Planned ban on Edinburgh lap dancing clubs overturned after judicial review petition by club owners

Kaagobot Ltd, Y11JTR Ltd, and Netherview Ltd, as well as an employee of the first petitioner, sought reduction of the decision as well as an award of damages. The United Sex Workers union, which represented at least 12 women working in clubs owned by the petitioners, appeared as an additional party, arguing the decision breached the Article 8 ECHR rights of its members.

The petition was heard in the Outer House of the Court of Session by Lord Richardson. A O’Neill KC appeared for the petitioners, C O’Neill KC for the respondent, and Welsh, advocate, for the additional party.

Rebuttable presumption

Following the coming into force of section 76 of the Air Weapons and Licensing (Scotland) Act 2015, local authorities were given the power to resolve that Sexual Entertainment Venues in their areas would be subject to a new licensing regime detailed in sections 45A to 45F and Schedule 2 of the Civic Government (Scotland) Act 1982, as amended. On 31 March 2022, the respondent’s Regulatory Committee resolved to apply the new regime to the city, and that the appropriate number of SEVs within the area was to be nil.

Prior to the decision, the respondent had engaged in a consultation process beginning in October 2019 when it agreed in principle to licence SEVs. The Committee was provide with a report which advised that the appropriate number should be set at either four, the existing number of operating venues, or nil. In addressing the nil limit option, it was advised that a rebuttable presumption would be created against the grant of SEV licences which would not result in the automatic refusal of an application for a licence.

It was submitted for the petitioner that, on a correct reading of the relevant provisions, the respondent would have no discretion but to refuse an application if, at the time it was made, the number of SEVs in the area was equal to or exceeded the permitted limit. The respondent had been given incorrect advice concerning the creation of a rebuttable presumption which ignored the nature of the duty under the 1982 Act. Additionally, the respondent had failed to provide proper and adequate reasons for its decision, which in itself represented an error of law.

In primarily written submissions, the additional party argued that the consequences of the respondent’s decision were so severe in respect of its members as to engage Article 8 ECHR. It referred to affidavits produced by women who worked in the petitioners’ establishments referring to significant disruption to their lives that would be caused on the closure of the venues, including financial hardship and the need to move away from Edinburgh.

No such discretion

In his decision, Lord Richardson began: “It appears to me that the critical difference between the parties is the proper construction of those provisions of the Civic Government (Scotland) Act 1982 which were introduced by the Air Weapons and Licensing (Scotland) Act 2015. Notwithstanding the lengthy submissions that I have heard, I consider that this issue is essentially determinative of the present case.”

On the proper construction, he said: “In terms of Schedule 2 paragraph 9(4), the local authority ‘shall’ refuse an application if, in their opinion, one or more grounds specified in paragraph 9(5) apply. This wording makes clear that when one or more of the grounds set down in paragraph 9(5) apply, the local authority requires to refuse the application. I accept that the reference in paragraph 9(4) to the local authority’s opinion as to whether the grounds apply could suggest discretion. However, the wording of the relevant ground – paragraph 9(5)(c) – makes it plain that there is no such discretion.”

He continued: “As I construe the legislation, it enables local authorities to exercise appropriate control over SEVs in their respective areas. Each local authority is empowered to determine, as a matter of policy, that there should be no SEVs in its area by making a nil determination in terms of paragraph 9(5A) of Schedule 2. This is consistent with the legislation’s stated policy objective. Were the legislative scheme only to have created a rebuttable presumption against the grant of licences in the event of a nil determination, the exercise of the local authority’s discretion in respect of any particular application would still be open to challenge by prospective applicants.”

Addressing the ECHR aspect of the additional party’s case, Lord Richardson added: “I reject the additional party’s challenge based on Article 8 of the Convention. I do so on the basis that I do not consider that the additional party has standing in terms of section 7 of the Human Rights Act 1998. This is because I do not consider that the additional party is a ‘victim’ itself in terms of Article 34 of the Convention and, furthermore, I do not consider that, consist with the jurisprudence of the Strasbourg Court, the additional party is entitled to act make a representative claim on behalf of its members.”

Lord Richardson therefore reduced the decision of the respondent and put the case out by order in order to address the issue of any potential damages.