ON THE DECISION IN LIDL UK GmbH v CITY OF GLASGOW LICENSING BOARD  CSIH 25, AND IN PARTICULAR THE COURT OF SESSION’S VIEWS ON “DETERRANCE”, THE FUNDAMENTAL NATURE OF A PREMISES LICENCE REVIEW, EVIDENCE AND THE IMPORTANCE OF DUE DILIGENCE
The LIDL judgement has not disappointed in so far as it will generate discussion amongst the practitioners. As with most judgements, there will supporters and detractors. The full judgement can be read here.
This is a long-awaited landmark case from the Court of Session concerning test purchase failure and suspension. A LIDL store in Glasgow failed a single test purchase. They passed a follow up test. There were no other issues before the Board. On the basis of that single test purchase failure, the Board suspended the licence for 5 days having been asked to review the licence by Strathclyde Police (as was). LIDL appealed to the sheriff court, where Sheriff Mitchell rejected the appeal and said that the Board was entitled to impose a sanction such as a suspension as a “deterrant” to ward off other licence holders from acting unlawfully. LIDL appealed to the Court of Session, and it is that judgement we now have. The case is of considerable importance because the sole matter before the Board was one failed test purchase. The licence holder, being a large organisation, had significant due diligence measures in place prior to the event, and took steps after the event to prevent it from re-occuring, which included the sacking of the manager who had made the sale.
The idea that a plainly responsible licence holder, who had correct procedures in place but had been let down by human error, should be held to account as a deterrance to others was a view I found frustrating. The original sheriff court decision was also at odds with decisions from other courts, for example in the unreported (but see  46 SLLP 6) case of Co-operative v Inverclyde Licensing Board, 8 October 2010, , in which a suspension was over-turned on appeal as “disproportionate” following a single test purchase failure, the sheriff taking the view that a written warning was the correct disposal.
Alcohol issue groups responded to the judgement in scathing terms. In an article in the Herald, Evelyn Gillan from AFS said: “An objective of licensing in Scotland is to protect the public, and selling alcohol to an underage girl is not protecting the public or the best interests of young people. But if you can’t impose sanctions against people when they break the terms of the licence, then how can you fulfil the terms of the licensing agreement? It’s just a case of businesses using their resources to mount legal cases to fight things that are actually for the public good.”
What AFS seem to want is a strict liability licensing system where there is a pre-set list of penalties which can be handed out by licensing boards regardless of individual situations or circumstances. One single failed test purchase? That’ll be 5 days, please. Two failed test purchases – 2 weeks. That sort of system is fundamentally unjust as it lumps all licence holders together, the good with the bad, and is fundamentally undemocratic as it renders obsolete any hearing to investigate the matter. Portraying this decision as the big bad alcohol industry fighting the public good is an unwelcome example of moralising. Licence holders should not be denied access to justice because they sell alcohol. They are entitled to avail themselves of the comfort of knowing that basic legal principles of fairness, natural justice, proportionality should exist in licensing decisions.
It does seem that some commentators would have nothing less than a reality which imposes 100% unassailable, gold plated compliance. That ignores the basic truth of the human condition. Mistakes can be made. Where alcohol has been sold to someone under 18 that is always regrettable. But there is stark difference between an operator who does so knowingly or glibly without recourse to the law or the detriment it may bring, compared to an operator with an incredibly robust management and system who take their duties very seriously. A reasonable licensing board should, in my view, take a solitary incidence of under age sales in the context of wider compliance, reputation, and due diligence which can potentially be demonstrated by the licence holder. To that end, the LIDL judgement is welcomed by this commentator.
It is important that the LIDL decision affirms the view that sanctions open to a Board should be considered based on the individual merits of the case “for and against” and submissions and evidence presented, and not as some wider tool of deterrance. Some readers of this blog may recall that the Kennedy case also followed this line, Sheriff Veal disagreeing with the view of Sheriff Mitchell (as discussed here).
What is perhaps even more interesting, and maybe of wider jurisprudential significance moving forward, is the interesting things the judgement has to say about the “review” process itself: “the process of review is essentially forward looking. It involves examining whether the continuance of the particular premises licence in issue, without taking any of the steps listed in section 39(2) [that is, the sanctions open to a Board eg suspension, revokation etc], would be inconsistent with endeavouring to achieve the licensing objective in question. The process of review is therefore not directed to imposing a penalty in respect of some past event which is not likely to recur to an extent liable to jeopardise the licensing objective“.
This will make for eye-opening reading for many. There is a clear statement here that the sanctions open to a Board at review should not be used to penalise for retrospective detriment, but rather where it is necessary in order to protect the licensing objectives going forward. I rather think that this will need be distilled futher before the true ramifications can be divined but on the face of it it could make a real difference to the debate and decision making process within the review hearing context.
It is also of merit in advancing the discussion of evidence in licensing: “insofar as the Chief Constable had informed the respondents of concerns respecting the prevalence of under-age drinking in the locality, there was nothing offered to show, or even to suggest, that the appellant’s shop premises had been the source of supply to the under-age drinkers in quest“. This chimes perfectly with the dicta, it seems to me, in Ask Entertainment v Aberdeen 2013 (on which I blogged here).
There are further pearls of wisdom to had from this decision. It affirms the importance of having robust and demonstrable due diligence: “Further, it is clear, not only from the Statement of Reasons issued by the respondents, but also from the terms of the transcript of the proceedings before the respondents, that the respondents accepted the existence of the appellants’ policies and procedures and that those policies and procedures were adequate, and should, if applied, have prevented sales of alcoholic drinks to a child or young person… In our opinion Sheriff Mitchell erred in not noting the absence of such criticism during the hearing before the respondents and in purporting to identify criticisms of the appellants’ practices and procedures as having been open to the respondents, notwithstanding that the respondents had made no mention on them in their Statement of Reasons“, and then later linking this into the issue of due diligence to the question of deterrance: “Plainly the appellants were not in any need of deterrence, since they had acted responsibility before Mr Singleton’s lapse and also in response to it. Imposing a penalty upon a premises licence holder who is not at fault can hardly be seen as justified by any proper notion of the deterrence of others“.
Overall it seems to me that this could be a significant decision in underscoring the operation of the 2005 Act, which remains a somewhat brattish toddler. Only time will tell.