Under the EU's Services Directive, any charges payable by applicants for a licence or other authorisation procedure must be "reasonable and proportionate" to the costs of that procedure and not exceed them.
In November 2016, the CJEU found that requiring applicants to "prefinance" the management and enforcement costs of the licencing regime was in breach of the directive, which was set up to restrict "overly burdensome" authorisation schemes that hinder freedom of establishment.
Following a decision by the Court of Appeal, Westminster City Council repaid amounts corresponding to the management portion of the fee to the licence holders.
In the present action, it sought recovery of these repayments based on the distinction between up-front management costs and management costs charged to successful applicants drawn by the Supreme Court.
It follows that, in so far as the council has determined a reasonable fee, including enforcement costs, there is no answer to the council's claim to be paid or repaid it now," he said.
"Its invalidity was limited." "Contrary to the [shops'] case, European law permits a fee to cover the costs of running and enforcing the licensing scheme becoming due upon the grant of a licence. to treat the whole scheme as invalid, rather than to invalidate it to the extent of the inconsistency," he said.Westminster City Council can recover "reasonable" licensing fees and enforcement costs charged to various sex shops in Soho, London, even though these fees were later found to be in breach of an EU directive, the UK's highest court has ruled.