Licensing authorities will be able to continue charging for the cost of enforcement but may have to change how they do it, following a ruling by the Supreme Court.
The case, involving Westminster City Council and sex shop owner Timothy Hemming, had threatened to prevent councils charging anything more than the cost of processing a licensing application. This prevented the council from charging legal shops to pay
for the cost of closing unlicensed premises that are nothing to do with the fee paying shops.
In May 2013 the Court of Appeal ruled in favour of Hemming who had successfully argued that charging for the cost of enforcement was inconsistent with European law.
However, Westminster appealed and a Supreme Court ruling handed down this morning overturned this decision. The judgment said:
There is no reason why [a licensing fee] should not be set at a level enabling the authority to recover from licensed operators the full cost of running and enforcing the licensing scheme, including the costs of enforcement and proceedings against those
operating sex establishments without licences.
The court said its decision followed interventions from interested parties including the Treasury, the Local Government Association and the Law Society.
Hemming had also argued that it was not legitimate for Westminster to charge the full cost of licence on application, which was £29,435 in 2011-12, even though the bulk of this fee, £26,435, was refundable if the application was unsuccessful. The Supreme
Court did not rule on this point but has referred the matter to the European Court of Justice in Luxembourg. It is not likely to rule for at least a year.