A council has been told to pay back restaurants tens of thousands of pounds after overcharging them for 14 years for the right to put tables and chairs outside.

Shops along Marine Parade in Lyme Regis, Dorset, were billed up to £4,500 a year after the town council wrongly assumed it owned the pavements.

This is despite there being a national cap of £500 for new licences and £350 for renewals.

Businesses were forced to pay the ‘extortionate’ rate of £600 per table over a period of years – with restaurants’ repeated complaints and challenges to the town council falling on deaf ears.

Dorset Council has now admitted that Marine Parade is a public highway and therefore covered by the national cap for pavement licences.

Furthermore, the changes are payable to Dorset Council and not the town council. 

Town clerk John Wright acknowledged the ’embarrassing error in good faith’.

Some of the backdated claims for the 11 affected eateries have already been paid out of the council’s reserve funds.

But Larry Gibbons, the owner of Largigi Cafe, said he is still waiting for his refund of more than £50,000.

He was forced to pay up to £4,500 each year for seven outside tables and 30 chairs at the premises which opened in 2009.

He said he was ‘delighted’ other premises had received refunds, but accused the council of making him jump through hoops for his payment by asking for bank statements dating back 15 years.

Shops along Marine Parade (pictured) in Lyme Regis, Dorset, were billed up to £4,500 a year after the town council wrongly assumed it owned the pavements

Larry Gibbons – who says he is still waiting for his refund of more than £50,000 – at his Largigi Cafe’ on Marine Parade in Lyme Regis

Mr Gibbons, 72, said: ‘The businesses owed smaller amounts have been paid and I am delighted for them, but my claim seems to be more complicated.

‘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 at a time when the hospitality trade was ‘on its knees’ amid increases in National Insurance and minimum wage costs as well as high energy and food bills.

Mr Gibbons added: ‘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 sole justification offered by the council was their claim of ownership of Marine Parade.

‘However, this argument did not stand up to scrutiny.

‘Marine Parade is publicly accessible, is listed as a highway in the National Street Gazetteer and is subject to a Public Spaces Protection Order across its full extent.

‘This is irrefutable evidence that it is a public space.’

Mr Wright has insisted the council ‘thinks it acted in good faith’.

He said: ‘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.

‘Lyme Regis Town Council has acted in good faith but it has now been determined that Marine Parade is a highway in its entirety,’ a spokesman said (file image)

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‘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.

‘It’s come to light recently that we don’t have those powers.

‘It was only just before Christmas when we had a meeting with Dorset Council and one of their directors said he believed that charge was unlawful and the whole extent of Marine Parade was a public highway.

‘We own Marine Parade, even though it is a highway.’

Mr Wright said the refunds would be paid from the council’s reserves.

He explained: ‘The council holds a reserve of £1m… for expenditure that’s material and unplanned.’

The council said it was dealing with Largigi’s claim separately as it is ‘complex’.

A spokesman added: ‘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.’