I suggest you cite that court case as they way you recount it is NOT correct. IIRC it was about a portion of the tips being witheld for tax purposes. It is actually ILLEGAL for the restaurants NOT to pass on the tips (that being said, the retsaurant may apportion them among the whole staff in a way that is more detrimental to the servers). It should also be mentioned that London restaurants in particular rip diners off incredible by pulling such tricks as 1) adding a "cover charge" per person, 2) Adding a 10-20% service charge to the bill (which incidentally is also assessed on the vat of 17.5%), and 3) then leaving the tip area blank on the CC receipt. It is not unusual if you are not careful in London to pay in excess of 45% in tips/service fees etc. It is highly illegal and whenever I have spoken up about it and called the manager over they get VERY nervous when I bring up the legality of their actions.