Restaurants in a Dorset seaside town have been overcharged for outdoor seating for more than a decade, with some establishments paying up to £4,500.
Businesses operating along Marine Parade in Lyme Regis were hit with bills charging £600 per table over a 14 year period, despite a national cap limiting new pavement licence fees to £500 and renewals to £350.
The town council has now been ordered to reimburse tens of thousands of pounds to affected eateries after it emerged the authority had wrongly assumed ownership of the pavements.
Eleven businesses are entitled to refunds, with some payments already processed from council reserves while others remain outstanding.
The overcharging stemmed from Lyme Regis Town Council's mistaken belief that it held ownership of the Marine Parade pavements, entitling it to set its own commercial rates for outdoor seating.
However, Dorset Council has now confirmed that Marine Parade constitutes a public highway in its entirety, meaning it falls under national pavement licence regulations.
The revelation came following research conducted by Dorset Council in late 2025, with a director informing the town council just before Christmas that the charges were unlawful.
Fees should have been payable to Dorset Council rather than the town authority throughout this period.
The confusion originated from a 2011 agreement between the town council and Dorset Council's predecessor authorities, which was intended to formalise management arrangements for Marine Parade but was subsequently found to have been incorrectly interpreted.
Larry Gibbons, proprietor of Largigi Cafe, remains without his refund despite claiming he is owed in excess of £50,000, reports MailOnline.
The 72-year-old has operated seven outdoor tables and 30 chairs at his Marine Parade establishment since opening in 2009, paying up to £4,500 annually throughout that period.
While smaller claims have been settled, Mr Gibbons said the council has demanded bank statements stretching back 15 years before processing his payment.
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"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," he said.
"Surely they know how much I have paid them over the years."
He accused the authority of believing the law did not apply to them, noting that even Westminster City Council adheres to the national cap.
Town clerk John Wright acknowledged the situation was "embarrassing" but maintained the authority had acted in good faith throughout.
"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," he said.
The refunds will be drawn from the council's £1million reserve fund, which is designated for material and unplanned expenditure.
A council spokesman apologised to affected proprietors, describing the situation as "unfortunate" and confirming that agreements had been reached with the majority of the 11 businesses for payments dating back to 2012.
Mr Gibbons's claim is being handled separately due to its complexity, with the council hoping to resolve remaining cases shortly.
The spokesman said: "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 follows research undertaken by Dorset Council in late 2025. This position was informed by an agreement entered into by Dorset Council's predecessors, West Dorset District Council, Dorset County Council, and Lyme Regis Town Council in 2011, and which the town council relied on.
"The purpose of the 2011 agreement was to formalise arrangements for the management of Marine Parade and we have since acted in accordance with that agreement.
"This allowed Lyme Regis Town Council to charge a commercial rate for outside seating, which has in turn supported the maintenance and upkeep of the Marine Parade.
"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."
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