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Licence fees regulations unlawful, says Philip Kolvin QC of Cornerstone Barristers

Licence fees regulations unlawful, says Philip Kolvin QC of Cornerstone Barristers

In a new textbook published earlier this month, leading licensing barrister Philip Kolvin QC of Cornerstone Barristers states that the fees regulations governing premises licences, personal licences and club premises certificates are unlawful.

This potentially affects the fees for over 600,000 licences in England and Wales.

In Licensed Premises: Law, Practice and Policy published by Bloomsbury Professional, Kolvin states that while the fees regulations were lawful when they were published in 2005, they became unlawful when new European laws came into force in 2009. This has come to light because of a landmark ruling from the Court of Appeal in May 2013, which dealt with the proper approach to licence fees. The Court of Appeal held that licensing authorities cannot charge licensees more than the costs of the authorisation procedures themselves. But, says 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 Licensing Act 2003 (Fees) Regulations 2005 set fees for all types of licence. The Government explained in documents accompanying the regulations that they were set at a level to enable recovery of the full costs of administration, inspection and enforcement. In his book, Kolvin explains that this was lawful at the time.

However, European law, which had to be implemented in the UK by the end of December 2009, prevented the recovery of enforcement costs through the licensing process. The purpose of the law was to promote the service economy throughout Europe by removal of administrative barriers.

The new laws were used by a group of Soho sex shop operators who fought all the way to the Court of Appeal to obtain refunds of sex licensing fees from Westminster City Council, which had set their annual fee at over £29,000. On 24th May 2013, the Court, led by the Master of the Rolls Lord Dyson, held 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 was not. This led to an order that Westminster City Council repay fees, which could cost the Council up to £2 million.

However, Kolvin writes that the judgment has a far wider effect, 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 Kolvin explains that the Government is bound by the same rule as local authorities.

Philip Kolvin’s book states: “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.”

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