Category: Licensing Law

The Home Office has issued revised Guidance under Section 182 of the Licensing Act 2003 and it can be found at the following link:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/607237/182Guidance_05_04_17.pdf

This is one of the longest gaps that there has been in between revised editions, with the previous Guidance having been in place since March 2015.

The document grows! Its previous incarnation was 122 pages long and the new version has expanded to 147 pages. One of the key areas of change has been to include the amendments brought about by the Immigration Act, as discussed in my other article in this newsletter.

The other key change is the introduction of Chapter 12, which deals with Summary Reviews. I have long been a proponent of introducing Guidance on Summary Reviews into the statutory document.

We had, up until this version of the Section 182 Guidance document, not had any statutory guidance from the Home Office on the most impactful of enforcement powers within the legislation. There had been a non-statutory guidance document created by the Home Office which had been criticised in the High Court case of Sharanjeet Lalli v Commissioner of Police for the Metropolis and LB Newham [2015] EWHC 14 (Admin). In this case the High Court Judge was critical of the drafting of the document and pointed out its inaccuracies. However we now have statutory Guidance under Chapter 12, which hopefully will assist all parties in dealing with Summary Reviews. Summary Reviews were introduced into the Licensing Act 2003 by the Violent Crime Reduction Act. However there are now other key changes and these have been the subject of advice through the Guidance document. The new chapter sets out the process in clear terms with Guidance from the Home Office, for example, as to when a senior officer should consider signing a certificate because he feels that the premises the subject of a Summary Review are associated with serious crime, serious disorder or both.

The Chapter goes on to deal with what the Licensing Authority needs to do in considering Interim Steps, pending the determination of the final review hearing. Paragraphs 12.29 and 12.30 deal with Review of the Interim Steps under Section 53D, which is a change to the Licensing Act 2003.

Paragraph 12.29 states that “the Licensing Authority’s determination does not have effect until the end of the 21 day period given for appealing the decision, or until the disposal of any appeal that is lodged. To ensure that there are appropriate and proportionate safeguards in place at all times, the Licensing Authority is required to review any Interim Steps that it has taken that are in place on the date of the hearing (for the final review) and consider whether it is appropriate for the promotion of the licensable objectives for the steps to remain in place, or if they should be modified or withdrawn. The review of the Interim Steps should take place immediately after the determination under Section 53C has been reached. In making its decision the Licensing Authority must consider any relevant representations made.”

Paragraph 12.30 states that “in conducting the review of the Interim Steps the Licensing Authority has the power to take any of the steps that were available to it at the initial stage (see paragraphs 12.13). Any Interim Steps taken at the review hearing apply until –

1. the end of the period given for appealing against the decision made under Section 53C (21 days),
2. if the decision under Section 53C is appealed against, the time the appeal is disposed of, or
3. the end of a period determined by the relevant Licensing Authority (which may not be longer than the period of time for which such Interim Steps could apply under (a) or (b) above).”

At paragraph 12.31, the Guidance deals with the right of appeal against review of the Interim Steps decision, where either the licence holder or the Chief Officer of Police may appeal against the decision made by the Licensing Authority concerning its review of the Interim Steps to a Magistrates’ Court within 21 days of the Appellant being notified of the decision by the Licensing Authority. This appeal must be heard by the Magistrates Court within 28 days, beginning on the day on which the Appellant lodged the appeal.

A flow diagram of the Summary Review process is then highlighted at page 80 of the Guidance, which is helpful. These are key changes to the Summary Review procedure which encapsulate the changes that have been made to the Licensing Act 2003 and in particular the introduction of the necessity for the Licensing Authority to deal with Interim Steps that exist after the final review decision.

Chapter 2 “the Licensing Objectives” of the Crime and Disorder Guidance has been amended to include the directive that Licensing Authorities should work with the Home Office Immigration Enforcement, as well as the police, in respect of prevention on immigration crime including the prevention of illegal working in licensed premises.

There is a new paragraph 3.7 introduced dealing with wholesale of alcohol which highlights “from the 1 April 2017, businesses which sell alcohol (for example, retailers of alcohol and trade buyers) will need to ensure that the UK wholesalers that they buy alcohol from have been approved by HMRC under the Alcohol Wholesaler Registration Scheme (AWRS). They will need to check their wholesaler’s Unique Registration Number (URN) against the HMRC online database, which will be available from April 2017. This an ongoing obligation and if a business is found to have bought alcohol from an unapproved wholesaler, they may be liable to a penalty, or could even face criminal prosecution and their alcohol stock will be ceased. Any trader who buys alcohol from a wholesaler for onward sale to the general public does not need to register unless they sell alcohol to other businesses. This is an additional requirement that has been added into the legislation and dealt with in the Guidance document.

A new section is introduced incorporating paragraphs 3.21 to 3.33 which is headed “late night refreshment exemptions based on designated locations, premises types and times”. This is a further deregulation introduced into the licensing legislation and the details of areas that can be designated are carefully set out in the Guidance.

Chapter 4, dealing with personal licences has been amended to incorporate the additional requirements for proof of entitlement to work in the UK, as amended by the Immigration Act 2016. My previous article deals with this and the Guidance document is clear in what needs to be undertaken to satisfy these additional tests.

Paragraph 4.5 of the Guidance deals with the introduction of the Police and Crime Act 2017 power for Licensing Authorities to revoke or suspend personal licences, with effect from the 6 April 2017. This is a discretionary power. When a Licensing Authority has granted a personal licence and becomes aware that the licence holder has been convicted of a relevant offence, foreign offence or been required to pay an immigration penalty, the Licensing Authority may revoke the licence or suspend it for a period of up to six months. This has been introduced into the legislation due to the fact that the Magistrates were not using their powers when relevant prosecutions were taken. This is an additional ability for Licensing Authority to review those cases and determine in the circumstances whether a suspension or revocation should be considered and paragraphs 4.45 to 4.50 deal with the procedure in clear terms.

Paragraph 4.51 highlights that the schedule of relevant offences under Schedule 4 of the Licensing Act 2003, which details the relevant offences to be considered has been amended as of the 6 April 2017 and those amendments need to be borne in mind.

Paragraph 8.7 of the Guidance document introduces the Home Office Immigration Enforcement Officer as a responsible authority for making representations against applications for premises licences and also gives them the power to review licences.

There is then a new section introduced “entitlement to work in the UK” which introduces new paragraphs 8.35 to 8.37 and highlights the measures that need to be taken to provide documentary proof of right to work.

An annexe has been created at pages 145 to 147 which deals with the documents capable of demonstrating an entitlement to work in the UK. This is clearly a critical change in the primary legislation and Guidance and is sure to have ramifications.

I would be delighted to deal with any particular queries that anyone has in relation to the changes to the primary legislation and the Guidance document which have become effective as of April 2017.

 

 

On the 6 April 2017 the Home Office issued new Guidance and forms to deal with a proliferation of illegal workers in licensed premises.

Please find a link below for the Guidance and new forms which need to be used from this date.

https://www.gov.uk/government/publications/immigration-bill-part-1-labour-market-and-illegal-working

The Home Office highlights in the documentation that the policy seeks to prevent illegal working in premises licensed for the sale of alcohol and late night refreshment by introducing immigration safeguards into the existing licensing regime. Its aspiration is that the measures will prevent premises and personal licences being issued to individuals who, if resident in the UK, do not have permission to be in the UK or work in the sector and where to grant a licence will be prejudicial to the prevention of illicit immigration, crime and illegal working.

Section 36 of, and Schedule 42 to, the Immigration Act 2016 amend the Licensing Act 2003 and introduce immigration safeguards in respect of licensing applications. These measures were not well circulated in advance of their effective date of the 6 April 2017 for England and Wales.

In real terms the following consequences arise:

1. Licences will not be granted to those without lawful immigration status or entitlement to work in the UK. As a result of this there are practical implications for those making applications, in that all applications (by individuals irrespective of their nationality or the size of the business they represent) for licences will be required to include documentary evidence of their lawful immigration status and entitlement to carry out work in a licensable activity, and checks will be performed on a non-discriminatory basis. In real terms this has meant that in applications to transfer Designated Premises Supervisors we have now been asked to send identification and confirmation of right to work as part of the application process.
2. The Secretary of State will be added to the list of existing responsible authorities under the Licensing Act 2003. All applications for personal licences will require the applicant to demonstrate that they are eligible to carry out work in the licensed business and they must declare any previous criminal offences, together with immigration offences (including receipt of civil penalties). Where the applicant declares in their application for a personal licence a previous immigration offence or a comparable foreign offence, the relevant Licensing Authority will forward the application to the Home Office for further consideration. The Home Office will decide whether to make representations to the Licensing Authority, in their status as a responsible authority.

Where it is necessary to prevent illegal working and immigration crime, the Secretary of State (Immigration Enforcement) will submit to the relevant Licensing Authority an objection to the grant of a licence, or request that conditions be applied to a premises licence. Immigration Enforcement may also request the review of an existing premises licence as a result of enforcement activity which identifies the commission of immigration offences or where the holder of a licence issued before the 6 April 2017 no longer has immigration permission to work. In all cases it is the Licensing Authority that makes the decision on the licence application or review, having considered any representations. The measures do not change the existing process of licensing hearings and appeals.

1. Section 179 of the Licensing Act 2003 in relation to rights of entry to investigate licensable activities has also been amended by the 2016 Act to align the power of entry of an immigration officer with that of a licensing enforcement officer. This power of entry will be used to investigate illegal working following receipt of intelligence and will facilitate joint working operations of immigration officers with licensing enforcement officers, the police and bodies involved in the inspection of licensed premises.
2. The new measures will ensure that, for those licence holders who immigration status in the UK is time limited, their licence, if issued on or after the 6 April 2017, will lapse at the point that their immigration permission and their entitlement to work in licensable activities comes to an end.

Application forms have been amended in Regulations: the Licensing Act 2003 (Miscellaneous Amendments) Regulations 2017 to include a requirement to provide details of the date of birth, nationality and evidence of an entitlement to carry out work in the licensable activity with the application. These evidential requirements are broadly similar to existing right to work checks, which have been in place since 2006, and are set out in the application forms.

This has immediately had an impact in our office as our forms have had to change and we have had to request the additional information that the change in legislation has brought about.

This could potentially create delay in applications and is a factor which should be borne in mind when taking instructions. We are presuming that Licensing Authorities have had better notification of these changes than we have.

The House of Lords Select Committee on the Licensing Act 2003 has published its report, nearly a year after being asked to scrutinise the Act. There are a significant number of far-reaching recommendations in the report. A summary of the findings in the report is as follows:

• To merge licensing committees with planning committees, urging the Government to trial this vision going forward.
• Close coordination between licensing and planning systems with much more crossover between the respective legislation.
• Introduction of the “agent of change” concept to protect residents and businesses from the consequences of new development.
• Planning inspectors to hear licensing appeals.
• Minimum unit pricing in England and Wales should follow any introduction in Scotland if proven to reduce excessive drinking.
• Government should seek means to control excessive alcohol consumption through taxing and price.
• Licensing Authorities to publish reasons when cases are settled out of court.
• A mandatory set of minimum training requirements for Councillors to be published.
• The Section 182 Guidance to lay out the structure and process for hearings.
• The requirement for applications to be advertised in a newspaper should be removed.
• Local Authorities to have the power to object to Temporary Event Notices.
• Clarification on Section 19 Closure Powers should be incorporated in the Section 182 Guidance.
• There should be a discretion to impose an immediate effect on decisions at a review hearing.
• EMROs should be repealed.
• Greater scrutiny of the effects of the late night levy with possible repeal if the current proposed changes, yet to be enacted, do not work.
• Fees should be set locally, not nationally.
• Enforcement of penalties for sales of alcohol to a person who is drunk (Section 141) should be taken more seriously.

The Government is now charged with scrutinising the report of the Select Committee and could respond within two months of its publication. Once the Government has responded there will be a debate in the House of Lords, at which time the Committee Chair will comment on the Government’s response and this is likely to take place at a debate in October.

One would expect to see the trade bodies now coming out to lobby Government on anything in their response which they feel could have a negative effect on the sector.

The recommendations are significant and could lead to a wholesale change in the licensing system if adopted in significant part.

We will of course monitor the process of this through the Summer and into the Autumn and report.

The full report of the Select Committee can be found at:

https://www.publications.parliament.uk/pa/ld201617/ldselect/ldlicact/146/14602.htm

 

 

Regulations were laid before Parliament on 13 March setting the date for the commencement of important changes to the Licensing Act 2003 brought about by the Policing and Crime Act 2017, which received Royal Assent on 31 January: http://www.legislation.gov.uk/uksi/2017/399/made

The principal changes, which will come into force on the 6 April, surround the operation of interim steps under the summary licence review procedure. They will potentially have a significant impact.

These changes have been afoot for some time, following a study on the summary review procedure by the Regulatory Policy Committee, which reported on 3 February last year. The Report outlined the lack of absolute clarity at present as to whether interim steps cease to have effect after a full review of the premises licence has been determined, in cases where the premises licence holder appeals against that review decision. It also set out the detrimental effect and losses to businesses that are currently being caused where interim steps continue to have effect following the full review of the licence and pending the determination of an appeal.

The changes aim to give access to an expedited appeal process against interim steps, to clarify Licensing Authorities’ ability to review and amend interim steps and to provide clearer legal certainty that interim steps do remain in place, unless removed or amended by the Licensing Authority, until the final determination of review, following an appeal where applicable, takes effect.

The Regulatory Policy Committee’s Report noted that interim steps had been imposed in 106 cases in 2014, the most common of which being restricting the operating hours, suspending the licence or removing the DPS.

The Committee relied upon evidence provided by the Association of Licensed Multiple Retailers which showed that an inability to remove interim steps with the effect that they remained in place after full review proceedings pending an appeal and the lack of any expedited appeal process against interim steps was costing businesses £2.3m per year. It anticipates that these proposed changes will save businesses £0.4m per year in lost profit.

The Committee said:

“The Department’s assessment is that costs arising from interim steps that go beyond the review outcomes inappropriately impose costs that are not directly correlated to the offence. Therefore, the Department’s assessment is that removing these costs is a benefit associated with enabling the businesses’ legally compliant activity. The RPC accepts that this is a reasonable approach to differentiating between the impacts on compliant and non-compliant business.”

From 6 April there will be only one chance for the premises licence holder to make representations against any interim steps imposed, on 48 hours’ notice, unless there has been a material chance in circumstances. “Material change” is not defined in the Act, but one might suppose that making voluntary changes to the nature of the operation, such as installing additional CCTV, engaging additional security or voluntarily changing the DPS, might qualify as a “material change”.

The Licensing Authority will now be obliged to review any interim steps imposed when it comes to hear the full review application, and consider whether to withdraw or modify them. The changes to the legislation oblige the sub-committee to consider the status of the interim steps as part of the final review decision and consider what should happen to them as part of their decision-making process. It must listen to representations made by all parties so, for example, if one of the interim steps was suspension of the licence, it would be possible for the operator to make an argument at the full review hearing that this should be lifted. If successful, this would have the effect that, were that to be an appeal against the final review decision, for example, against the imposition of certain conditions, the suspension of the licence would not kick in again pending the determination of the appeal, as is the case at present.

The Act makes it clear once and for all that any interim steps, as modified where applicable, will apply until the period for appealing the final review decision or the determination of any appeal has occurred. However, the Licensing Authority will be at liberty to prescribe a shorter period during which interim steps will remain in place. This at least gives absolute legal certainty, which must be welcomed, that interim steps do remain until the full review decision takes effect, whether or not following an appeal or the expiry of the appeal period.

Importantly, the Act also gives licence holders a new right of expedited appeal against interim steps: such an appeal must be heard by the Magistrates (albeit not necessarily determined!) within 28 days of commencing the appeal.

The other change brought about by the Act which will come into force on the 6 April is the power for a Licensing Authority to revoke or suspend for up to 6 months a personal licence where it becomes aware, by any means, that the personal licence holder has been convicted of a relevant offence or required to pay an immigration penalty. It will not be able to do so before the time for appeal against any conviction has expired, or, in the case where an appeal is lodged, before that appeal is determined. In addition, it will have to give notice to the personal licence holder in order that he or she can make representations within 28 days. There is no right to a hearing, so it appears that the matter will be decided on the papers and behind closed doors. If the Licensing Authority does not intend, following deliberation, to revoke or suspend the licence, it must inform police accordingly and police will then have 14 days to make their own representations. Again, there is no provision for any hearing but the Licensing Authority must then consider the matter further, reach a decision and notify the parties.

The personal licence holder will have the right to appeal against any suspension or revocation of the personal licence, following the standard appeals procedure, that is to say, within 21 days of being notified of the decision.

The Act also makes various minor updating amendments to the list of relevant offences under the Licensing Act.

There are other planned changes to the Licensing Act brought about by the 2017 Act, for which these recent Regulations do not yet set a commencement date. These surround placing Cumulative Impact Policies on a statutory footing by prescribing various requirements for the Licensing Authority to publish their assessment of Cumulative Impact, together with the evidence for it, to consult on the policy and to publish their decision whether or not to implement a policy, together with their reasons. Further changes to come also include introducing greater flexibility in relation to Late Night Levies, in that the Licensing Authority will be able to apply the Levy to part of their area only, to decide whether to include or exclude late night refreshment premises, and will be free to impose different Levy requirements on different parts of their area. We will update you on these further changes as and when we have a date for their implementation.

The Gambling Commission (“GC”) has issued a public statement following its investigation into the activities of TGP Europe Limited (“TGP”) and Fesuge Limited (“Fesuge”). This statement identifies various failings in compliance in relation to the GC’s fairness and openness requirements, obligations surrounding consumer rights and the standards expected in relation to marketing. The statement is of significance because the GC has stated that the issues identified are likely to form the basis for future compliance assessments of other gambling operators.

TGP and Fesuge are both part of a single group of companies and are based in the Isle of Man, licensed by both the Isle of Man Gambling Supervision Commission and the GC. Both companies promoted various bonus offers during the Cheltenham festival in March 2016 under various brands: FUN88, TLCBet, 12Bet and 138.com. Those offers were subject to their own specific terms and conditions, as well as to the general terms and conditions of TGP and Fesuge. Bonuses for new sign-ups and existing customers were offered, but none of the brands allowed customers to have a multiple accounts.

The GC investigation follows hard on the heels of the GC announcing that it is cooperating with the Competition and Markets Authority (“CMA”) in its campaign to ensure that the terms and conditions of gambling operators are fair to consumers. This has resulted in the CMA issuing Information Notices, as previously reported here, under Part 3 of Schedule 5 to the Consumer Rights Act 2015 (“CRA”) to a range of gambling operators. This initiative has largely concentrated on potential breaches in the betting sector, focussing on misleading terms and conditions, promotions that are difficult to understand or that may be unachievable, players being blocked from collecting their winnings, bets being cancelled or odds altered, and terms unreasonably restricting players’ rights to challenge operators’ decisions. It also comes after the announcement by the GC that it will place all of the regulatory tools at its disposal on an equal footing, and will no longer favour voluntary settlements over formal licence reviews. In this respect, it is interesting that this case has resulted in a voluntary settlement being reached, rather than a formal licence review being launched.

The case arises because TGP and Fesuge assessed the take-up of their bonus offer and concluded that a large number of bets had been placed in contravention of Clause 15.2 of their Terms and Conditions, which provides:

“in the event that we suspect that you or any other player is abusing or attempting to abuse a bonus or other promotion, or is likely to benefit through such abuse we may block, deny or suspend, withhold or cancel the account of any such player, including your account if we determine that you are involved in such.”

 TGP and Fesuge took the decision to suspend more than 5,000 players’ accounts because they considered them to be in breach of this rule. Of particular concern to them was that it appeared that existing customers had set up multiple accounts in order to avail themselves of the bonus offer several times over. Some existing customers had also tried to benefit from the new sign-up bonus by setting up new accounts in different names.

As a result of their investigations, TGP and Fesuge took the decision to suspend the relvant customer accounts and, correctly, notified the GC of their concerns as a Key Event. As a result of the suspension of these accounts, the GC and the Independent Betting Adjudication Service (“IBAS”) received over 1,000 complaints from around 800 separate customers. The majority of the complaints referred to IBAS were settled prior to adjudication, and in the small number of outstanding cases which were adjudicated, the IBAS Panel accepted that both TGP and Fesuge had acted reasonably in connection with the majority of cases.

At the crux of the matter was the fact that the relevant terms and conditions were unclear and ambiguous, something which was accepted by TGP and Fesuge. They acknowledged that they did not handle the case in an efficient way and that their terms and conditions did not provide a clear definition of bonus abuse. In addition, both companies cooperated fully with the GC throughout the investigation, and took its advice. They identified serious shortcomings in their original assessment of the problem, acted promptly after the initial suspension on withdrawals by releasing funds to players on a case-by-case basis, and did not benefit financially from the situation, because stakes to all affected customers were refunded, whether or not they had won or lost. In addition, they instructed external solicitors to undertake a full review of their Terms and Conditions to ensure compliance with the CRA.

The GC’s principal criticisms of TGP and Fesuge’s practices were that they had failed efficiently to deal with the volume of new accounts being opened and that their systems had failed to identify, at the point of registration, people opening multiple accounts. Their approach was reactionary, as opposed to proactive. In addition, the companies conceded that their Terms and Conditions did not make it sufficiently clear to customers that an existing customer could not sign up and take advantage of the bonuses for new sign-ups.

As a result, the GC convened a meeting with the operators and, after considering the evidence, officers concluded that they had breached licence condition 7.1.1B (fairness and openness) and Social Responsibility Code Provision 5.1.1.1a (rewards and bonuses). These provide:

“Licensees must satisfy themselves that none of the terms on which gambling is offered are unfair terms within the meaning of the Consumer Rights Act 2015 and must comply with those terms (section 62(4) of the Consumer Rights Act 2015 provides that: “a term is unfair if contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”)

 “if a licensee makes available to any customer or potential customer any incentive or reward scheme or other arrangement under which the customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) the scheme must be designed to operate, and be operated, in such a way that the circumstances in which, and conditions subject to which, the benefit is available are clearly set out and readily accessible to the customers to whom it is offered”

The GC stressed that, where operators offer bonus promotions in the normal cause of their business or at major events, they must ensure that their Terms and Conditions comply with the requirements of the CRA and the LCCP. The approach must be proactive. Here, the affected operators accepted that their Terms and Conditions were unfair and proposed a voluntary settlement, which was accepted by the GC. This included agreeing to the publication of a public statement, changing their Terms and Conditions in order to address the failings identified, engaging a firm of solicitors to ensure compliance with the CRA, improving their anti-fraud measures and paying the GC’s investigation costs in the sum of £7,000.

As part of the public statement, the GC has identified a number of questions for operators to consider, namely:

• Are you satisfied that none of the terms on which gambling is offered are unfair within the meaning of the CRA?
• Once you have satisfied yourself that none of the terms are unfair, make sure that you comply with those terms.
• Ensure that an accurate summary of a contractual terms on which gambling is offered is available to customers and is set out in plain and intelligible language.
• Are the circumstances in which, and conditions subject to which, the benefit is available clearly set out and regularly accessible to the customers to whom it is offered?

Is your position on bonus abuse, and how it will be applied, clear and transparent to consumers?

This case confirms our instinct that the GC will be focusing on the betting sector in the foreseeable future, particularly in relation to its joint initiative with the CMA to ensure that terms and conditions are fair. It is interesting that this case has resulted in a voluntary settlement rather than a formal licence review. Doubtless, co-operation and a willingness promptly to acknowledge and rectify failings, together with the fact that the operators concerned did not financially benefit from those failings, have played a large part in the GC feeling able to proceed via the public statement route. Other operators should take note of the importance of such a collaborative approach and scrutinise their Terms and Conditions and other practices in line with the questions posed of them by the GC, as set out above.