Implications of the Westminster sex shop licensing ruling

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A recent ruling ordering Westminster City Council to repay more than £1m in fees collected from sex shops in the borough may have major implications for licensing authorities across the country. This is due to the court’s decision that the council breached the Provision of Services Regulations, which were brought into UK law by the European Services Directive 206/123/EC on 28 December 2009.

Under the Local Government Act 1982, councils were able to charge a reasonable fee for granting operating licences to sex establishments. This fee could include reasonable costs for investigating and processing each licence application, as well as any costs incurred for enforcing the licensing system (including monitoring the compliance of licensed operators and the prosecution of unlicensed operators).

Regulation 18(4) of the 2009 regulations states that ‘any charges provided for by a competent authority that applicants may incur under an authorisation scheme must be reasonable and proportionate to the cost of the procedures and formalities under the scheme and must not exceed the cost of those procedures and formalities’…

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