Licence fees regulations are unlawful, says leading licensing barrister

His comments follow a ground-breaking case last month at the Court of Appeal which saw a group of sex shop owners successfully argue that they were being unfairly charged for enforcement fees, on top of administrative fees.

In his book, Licensed Premises: Law, Practice and Policy, Kolvin argues that the fees regulations governing premises licences, personal licences and club premises certificates are unlawful. Kolvin claims that 600,000 licences, including 50,000 pubs in England and Wales are paying unlawful fees.

He said that while the fees regulations were lawful when published in 2005, they became unlawful when new European laws — The Services Directive — came into force in 2009. Kolvin said that when the Licensing Act 2003 (Fees) Regulations 2005 was published, fees were set at a level to enable recovery of the full costs of administration, inspection and enforcement.

However, from 2009, licensing authorities were legally prevented from charging fees going beyond the costs of the authorisation process. Therefore licensing authorities should have recalculated fees to remove the element of enforcement.

Under the Licensing Act 2003, fees are centrally set by Government, but Kolvin said that Government was “bound by the same rule as local authorities”.

He exclusively told the PMA: “This is not just technical. The legislature really meant to ensure that people did not have obstacles when they wanted to provide services in the EU, so they should only be asked to pay administrative costs. There’s an important point here in not having administrative penalties and barriers when people want to supply services.”

Jonathan Smith, partner at licensing legal firm Poppleston Allen, said: “I agree this is unlawful. Is there an opportunity here for licensees or trade bodies to reclaim previous fees? It’s possible, but I don’t think there’s a huge appetite for it.”

Licensing lawyer Peter Coulson explained that it was important to note that local authorities cannot charge licensees for enforcement if it is to check illegal traders, but it can charge for checking if licence holders are not in breach of their licence conditions.

He added: “Whether it would be possible to [claim reimbursements] is a moot point as it would be very tricky for licensees. There’s so much work involved. Local authorities will have to look carefully at the way they set licence fees to avoid being challenged.”

Kate Nicholls, strategic affairs director at the Association for Licensed Multiple Retailers, said that she thinks operators will look carefully at what Kolvin is saying
to assess whether there is scope for reimbursement.

A Home Office spokesman said: “The Government has committed to introducing locally-set licensing fees. We are carefully considering the implications of the Hemming case before introducing regulations on fees.”