Hemmings - the final reckoning

On 19 July 2017, the Supreme Court handed down a further judgment in the long running Hemmings case. This follows their previous judgment on 29 April 2015.

In brief, the case concerns fees charged by Westminster City Council to the respondents over their sex shop licences, the issue being that the fees included the Council’s enforcement costs against unlicensed third parties operating sex shops.

The Court of Appeal had originally ruled that the fees levied by the Council should not include enforcement costs against unlicensed third parties, which resulted in significant repayments being made to the respondents.

The Supreme Court in its original ruling in 2015 drew a distinction between what it called Type A and Type B fees, these being:

• Type A – once a licence application is granted the applicant must pay a fee to cover the cost of administering and enforcing the licensing scheme; and
• Type B – applicants must pay a fee on submission (to cover the cost of administering and enforcing the licensing scheme) that is refundable if the application fails.

Type A schemes were ruled permissible under domestic and EU law. The use of Type B schemes was referred to the European Court of Justice and on 16 November 2016 the ECJ ruled the Council could not operate a Type B scheme.

The recent ruling was to consider whether the Council was entitled to be paid/repaid for the repayments it made following the Court of Appeal’s decision.

The Supreme Court unanimously confirmed that insofar as the Council has determined a reasonable fee (including enforcement costs) it is entitled to be paid/repaid by the respondents (but that this would need to be according to the pro rata sums actually received by each licence holder).

The case can be found here.