Tim Buley, QC, for Ms Sheakh, said Lambeth had made a "public acceptance" that the legal orders for the Oval Triangle "were made without authority".
Tim Mould, QC, for Lambeth, said the council had acknowledged it “jumped the gun” to close the Oval roads before certain required procedures were carried out.
Mr Justice Kerr, who will rule soon on the case in the coming weeks, insisted that because Oval Triangle LTN is now law ‘road closed’ signs should be obeyed.
Anne-Marie Irwin, a lawyer at Scott Moncrieff & Associates who is representing Ms Sheakh, said: “My client is pleased that Lambeth have now conceded that they made the Oval Triangle Experimental Traffic Orders without having authority to do so,” she said.
“However this only underlines her concern that Lambeth has failed to follow lawful procedures, including their duty to have regard to the needs of disabled people, when implementing these wide-ranging traffic measures.
“In our submission this is just one example of the way Lambeth has failed to discharge their legal duties when creating the LTNs.”
A council spokesman said: “The council has argued that setting up the Low Traffic Neighbourhoods was fully in line with statutory guidance and national policy objectives.
“In relation to the emergency Oval Low Traffic Neighbourhood, we made an error by not publishing a decision report prior to issuing a traffic order. We acknowledge this fault, but believe the Oval LTN traffic order is not invalidated by this administrative error.
“We reject that these schemes are discriminatory in any way, or installed illegally.”
A council which introduced a low traffic neighbourhood “illegally” is being urged to pay back hundreds of thousands of pounds it has made from motoring fines.
Lambeth Council has been forced to admit an “administrative error” meant it had closed roads to traffic in South London without obtaining the proper authority to do so.
A high court hearing was told town hall bosses had “jumped the gun” by signing off Experimental Traffic Orders to close streets to create the Oval Triangle low traffic neighbourhood (LTN) before it had published a required “decision report”.
Now local campaigners opposed to the scheme say the council has a “moral duty” to refund motorists fined up to £130 for entering an LTN it introduced “ultra vires” - beyond its powers.
A Freedom of Information request shows more than £80,000 of fines were obtained from drivers who entered or exited the Oval LTN.
The One Lambeth group, which is opposed to LTNs, said if the road closures were introduced “illegally” then the fines must also have been made without “proper authority”.
“If the councils admitted the Oval Triangle low traffic neighbourhood was introduced illegally, then they should also admit the fines levied on residents living nearby - including disabled drivers - were imposed without authority,” a spokeswoman said.
“So, they should refund the money they have made. That could mean more than a quarter of a million pounds of fines have been wrongly issued since the LTN was set up last year.”
One Lambeth claims road closures introduced as part of the Government’s “green transport revolution” can slow 999 response times and force traffic onto neighbouring streets creating congestion and pollution, often in poorer areas of the borough.
The “administrative error” emerged during a high court hearing in which Sofia Sheakh, a disabled Lambeth resident, is seeking a judicial review because she claims town hall bosses introducing LTNs across the borough have blighted the lives of disabled people who cannot walk or cycle and rely on cars.