Hemming v Westminster City Council

It’s been widely reported that WCC has failed in its appeal to get the decision about sex establishment fees reversed. This means that fees for SEVs must be proportionate and reasonable. This could have important implications across England and Wales given the fees set can often appear to be set so as to discourage applications rather than to reflect the volume of work an SEV application might entail. Other councils with high fees (e.g. Greenwich’s fees are more than £20,000) will no doubt be considering revising fee levels in due course, while some licensees may be seeking refunds on fees in the light of this judgement.

This summary is taken from Poppleston Allen solicitor’s website:

Westminster Sex Shops had been successful in their High Court action against Westminster City Council (the Council) when they challenged the level of fees set by the Council and its failure to take account of a new European directive. Since January 2010 the cost of investigating and prosecuting persons, firms and companies who operate sex establishments illegally could not be included in the determination by a Council of its fee structure.

The Council appealed the Decision of the High Court and the Appeal Court Judges have agreed that fees charged by the Council were incorrectly calculated after the beginning of 2010 when the European directive took effect. The directive essentially states that charges incurred by applicants under an authorisation scheme must be proportionate and reasonable in the circumstances to the fees or costs payable under the provisions of the scheme. The fees must not exceed the costs of the procedures and formalities (effectively the costs to administer the process).

The costs of paying for enforcement of the unlicensed operators were therefore incorrectly factored into the overall costs of the scheme.

In monetary terms, the licensing fee (set in 2003) amounted to £29,102 of which £26,435 was refunded if the application for the venue was unsuccessful. It is the part of that latter figure which was levied for enforcing the unlicensed operators which falls foul of the directive.

Whilst there was a reduction in fees in 2012/2013 to reflect the diminishing level of unlicensed operators, a thorough examination of the fee structure imposed a systemic failure to account for the changed nature of the law following the coming into force of the directive in December 2009.

The Council could have accepted an offer to compromise the venues’ claims but did not. The Judges however, determined that the Appeal of the Council should be allowed in part indicating that they should be entitled to recalculate the sums due by reference to directions identified in the Judgment.

The judgment is wide ranging and requires the Authority to accurately reflect the administration of the process for licensing or any other provision if the payments relate to authorisation to provide service facilities.

See also:

http://www.independent.co.uk/news/uk/home-news/sex-shop-chain-in-soho-wins-landmark-legal-battle-against-westminster-council-over-license-fees-8631557.html

http://www.morningadvertiser.co.uk/General-News/Westminster-council-legal-judgment-could-limit-scope-of-licensing-fees

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