A Soho charity is facing financial ruin after losing a disastrous legal battle against a gin distillery in the heart of London’s West End.
The Soho Society faces a legal bill of up to £44,000 after going to court to challenge Westminster Council’s decision to grant an alcohol licence to The Green Room Distillery.
Chief Magistrate Paul Goldspring is set to rule next week on how much of the costs bill must be paid.
But the society’s barrister, James Rankin, warned Westminster magistrates court on Friday: “If you make an order to that effect, it will bankrupt the society.”
The award-winning gin distillery, housed in a Grade II* building in Meard Street, Mayfair, was established by friends Duncan and Seb when their jobs in theatre were hit by the pandemic.
The Soho Society was among the objectors when the council agreed to grant a premises licence last summer.
It then mounted a challenge in the magistrates court on public safety grounds, particularly arguing that the storage and use of flammable ethanol poses a fire risk and the council had not imposed proper conditions to tackle the risk.
At the court hearing, Peter Cave, the freeholder of the property above the distillery “expressed alarm at the idea of flammable substances being introduced beneath his home”, said the judge.
And Tim Lord, who is on the Soho Society’s board, called the plan “unsafe” and expressed wider frustration at the changing shape of businesses in the West End.
But Judge Goldspring highlighted that distilling alcohol is not an activity covered by the 2003 Licensing Act, and removing the Green Room’s licence would do nothing to stop the distillation part of the business from continuing.
On the contrary, he said, the licence granted by the council allows it to “impose conditions that provide additional control over the fire risk”.
He said the Soho Society’s concerns about a fire or an explosion are “real and merited”, but dismissing the appeal, he said overturning the licensing decision would not be right.
Westminster Council has spent more than £68,000 on the legal battle, the court heard, and its barrister Leo Charalambides said the local authority is only seeking £16,726 of its costs in recognition of the contribution the Soho Society has to the local community.
Dr Sam Fowles, representing the Green Room, asked for an order for its costs of £27,166 to be paid.
“This is a small business trying to get off the ground, and it has been put to substantial expense by the Soho Society’s decision to pursue this appeal”, he said.
“The business has not been able to move forward in the way the investors expected, and it has been hanging over them for around a year.
“I don’t think it’s just for my client to be required to pick up the tab for the Soho Society’s failed attempt.”
Mr Rankin asked the judge to refuse to make a costs order, or to limit the amount that must be paid.
“It is a charity which has been in existence for 50 years”, he said.
“There is small expenditure for an office - £9,000 – it produces a newspaper called the Clarion for £4,000, and there is a village fete coming up which it relies on for raising funds.
“Without money in the bank account, these can’t be paid.”
Judge Goldspring suggested the society must have known a costs bill would follow if the legal challenge was unsuccessful.
“I’m going to reflect”, he said, agreeing to adjourn his decision for seven days. “I do obviously have concerns about the financial security of the charity if I make the order being asked.”
The Soho Society regularly contributes to planning decisions and licensing applications, saying it aims to “make Soho a better place to live, work and visit”.
Set up in 1972, it raises the concerns of local residents on issues such as Oxford Street pedestrianisation, the spread of sex and betting shops, crime and disorder, and pedicabs.
