Fees regulations for 600,000+ licences are unlawful, says top QC

Fees regulations governing premises licences, personal licences and club premises certificates are unlawful, a leading licensing QC has argued.

Philip Kolvin QC of Cornerstone Barristers said this week that the issue potentially affects the fees for more than 600,000 licences in England and Wales.

Kolvin argues in a new book – Licensed Premises: Law, Practice and Policy published by Bloomsbury Professional – that while the Licensing Act 2003 (Fees) Regulations 2005 were lawful when they were published in 2005, they became unlawful when new European laws came into force in 2009.

The QC’s comments come after the Court of Appeal ruling in May 2013 in the case of R (Hemming & Others) v Westminster City Council.

The court held that licensing authorities cannot charge licensees more than the costs of the authorisation procedures themselves.

According to Kolvin, the 2005 regulations “also fall foul of that rule, even though the fees in the regulations were set by central government rather than local licensing authorities”.

The Court of Appeal found in Hemming that while the costs of the authorisation process, including monitoring compliance of operators, were fairly part of the fee, the costs of enforcement against third party operators were not.

The case – which centred on the charges levied on sex shop owners in the West End for their annual licence – has left Westminster City Council facing a payout of up to £2m. Kolvin appeared for the shop owner claimants.

The case centred on a change in European law through Article 13.2 of the Services Directive (2006/123), which specified that charges which applicants may incur from their application shall be reasonable and proportionate to the costs of the authorisation procedures and shall not exceed the cost of the procedures.

The directive was transposed into UK law by the Provision of Services Regulations 2009, regulation 18(4).

Kolvin claims in his book that the judgment in Hemming has a far wider effect than the repayment Westminster will have to make, because it affects fees for much bigger licensing regimes, including the Licensing Act 2003, which deals with the entire alcohol and entertainment industry.

Under that regime, fees are centrally set by Government, but the QC points out that the Government is bound by the same rule as local authorities.

In his book, Kolvin says: “Thus, it is submitted that fees under the Fees Regulations have to be recalculated so as to remove the element of enforcement from their calculation.”