Council Ordered to Repay Restaurants Tens of Thousands After 14-Year Overcharging Scandal
Lyme Regis Town Council has been instructed to refund tens of thousands of pounds to restaurants after overcharging them for 14 years for the right to place tables and chairs outside their premises. Shops along Marine Parade in the Dorset seaside town were billed up to £4,500 annually because the council incorrectly assumed it owned the pavements.
National Cap Ignored for Over a Decade
This excessive charging occurred despite a national cap that limits new pavement licences to £500 and renewals to just £350. Businesses were forced to pay what they describe as an "extortionate" rate of £600 per table over multiple years, with their repeated complaints and challenges to the town council consistently ignored.
Dorset Council has now officially confirmed that Marine Parade is a public highway, meaning it falls under the national pavement licence cap. Furthermore, the authority clarified that any such charges should be payable to Dorset Council, not the town council.
"Embarrassing Error in Good Faith"
Town clerk John Wright acknowledged what he called an "embarrassing error in good faith." Some of the backdated claims for the 11 affected eateries have already been paid from the council's reserve funds, but one business owner remains waiting for his substantial refund.
Larry Gibbons, proprietor of Largigi Cafe, says he is still awaiting his refund of more than £50,000. He was compelled to pay up to £4,500 each year for seven outside tables and 30 chairs at his establishment, which opened in 2009.
Frustration Over Refund Delays
"The businesses owed smaller amounts have been paid and I am delighted for them, but my claim seems to be more complicated," said Mr Gibbons, 72. "I believe the refund for the chairs and tables alone should be in the fifties of thousands, but the council expect me to go through all my bank statements over the period. Surely they know how much I have paid them over the years."
The charges came during an exceptionally difficult period for the hospitality industry, which was "on its knees" amid increases in National Insurance and minimum wage costs, combined with soaring energy and food bills.
Council's Flawed Justification
Mr Gibbons pointed out that "Every other council appears to be adhering to the law, including Westminster City Council. Lyme Regis council didn't feel the law applied to them."
The council's sole justification had been their claim of ownership of Marine Parade, but this argument collapsed under scrutiny. Marine Parade is publicly accessible, listed as a highway in the National Street Gazetteer, and subject to a Public Spaces Protection Order across its full extent – "irrefutable evidence that it is a public space."
Good Faith Defense and Financial Fallout
Mr Wright has insisted the council "thinks it acted in good faith" and explained: "We realise now there was an error, we put our hands up to it and what we are trying to do is remedy it as quickly as we can. It is embarrassing - we thought we had the power to levy that charge and we entered into an agreement with the predecessor of Dorset Council back in 2011."
The town clerk revealed that refunds would be paid from the council's reserves, which hold approximately £1 million for "expenditure that's material and unplanned." The council stated it was dealing with Largigi's claim separately due to its complexity.
Formal Apology and Future Arrangements
A council spokesman offered a formal apology: "The complex situation with outside seating on Marine Parade is unfortunate and we apologise to the affected proprietors. Lyme Regis Town Council has acted in good faith but it has now been determined that Marine Parade is a highway in its entirety."
This determination followed research undertaken by Dorset Council in late 2025, informed by a 2011 agreement between Dorset Council's predecessors and Lyme Regis Town Council. That agreement had allowed the town council to charge commercial rates for outside seating, with proceeds supporting Marine Parade's maintenance.
The spokesman confirmed: "There are 11 proprietors affected and Lyme Regis Town Council has agreed refunds with the majority of those for payments dating back to 2012. We hope to complete the remainder shortly. As the highway authority, Dorset Council will be dealing with outside seating licences going forward."
