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House of Lords Licensing Committee – An Update

As readers will no doubt be aware there has been constituted a House of Lords Committee which has been established to carryout scrutiny of the Licensing Act 2003. The Committee has published it’s call for evidence and invites all interested parties to submit written evidence by the 2nd of September 2016.

The call for evidence is available at :-

http://www.parliament.uk/documents/lords-committees/Licensing-Act-2003/call-for-evidence-licensing-act-2003.pdf

If you wish to respond to the call for evidence this can be achieved by clicking on the following link:-

http://www.parliament.uk/licensing-act-committee-written-submission-form

It is really important to play a role in this consultation.

I have regularly stressed to clients and operators the need to do so. We were hamstrung in some SEV renewals when Leeds City Council put out a consultation document before looking to change their policy and in effect reduce the number of Sexual Entertainment Venues from seven to four. When we challenged the decision making and policy in the High Court we were advised in clear terms through the judgment that we were seeking to close the stable door after the horse had bolted. The High Court was very clear in saying that we should have challenged the legitimacy of the changes in policy much earlier than through the High Court after renewals were refused.

This is a significant lesson and operators and interested parties should not complain about any changes if they do not get involved in consultations when invited to do so.

The key issues to be analysed in the consultation fall under the following headings.

  1. Licensing objectives.
  2. The balance between rights and responsibilities.
  3. Licensing and local strategy.
  4. Crime, disorder and public safety.
  5. Licensing procedure.
  6. Sale of alcohol for consumption at home.
  7. Pricing.
  8. Fees and costs associated with the Licensing Act 2003.
  9. International comparisons.

The parameter of each of those headings is very clearly established in the documents contained in the links above. We will continue to monitor the progress of the House of Lords Committee and publish any findings as and when they become public.

I can only stress again that this is an opportunity to interact in the process and interested parties should not be afraid to do so.

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Are Minor Variations Working

In July 2009, the Department for Culture Media and Sport issued Supplementary Guidance on “a simplified process for minor variations to premises licences and club premises certificates”. Part One of the Guidance repeats the wording: “a simplified process for minor variations to premises licences” This July 2009 Guidance replaced the Guidance on variations of premises licences published on the 28th of June 2007. It was envisaged that a minor variation was a “small variation that will not impact adversely on the licensing objectives”.

The July 2015 Guidance issued under Section 182 of the Licensing Act 2003 repeats the same phraseology of “a simplified process”. The question to be asked to determine whether an application is to be classified as a minor variation or not is whether the variation proposed could impact adversely on the licensing objectives. Paragraph 8.48 of the Guidance confirms that “in considering the application the Licensing Authority must consult relevant responsible authorities if there is any doubt about the impact of the variation on the licensing objectives… and take their views into account in reaching a decision”.

There are then cited some very helpful examples of what may be a minor variation, including small changes to the layout of premises, as long as the change does not increase the capacity for drinking, or affect access between the public part of the premises and the rest of the premises, or impede the effective operation of a noise reduction measure. Variations to extend licensing hours for the sale or supply of alcohol for consumption on or off the premises between the hours of 23.00 and 07.00 or to increase the amount of time on any day during which alcohol may be sold or supplied for consumption on or off the premises must be treated as a full variation, whereas applications to reduce licensing hours will normally be processed as a minor variation.

Paddy, Anna and I have all been involved in many applications for minor variations and generally Licensing Authorities take a sensible view as to whether an application can be classed as a minor variation or not. I am currently dealing with premises which have been taken over by one of our clients and a new layout plan has been submitted. There is no increase in the public area for drinking, no increase in bar serveries and the Licensing Authority has agreed that this application can be a minor variation.

We have however had instances where we have not agreed with a licensing officer’s decision and it may be that there will be further articles on this point, should one of our cases end up in the High Court. The Guidance confirms that, in some circumstances, it would be possible to amend or remove an existing condition as “premises may change over time and the circumstances that originally led to the condition being attached or volunteered may no longer apply” (paragraph 8.64). For example, there may be no need for door supervision if a bar has been converted into a restaurant.

 What if a door supervision condition had been placed on a licence requiring door staff on a Monday night because, when the licence was granted, Monday night was a busy night (perhaps a student night) and door supervision was required at that time? If the circumstances change and Monday night is no longer a busy night and the premises may only have 20 to 30 customers, then it must surely be appropriate to use the minor variation process to remove a specific requirement for a certain number of door supervisors and replace it with a condition that asks the premises licence holder to risk assess whether and when door supervision is required. I would suggest that this should be treated as a minor variation, especially if the police agree with the application being treated as such.

 Would it be appropriate in such a case for a licensing officer, who has received advice from the police suggesting that from a crime and/or disorder point of view there is no risk to the licensing objectives, to conclude that this particular application should be a full variation as opposed to a minor variation? Although the Guidance asks licensing officers to consider whether an application could impact on the licensing objectives, there clearly needs to be some evidential basis for a licensing officer to reach a particular decision. I do not think it is appropriate for licensing officers who have received advice from the police or environmental health that an application to vary a condition will not impact on the licensing objectives to then rule that the application is not a minor variation and a full application is required. A full variation does of course require a 28 day consultation period, an advertisement to be placed in a local newspaper and of course a significantly increased fee, which could be over £1900 if the multiplier applies… or am I being cynical?

 

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Does being Caught with Illegal Workers Necessarily Mean that your Licence Will be Revoked on Review

I have recently been involved in representing a premises licence holder who had his licence reviewed by the police after being found with seven members of staff for whom he could not, during the raid by immigration officers, provide documentary proof that they were entitled to work in this country. The police brought a review of the premises licence and in the body of the review asked for revocation of the licence citing the case of East Lindsey District Council against Abu Hanif (Zara’s Restaurant). In that case the employer had no records for the illegal employee, the person was not on a payroll, he was paid less than the minimum wage, there were no PAYE records and there was no payment to HMRC for tax.

In quite an interesting case the premises licence holder sought to argue before the District Judge that because this was a matter which brought about a civil penalty, and not a criminal penalty, the crime and disorder licensing objective had not been engaged.

The District Judge agreed with those submissions and therefore dismissed the decision of the licensing authority to revoke the licence.

However, the High Court saw differently and Mr Justice Jay overturned the decision of the District Judge, saying that where there was evidence of defrauding HMRC, exploitation of vulnerable workers and a failure to pay the minimum wage, then in those circumstances, albeit being dealt with by way of a civil penalty, the crime and disorder licensing objective was clearly engaged. Mr Justice Jay didn’t remit the matter back to the authority for a re-hearing, but determined on what he had heard that the revocation should stand.

He did say that “the licensing objectives are prescriptive and are concerned with the avoidance of harm in the future.”

There had also been a decision two weeks before mine in my case in an adjoining licensing authority dealing with premises known as the Star of India. In that case the evidence was that the premise licence holder had made no request for ID documents, was defrauding HMRC, was not paying the minimum wage and in addition there were Licensing Act breaches.

We carefully prepared for our review with the assistance of an organisation called People Force International. They were challenging some of the findings of the immigration officer and had found documentary evidence to deal with some of the suggested instances of illegal workers. By the time we came to the review the investigations had not been completed, and there were still appeals pending in relation to the civil penalty finding.

Amongst other things I successfully argued that the review was at the very least premature, in that the investigation and appeals had not been finalised by the time of the review hearing – even less so by the day that the review was launched and revocation was sought in the application.

We offered robust conditions as an alternative to revocation ,which were as follows:-

  1. The Premises Licence holder will operate a full digital HR management system where all relevant documents are stored for each individual member of staff.
  2. The Premises Licence holder will work with People Force International, or a other similar agency and carry out checks on the Home Office website to verify identification, Visa and right to work documents.
  3. No new member of staff will be able to work at the premises (including any trial period) unless they have provided satisfactory proof of identification and right to work.
  4. All documents for members of staff will be retained for a period of 12 months post termination of employment and will be made available to police, immigration or licensing officers on request.

The licensing authority were not impressed with the quality of the case that had been brought by the police and the fact that there was no immigration officer present to give an update on what had happened and what was the continuing position with the appeals. The Committee was content that the operator was promoting the licensing objectives and now had systems in place which gave them comfort that the errors that had happened before would not happen again in the future.It concerns me that the police force in this case were relying on a High Court decision where the circumstances were significantly different to the matter before the licensing authority. None of the detail had been put in the application for review, nor was it given in all of the submissions to the licensing authority. It just goes to show that there is no substitute for preparing properly for hearings as serious as this.

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What amounts to an abuse of process or entrapment in licensing test purchasing?

I was reminded this week of the case of East Riding of Yorkshire Council v Dearlove 2012 [ALL ER D] 163. I was advising a local authority in relation to a procedure that they wish to put in place for some test purchasing and had to reread the judgment.

This was a case where the High Court determined that the Magistrates’ Court below it had erred in staying, as an abuse of process, a prosecution brought by a local authority against an individual for operating a private vehicle without a licence. The High Court held that the local authority had not entrapped him by carrying out a “test purchase” in booking his vehicle in response to a newspaper advertisement placed by him offering his services.

The appellant local authority had appealed by way of case stated against the decision of the Magistrates’ Court staying a prosecution that it had brought against the respondent – Dearlove. Dearlove had placed an advert in a monthly free newspaper stating “Chauffer-driven BMW, VIP, Executive, Corporate Business Travel, Airport Connections, Male/Female Chauffeurs.” An email address was given at the bottom of the advert. This was reported to the local authority and a copy of the advert was faxed to it. The local authority informed Dearlove that he was not licensed to carry out the activities advertised. Initally, Dearlove indicated that he would apply for a licence that but he later claimed that he would be using the vehicle for weddings and funerals only, for which he did not need a licence. Dearlove was warned of the possibility of a “test purchase” and he said he was not trading as a taxi firm and that, indeed, he had no business at all.

A test purchase was ordered to check whether this was correct. The caller enquired about the fare for a specific journey and whether it included alcohol. At the end of the journey, Dearlove accepted payment as agreed and handed over an invoice and a business card.

The local authority prosecuted Dearlove for driving, operating and using a private hire vehicle without a licence in a controlled district and carrying on a licensable activity by selling alcohol from the vehicle without authorisation. After considering the relevant authorities the Justices concluded that the prosecution should be stayed.

The questions for the opinion of the High Court were whether:

  1. In the light of Attorney General’s Reference (3 of 2000), re R [2001] EWCA Crim 1214, [2001] 2 CR App R 26, the Magistrates has erred in law in finding the local authority’s conduct went beyond simply providing D with an opportunity to commit a crime.
  2. The Magistrates had erred in law in determining that the information available to the local authority prior to the test purchase did not amount to reasonable grounds for believing that criminal activity was taking place.
  3. The Magistrate’s erred in distinguishing the facts of Dearlove’s case from Nottingham City Council the Amin [2000] 1 WLR 1071 DC.

The High Court in looking at this case answered the three questions as follows in its decision:

  1. The local authority had not stepped over the line and had done nothing that any member of the public would not have been able to do. There was nothing in the way the test purchase was carried out that could amount to entrapment. Despite the fact that the local authority knew that Dearlove had no work and was vulnerable, it simply gave Dearlove the opportunity to provide a service as advertised by him. There were reasonable grounds for suspecting him and continuing suspicion was justified. Dearlove had had an express warning that a test purchase would be made and therefore there was no unfairness. There was a strong public interest in ensuring that services such as those offered by Dearlove were properly licensed. The brining of the prosecution could not be regarded as an affront to public conscience. The Justices had erred in ordering a stay of the case against him.
  2. The answer to the first question was yes; no answer was needed to the second question.
  3. The situation in the instant case was comparable to Amin but a yes or no answer was not required to the third question as formulated.

The case was therefore remitted to the Justices for substantive consideration, with the appeal being allowed.

This case gives clear guidance on the position of the local authorities in cases such as this and other areas where test purchasing is carried out – not just the situation with taxi licensing. Authorities have wide discretion and, as long as they act consistently with the guidelines set out in this case, will not be criticised for their approach to test purchasing, particularly if there is “a strong public interest in ensuring that services are not offered incorrectly.”

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House Of Lords’ Call For Evidence On The Licensing Act 2003

On 30 June the House of Lords Select Committee published its call for evidence on the Licensing Act. It is seeking the views of anyone with an interest in the legislation, including operators.

This follows on from a recommendation by the House of Lords Liaison Committee in its 3rd Report of Session, published on 14 March, that an ad hoc Committee should be set up to conduct post-legislative scrutiny of the Act. The Committee was set up on 25 May and has now started to receive evidence. It has already held sessions on 5 and 7 July, at which it heard from senior officials from the Home Office, the Department of Culture, Media and Sport, the Department of Health and Public Health England.

This is the first comprehensive review of the legislation since it was enacted and has been called for against the background of an analysis of the aims of the Government of the day in introducing it. These, say the Committee, were to balance “the broad range of interests engaged by licensing decisions – those of the entertainment and alcohol industries, small and large businesses, local residents and communities, policing, public health, and the protection of children from harm”.

The then Blair Government put it in this way:

“Our approach is to provide greater freedom and flexibility for the hospitality and leisure industry. This will allow it to offer consumers greater freedom of choice. But these broader freedoms are carefully and necessarily balanced by tougher powers for the police, the courts and the licensing authority to deal in an uncompromising way with anyone trying to exploit these greater freedoms against the interest of the public in general.”

The remit of the Committee is now to assess whether the Act has achieved these objectives. It will look at the Act itself, in its original form and with subsequent amendments, associated and subordinate legislation, their implementation, and associated developments.

The Committee has invited general views on the effectiveness of the Act, and will be studying the following specific issues, amongst others:

  • The key aims of the Act and the licensing objectives – are they appropriate? Should there be an additional objective of promoting health and wellbeing?;
  • Has any greater availability of alcohol had an impact on the health of the population?;
  • The lessons to be learned from across the UK and other countries;
  • Does the Act still aim to encourage tourism, leisure and culture? Should access to and enjoyment of licensable activities by the public be an additional objective?;
  • Government policy on alcohol, health and minimum unit pricing (MUP) – is the Act being used effectively in conjunction with other interventions as part of a coherent national and local strategy? Should MUP be introduced in England?;
  • Are all responsible authorities engaging appropriately with the licensing process and, if not, what can be done?;
  • Enforcement and crime and disorder – do the police have adequate powers to promote the licensing objectives?;
  • Late Night Levies and Early Morning Restriction Orders (EMROs) – have they been effective and, if not, what are the alternatives?;
  • Has the licensing process become too complex and, if so, what might be done to simplify it?
  • What could be done to improve the appeal procedure and is there a case for a further appeal to the Crown Court?; and
  • Should licensing fees be set at national level, or should this be devolved, at least to London and the other major cities to which Government proposes to devolve greater powers

The Committee is composed of a dozen members of the House of Lords drawn from the Conservative, Labour and Liberal Democrat Parties, with two crossbench members. It is chaired by the Conservative Peer, Baroness McIntosh of Pickering.

After hearing verbal evidence, the Committee will move on to consider written evidence. The deadline for interested parties to submit this is 2 September and the Committee will then report by 31 March 2017.

Written evidence should be submitted online using the written submission form available at http://www.parliament.uk/licensing-act-committee-written-submission-form, or by post to:

Michael Collon,
Clerk to the Select Committee on the Licensing Act 2003,
Committee Office,
House of Lords,
London
SW1A 0PW

Guidance on submitting written evidence may be found here: http://www.parliament.uk/get-involved/committees/how-do-i-submit-evidence/lords-witness-guide/

Submissions should be dated, and clearly state who they are from, whether it be an individual or made on behalf of an organisation. The Committee expects submissions to be concise, with numbered paragraphs, and any submission longer than six pages should include a one-page summary. You should also note that written evidence may be published online, although personal contact details will be redacted. If you do not wish your submission to be published, you must give your reasons for this, and the final decision on publication will rest with the Committee. Those making written submissions may also be called to give oral evidence in public.

As will be seen from the list of topics above, this is an extremely wide-ranging review of the licensing landscape and the implications for the industry could potentially be huge. Whilst some areas, such as simplifying the licensing process and improving the appeals system, with the possibility of recourse to the Crown Court, might be seen as positives, there is a whole range of issues that the Committee will be looking into, such as changes to the Levy and EMROs to make them more “effective”, that will give many in the trade cause for concern. The addition of a licensing objective encouraging access to, and enjoyment of, licensable activities by the public seems unlikely, and the emphasis placed on pubic health by the call for evidence certainly hints that the long-mooted new public health licensing objective is on its way.

It is therefore crucial that as many operators as possible engage with the process and respond in writing to the call for evidence. If you would like us to assist you in framing your written evidence, please contact one of the team.