Supreme Court refers Services Directive question to Luxembourg

29/04/15

In Hemming (t/a Simply Pleasure) v Westminster City Council  [2015] UKSC 25, the Supreme Court considered whether fees charged for the licensing of sex shops by Westminster City Council are compatible with the EU Services Directive (Directive  2006/123/EC). In particular, the Court considered the legality of recouping from licensed operators enforcement costs incurred in respect of non-licensed unlawful operators. In the case of sex shops in Westminster, such enforcement costs comprise over 90% of the charge imposed on applicants for a licence. Various regulatory bodies intervened in the appeal (including the Bar council, BSB, Law Society, SRA, Architects Registration Board, and others). The Court found that, if the charges were only imposed after the application for a licence had succeeded, this was lawful. However, it held that the legality of the particular scheme applied by Westminster to the sex shops – namely that the applicant paid a fee including such enforcement costs upfront, and then was refunded that element of the fee if his application failed – was unclear. Accordingly, it has referred this question to the Court of Justice in Luxembourg.

The judgment is here.