owners’ counsel, subsequently argued that the ruling affected the fees for more than 600,000 licences in England and Wales.
Fees regulations governing premises licences, personal licences and club premises certificates were unlawful, Kolvin claimed in a book.
The Local Government Association has made a joint submission along with other intervenors including the Law Society and the Farriers Council.
To prepare for the case, the LGA conducted a survey of local authorities on licence fee-setting as part of preparations for the Supreme Court hearing in Hemming.
The research looked at a range of schemes on the basis that the Hemming case was not limited simply to fee regimes covered by the Services Directive.
In a bulletin Cllr Tony Page, LGA Licensing Champion, said: “We believe this case could have significant, and worrying, consequences for council licence fee-setting if the judgement was that expenditure on compliance and enforcement cannot be included.
“Indeed, we know that many councils have already received letters from businesses seeking the reimbursement of fees they have paid previously.”
In the summer of 2014 the LGA advised councils to refrain from issuing refunds until the Supreme Court has decided the case.
