Alcohol Wholesaler Registration Scheme

ON THE ALCOHOL WHOLESALER REGISTRATION SCHEME TO BE INTRODUCED IN OCTOBER 2015 UNDER THE FINANCE ACT 2015 AND WHOLESALING OF CONTROLLED LIQUOR REGULATIONS 2005

The UK Government is introducing a registration scheme for alcohol wholesalers in order to combat alcohol fraud. Although the registration element of the scheme will apply to traditional wholesalers,  alcohol retailers such as pubs, restaurants, shops and so on are also affected because of greater obligations which will be placed on them to ensure their suppliers are registered with the scheme.  Applications for registration by existing businesses must be submitted to HMRC between 1 October 2015 and no later than 31 December 2015. New businesses must apply at least 45 days before they expect to commence trading.

The law is being changed by virtue of the Finance Act 2015 which is making changes to the Alcoholic Liquor Duties Act 1979. AS part of the registration process HMRC will conduct a “fit and proper” test which include assessment of a variety of areas including but not restricted to ensuring that:

  • there is no evidence of illicit trading
  • the applicant, or any person with an important role in the business has not previously been involved in any significant revenue non-compliance or fraud
  • there are no connections between the business, or key persons involved in the business, with other known non-compliant or fraudulent businesses
  • key persons involved in the business have no unspent criminal convictions which HMRC consider relevant – for example offences involving any dishonesty or links to organised criminal activity
  • the application is accurate and complete and there has been no attempt to deceive
  • there has not been persistent or negligent failures to comply with any HMRC record keeping requirements
  • the applicant has not previously attempted to avoid registration and traded unauthorized
  • the business has provided sufficient evidence of its commercial viability and, or, its credibility
  • there are no outstanding, unmanaged HMRC debts or a history of poor payment
  • the business has in place satisfactory due diligence procedures to protect it from trading in illicit supply chains

Looking slightly further forward, as of 1 April 2017 all alcohol businesses will have a legal duty to ensure that their suppliers are properly registered under this scheme. This will require contractual provisions to be inserted into supplier contracts. The provision is somewhat similar to that already adopted by the UK Gambling Commission which requires confirmation from persons seeking an Operating Licence that they third party businesses they will contract with are themselves licensed if necessary (eg gaming machine supplier companies).

The scheme is supplemented by regulations connected to the Alcoholic Liquor Duties Act 1979, namely the Wholesaling of Controlled Liquor Regulations 2015 (SI 2015/1516). The regulations require affected businesses to complete the statutory application. The definition of sales which are treated as controlled liquor are as follows:

Sales treated as sales of controlled liquor
9. For the purposes of Part 6A of the Act, a sale is to be treated as a sale of controlled liquor if—
(a) the sale of the liquor is made at a time before the excise duty point for that liquor falls;
and
(b) in relation to that sale, the purchaser takes delivery of the liquor on or after the excise duty point.

Section 54 of the Finance Act 2015 makes provision for exceptions to the requirement to register by introducing a new s.88A(3)(d) to the 1979 Act which states:

(3)Controlled liquor is sold “wholesale” if—
(a)the sale is of any quantity of the liquor,
(b)the seller is carrying on a trade or business and the sale is made in the course of that trade or business,
(c)the sale is to a buyer carrying on a trade or business, for sale or supply in the course of that trade or business, and
(d)the sale is not an incidental sale, a group sale or an excluded sale,
and a reference to buying controlled liquor wholesale is to be read accordingly.

The reference to an “incidental” sale above covers off licence alcohol retailers who may make the occasional trade sale. The effect of this is that licensed shops and supermarkets or even pubs who make the occasional sale to other licensed business will not be caught by the regulations and therefore not require to register as a wholesaler. The explanatory notes to the Finance Act confirm: “an incidental sale [i]s a wholesale sale made by an authorised retailer that is incidental to its retail sales. An authorised retail sale is one that is made in accordance with the requirements under a retailer’s alcohol licence or similar authorisation“.

Any wholesaler businesses should take appropriate advice immediately in order to have their registration prepared lodged before 31 December 2015. Retailers should also start to gear up for ensuring their supplier contracts will be amended prior to 1 April 2017.

If you require guidance or advice on this scheme please contact me at stephen.mcgowan@tltsolicitors.com.

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Mobile Street Trader Standards – Scottish Government Consultation

SOME OBSERVATIONS ON THE SCOTTISH GOVERNMENT CONSULTATION CONCERNING MOBILE STREET TRADER FOOD HYGIENE STANDARDS

The Scottish Government has now released its consultation concerning food hygiene standards for mobile street traders. The consultation can be accessed here and the closing date for responses is 19 October 2015.

This consultation has arisen from the Regulatory Reform (Scotland) Act 2014 and in particular the duplication of red tape surrounding the issue of a food hygiene compliance certificate by local authorities in connection with the processing of applications for street traders licences under the Civic Government (Scotland) Act 1982.

Section 56 of the 2014 Act is in the following terms:

56Application for street trader’s licence: food businesses

In section 39 of the Civic Government (Scotland) Act 1982 (street traders’ licences)—

(a)in subsection (4)—

(i)for “the food ” substitute “a food”,

(ii)after “1990)” insert “mentioned in subsection (4A)”,

(b)after subsection (4) insert—

(4A)A food authority referred to in subsection (4) is a food authority in Scotland which, in respect of the activity mentioned in that subsection—

(a)has registered the establishment that carries out or intends to carry out the activity for the purposes of Article 6.2 of Regulation EC No. 852/2004 of the European Parliament and of the Council of 29 April 2004 on the hygiene of foodstuffs, or

(b)where no such food authority has registered the establishment for those purposes, a food authority which is—

(i)the licensing authority to which the application mentioned in subsection (4) in respect of the activity is made, or

(ii)another licensing authority to which an application for a street trader’s licence in respect of the activity is or has been made..

Section 56 means that a food business which has registered with a local authority can rely on an certificate of compliance issued by that authority to support an application made for a street trader licence (where the goods to be sold are food) in any other authority.

The point of all this can be summarised by reference to paragraph 3 of this consultation which is a useful summary: “Business has provided examples of growth being constrained or unnecessary burdens being placed on them from inconsistent application of regulation. One complaint from a food business and its trade association concerned the inconsistent application of standards in respect of street trading vehicles which operate in different local authority areas. Under the Civic Government (Scotland) Act 1982 for the purposes of a street trader’s licence application a mobile food business required a certificate of compliance from the food authority in which the application is being made. As a result mobile food vans had to be inspected separately by each authority in which the business wished to operate in order to obtain a certificate. This duplication of effort costs businesses and local authorities time and money.” An enlightened approach from our friends at the Scottish Parliament then, looking to assist businesses by cutting out this sort of duplication. I have clients who will be delighted at this, irked as they are that their mobile food van is passed with flying colours in licensing authority A, yet does not cut the mustard in licensing authority B.

The Consultation then is about introducing a national standard to underpin this approach and what those standards should be, as well as the technical processes behind this. The draft standards have been developed by The Scottish Food Enforcement Liaison Committee (SFELC).  Licensing practitioners will wish to note the requirement to “renew” the certificate of compliance after a certain period based on the type of business. There are four categories outlined. In all cases the certificate is required to be renewed annually with the exception of a business selling tea or coffee only, wrapped food only, raw fruit and vegetables only, wet fish only, or any combination of these; in which case the certificate can be renewed triennially. Note that this renewal period may or may not coincide with the life of the licence itself. Some authorities only issue annual licences. Others offer a licence which lasts 1, 2 or 3 years. Licence holders and their agents will do well to remember the different “renewal dates” which could apply to the licence and the certificate of compliance. There is also the introduction of a statutory form for the compliance certificate which includes a photograph of the mobile unit/kiosk/van. In addition to these process requirements, the consultation is primarily about minimum standards for the following:

  • Water supply and ice
  • Wash hand basins
  • Sinks
  • Food equipment and surfaces
  • Cleaning and disinfection procedures
  • Personal hygiene of staff
  • Food protection/anti-contamination measures
  • Pest Control
  • Waste Control
  • Temperature Control
  • Minimum staff training requirements
  • Ventilation
  • Lighting
  • Food Safety management systems (HACCP Principles)
  • Special requirements for the sale of Ice Cream

The consultation seeks views on whether the proposed standards are clear and meet safety requirements, whether anything should be added, and on the scheme generally. As this process will ultimately underpin every food street trader licence I urge affected businesses to respond to the consultation and make their views known.

Those seeking advice or assistance can contact me at stephen.mcgowan@tltsolicitors.com.

 

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Certain SWP Machines to become Cat D’s

ON GAMBLING COMMISSION PROPOSALS TO RECLASSIFY CERTAIN TYPES OF GAMING MACHINES CURRENTLY TREATED AS “SKILLS WITH PRIZES” MEANING A LICENCE OR PERMIT MAY BE REQUIRED 

The Gambling Commission has confirmed, after consultation with industry and machine suppliers, that certain types of amusement machines which are currently treated as Skills with Prizes machines (SWPs) do in fact contain an element of chance as well as skill and therefore should be treated as a gambling machine.

The machines which will be caught by this re-classification provide the player with an apparatus to manipulate which may win them a prize such as by cutting a cord from which a soft toy is dangling, or inserting a key into a lock to “unlock” the prize. Common examples of these machines are branded “Butcher’s Cut” or “Keymaster” machines. I have also played a similar “Barber’s Cut” machine myself recently and despite a couple of decent attempts was unable to win the Minion I was after. It has been decided that these machines will be classified as Category D under the same definition as Crane grabbers.

The legal definition for “Crane Grab” style machines is found in the Categories of Gaming Machine (Amendment) Regulations 2009 and the Commission has decreed that these alternative SWP machines fall under that definition.

The effect of this is that operators who provide these machines may now require an appropriate licence and/or permit. Suppliers of these machines will need to have an appropriate operating licence from the Gambling Commission, and traders or operators who have these machines in use may require a licence or permit from the licensing board. Some operators may already have a licence or permit which would cover this change but I advise anyone who uses the machines to seek advice.

The Gambling commission has given affected businesses until 31 August 2015 to lodge any licence or permit application.

This change may also affect pubs and alcohol licensed premises. Pubs can currently use these machines without any licence or permit on the basis they are SWPs. If pubs wish to keep these machines they would now fall under the automatic entitlement or Licensed Premises Gaming Machine Permit regime because of their re-classification as gaming machines. This may affect machine numbers. For example, automatic entitlement allows up to 2 Category C or D machines. If a pub or alcohol licensed premises has 2 Category D machines (typical pub fruit machines) and in addition a “Butcher’s Cut” machine, then as of 31 August 2015 that machine could not be used, unless an application for a Licensed Premises Gaming Machine Permit to allow 3 machines had been lodged with the licensing board.

A pub which has one or two of these machines without either automatic entitlement or a permit, and no other machines, would require to adopt the automatic entitlement which would allow up to 2 machines of either C or D as noted above.

Businesses using the Butcher’s Cut/Barber’s Cut/Keymaster machines should therefore seek advice now to ensure if they do need to have an application lodged, it is in by 31 August 2015.

 

 

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Transfers and Consent: a new Batch of Gremlins

ON THE PROPOSED SECTION 33A OF THE AIR WEAPONS AND LICENSING (SCOTLAND) BILL TO ALLOW “ANY PERSON” TO SEEK TRANSFER OF A PREMISES LICENCE UNDER THE LICENSING (SCOTLAND) ACT 2005

At Stage 2 of the Air Weapons and Licensing (Scotland) Bill, the Government inserted an amendment to introduce a new way of transferring a licence, under a new s.33A of the Act. This provision seeks to allow “any person” to apply to transfer a licence. This comes as a result of several years worth of grief from just about everyone involved in the licensing system in Scotland that the terms of s.34 of the 2005 Act are a dog’s breakfast and create considerable technical and practical difficulties. This culminated in submissions to the Parliament from the Law Society of Scotland licensing sub-committee and Institute of Licensing to plead for s.34 to be revised. I attended the Parliament in person to give evidence on behalf of the Institute of Licensing and raised the issue of transfers to the Local Government and Regeneration Committee face to face.

Someone listened and has sought to make a difference which is most welcome. We now have the proposed s.33A which dispenses with s.34 altogether and creates a new regime which I have repeated in full as follows:

48A Transfer of premises licences
(1) The 2005 Act is amended as follows.
(2) In section 33 (transfer of premises licence on application of licence holder)—(a) for subsections (1) to (3) substitute—
(1) Any person, other than an individual under the age of 18, may apply to the appropriate Licensing Board for the transfer of a premises licence to the person (such person being referred to in this section and section 33A as the “transferee”).
(1A) An application under subsection (1) must—
(a) specify the date on which the transfer is to take effect, and
(b) be accompanied by—
(i) the premises licence to which the application relates or, if that is not practicable, a statement of the reasons for failure to produce the licence, and
(ii) a written statement signed by the holder of the premises licence consenting to its transfer to the transferee (a “consent statement”) or, if that is not practicable, a statement of the reasons for failure to obtain the licence holder’s written consent.”,
(b) in subsection (4), after “constable” insert “, unless the Board must refuse the application under subsection (8A)”,
(c) in subsection (8), before paragraph (a) insert—
(za) the application is accompanied by a consent statement referred to in subsection (1A)(b)(ii),”
(d) after subsection (8) insert—
(8A) If the application is not accompanied by a consent statement referred to in subsection (1A)(b)(ii), the Board must refuse the application, unless the Board dispenses with the requirement for a consent statement under section 33A(4).”.
(3) The title of section 33 becomes ” Application for transfer of premises licence“.
(4) After section 33 insert—

33A Application for transfer: further provision

(1) This section applies where a Licensing Board receives an application under section 33(1) for the transfer of a premises licence.
(2) The Board must take all reasonable steps to give notice of the application to the premises licence holder.
(3) Subsection (4) applies where the application is not accompanied by a consent statement referred to in section 33(1A)(b)(ii).
(4) The Board may dispense with the requirement for a consent statement if satisfied that the transferee has taken all reasonable steps to contact the premises licence holder in order to obtain consent but has received no response.
(5) Where the Board decides under subsection (4) not to dispense with the requirement for a consent statement, the Board must give notice of the decision, and of the reasons for it, to the transferee.
(6) Where the Board decides under subsection (4) to dispense with the requirement for a consent statement the Board must hold a hearing under section 33(9) for the purpose of considering and determining the application.
(7) Where the Board grants the application, the transfer of the licence takes effect—
(a) on the date specified in the application in accordance with section 33(1A)(a), or
(b) where the Board grants the application after that date, on such date as the Board may determine.”.
(5) Section 34 (transfer on application of person other than licence holder) is repealed.

Licensing practitioners were encouraged that our pleas over transfers had been heard. Disappointed that submissions on surrender and provisional licences had been misunderstood and rebuffed, but still viewing this as a “win”. It may seem ungracious then to be critical of the proposed solution; but some of the gremlins we sought to despatch will not only continue to titter and cry havoc, but indeed the new s.33A may have the same impact as feeding such little monsters after midnight!

The crux of this whole issue is about securing the transfer of a licence to someone who has a legitimate right to hold that licence. Invariably, this is someone who has a legal right to occupy the premises. Section 33A creates an obligation to supply a letter of consent from an existing licensee and this is where the fun begins.

(A couple of asides: It should be noted that this is new in terms of primary legislation for alcohol licensing. Although in practice letters of consent are ubiquitous, there is no legal requirement for them. Secondly, the wording has been lifted from the Gambling Act 2005 but without regard to the interim effect procedure that Act allows, nor the “remedy” that Act caters for where a licence can be revoked where it is no longer used by the current licensee, so that a new one can be sought. The use of the Gambling Act wording is odd when the Government could have just as easily used the wording from the Licensing Act 2003 which would have avoided this additional drama)

THE SECTION 33A GREMLINS

Gremlin One: Any application for transfer under s.33A MUST be accompanied by the letter of consent or a statement as to the reasons for failure to obtain it. So even from the off there is a problem. Could a clerk reject an application as incompetent if the consent letter is not within, but a covering letter says it will be delivered under separate cover (which is not uncommon)?

Gremlin Two: The idea of specifying a transfer date is bound to cause a chuckle or two in some quarters. Licensing board processing times vary immensely so that idea that a date could be proposed, which the board would have regard to, is ignorant of that and indeed of conveyancing practice. And remember that under the same Bill boards will have 9 months to process a transfer! (Remember that this is lifted from the Gambling Act 2005, where specifying a date makes more sense when there is a provision for interim effect)

Stripe the Gremlin*: The big bad difficulty is that the proposals only allow a board to grant the transfer absent consent if the applicant has failed to contact the existing licence holder. What if the existing licence has been contacted but refuses to give consent out of spite or cannot give consent because they simply unable to do so?

Here are some examples.

Example A

A licence holder becomes insolvent. The insolvency practitioner is required to achieve best results for the creditors and that is likely to be by selling the business. The business cannot operate going forward without the licence and therefore the IP needs control of that licence. But it is the insolvent person or entity who, under s.33A as proposed, holds all the cards as it is they who hold the licence! The bankrupt could demand a “ransom” for the letter of consent which may expunge any value in the insolvency meaning any creditors will be even further out of pocket. Yet the licence holder no longer has legal capacity because of the insolvency or a right to the business or the premises from which the business operates. This perversely could find the insolvency practitioner having to pay the person who has become insolvent for the letter of consent. Section 33A leaves no room for the clerk’s discretion as to whether the IP could “step into the shoes” of the insolvent person and could result in arguments under insolvency law. These cases can be very messy. Why not have a clear and simple solution?

Example B

A tenant leases a shop from a bank, who own the building within which the shop is situated. The tenant is evicted by the bank as he has (a) not paid the rent [or] (b) been caught selling alcohol to children [or] (c) any number of other reasons. He now has no legal right to occupy the premises. The bank lines up another tenant and a lease is entered into. The old tenant, who no longer has any right or say over the property, with-holds consent out of spite. The bank, or indeed the new tenant, cannot get the licence and can never get the licence because the old tenant is wilfully with-holding consent. What happens now? There is no remedy for the bank or the new tenant. They cannot apply for a new licence because you cannot have two licences for one premises. You are then left with having to get the original licence revoked. A review request much be based on a breach of conditions or one of the five licensing objectives. Which objective is engaged here?

Example C

A licence holder is declared mentally incapable as a result of a medical condition. That person cannot use s.33 of the Act as they have no legal capacity to do so, and someone seeking to take over the licence under the new s.33A cannot get consent from that personfor the same reason. What then? We are left with common law arguments about whether an appointed guardian can make a s.33 application?

Conclusion: a Further Appeal to the Government

In each of these examples each clerk and each board will have their own views. Why not just sort it out on the face of the Act to avoid this sort of legal complexity and headache? In short compass, there should be a power for a licensing board to allow a transfer absent consent where they are satisfied that is correct to do so. Licensing boards across Scotland already allow transfers absent consent where it is justifiable, for example where proof of right to occupy is produced such as a land certificate or lease when a landlord is retrieving a licence from an erstwhile tenant who has disappeared into the night.

*For those unfamiliar with the reference Stripe is the name of the mohican boasting “leader” of the little movie monsters and therefore the protagonist of most of their bedevilment.

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What the Doctor ordered: More licensing laws?

ON THE MEMBERS BILL INTRODUCED BY LABOURS DR RICHARD SIMPSON: THE ALCOHOL (LICENSING, PUBLIC HEALTH AND CRIMINAL JUSTICE) (SCOTLAND) BILL

No sooner had licensing commentators and practitioners gulped down the Stage 1 Report of the Air Weapons and Licensing (Scotland) Bill, with such indigestible morsels as a 6th licensing objective, were we faced with yet another proposed Bill which seeks to introduce yet further licensing laws! The sheer volume of legislation, and proposed legislation, surrounding alcohol now beggars belief. I once described licensing law at some conference as akin to a Mobius strip – as so-called “new” laws are introduced along the progress of the strip they in fact mirror so much of what has been tried before, that advancement of licensing laws becomes tautologous. But now perhaps it might be better to view the Scottish licensing laws as akin to the expanding universe theorem – continous growth in infinite directions.

This new Bill is, in fact, not a surprise to those of us who keep a close on eye on Parliamentary machinations, coming as it does from a Labour consultation which was a response to the singularity of the Alcohol (Minimum Pricing) Scotland Act 2012 and percived failings of the Alcohol etc (Scotland) Act 2010. My licensing friend Caroline Loudon (@CKPLoudon) and I provided the response to this consultation on behalf of the Law Society of Scotland licensing sub-committee.

The Bill can be accessed here: http://www.scottish.parliament.uk/S4_Bills/Alcohol%20(Licensing%20Public%20Health%20and%20Criminal%20Justice)%20(Scotland)%20Bill/b65s4-introd.pdf.

The “Shifting the Culture” consultation document from March 2012 can be accessed here: http://www.scottish.parliament.uk/S4_MembersBills/20120313_Shifting_the_Culture_Alcohol_Bill_Consultation_Final_version.pdf.

I have taken a look at licensing law retailed proposals for this Bill below. This article therefore does not consider education measures or general criminal justice measures such as the drink banning orders.

Mandatory Licence conditions concerning “Multipacks”

This aspect of the Bill addresses what most observed was a glaring hole in the mandatory condition introduced under the Alcohol etc (Scotland) Act 2010 to ban discounted multipack deals. The “ban” did not apply to multiples of multi-packs, only multiples of single items. In other words, if a single can of lager was for sale, then a four pack would have to be priced at 4 x the individual can; but 3 x the four pack could be sold at a discounted rate. This created an inverse incentive and was yet another example of poor drafting in the world of licensing.

Ban on caffeinated alcoholic products

The Bill proposes to introduce a ban on “ready mixed” caffeinated alcoholic products. The maximum level of caffeine is to be set by way of regulations. “Ready mixed” is defined as a product supplied to the premises (not the customer) in a sealed container. This also appears to apply where two or more containers are packaged together and supplied to the premises and the contents are designed to be combined. Depending on the level of caffeine set by regulations, the reality of this proposal is that it seeks to bring about a ban of a well known fortified wine, at least in its current format. The level suggested in the original paper was 150mg. This proposal, if the Bill were to be enacted, is likely to face challenge from the manufacturers or distributors of affected products on the basis of EU competition law and those affected may also be interested by a recent English magistrates decision (see here: http://www.thisismoney.co.uk/money/news/article-3025796/Ban-high-strength-alcohol-lead-huge-payouts.html and here: http://www.offlicencenews.co.uk/news/fullstory.php/aid/14881/Landmark_case_could_open_floodgates_for_councils_to_be_sued_over_Reducing_the_Strength_schemes.html) concerning the banning of higher strength alcohol products through mandatory local schemes, with those affected now considering compensation claims. It is not envisaged, as the Bill is currently drafted, that this ban would apply to drinks mixed at the bar such as an espresso martini or an Irish coffee.

Ban on increasing age of sale to 21

This proposal is interesting in that it comes just as the news is full of headlines about the NHS proposal to raise the age of off sales to 21 (see here: http://www.dailymail.co.uk/news/article-3026019/Ban-drinking-21-say-health-chiefs-Scots-consider-draconian-halt-surge-hospital-admissions.html). This proposal is designed to frustrate that! The Alcohol etc. (Scotland) Act 2010 created a law preventing licensing boards from adopting a blanket policy increasing the off sale age to 21 for their area. However, it is still open to a board to do so based on an individual, targeted basis such as through a licensing review hearing. Dr Simpson believes that this is a form of age discrimination and the proposal here is to stop boards from raising the age of sale to 21 regardless of the circumstances, on the basis 18 to 20 year olds are responsible adults and the product is legally available to them. I do question the timing of this NHS proposal given that the prevailing trend for young drinkers is to continue to drink less, and the 18 to 25 demographic is the one with the biggest decline in alcohol consumption as attitudes change (see here: http://www.theguardian.com/society/2015/feb/13/teetotallers-on-rise-in-uk-one-in-five-dont-drink, here: http://www.bbc.co.uk/news/magazine-25652991 and here: http://www.bbc.co.uk/news/health-31452735). From a legal perspective, it does seem to be at least odd that I could be a premises and personal licence holder and therefore selling and supplying alcohol to others at the age of 18, yet not be legally allowed to consume alcohol till 21. Well rehearsed arguments about serving ones country, marrying, driving, voting and so on would also apply.

Bottle Marking Schemes

The idea here is to allow the police, and no one else, to ask a licensing board to impose a bottle marking condition on off sales premises the purpose of which would be to require the retailer to mark his containers so that they could be identified at some later date, for example if found in the possession of someone under age causing trouble in a public park. The procedure would mirror the s.27A imposition or variation of conditions by the licensing board’s own volition. The s.27A procedure was criticised when introduced as there was no right of appeal for the licence holder should a condition be imposed. The policy behind such schemes is to identify whether retailers are selling alcohol to people who should not have it. If an under age person is found with a marked bottle, the idea is that this could then be used against the retailer whose mark is on the bottle as “evidence”. I do have some issues with this approach. There is a causality question; and a debate to had over the quality of evidence. Statements would have to be taken and with no one under oath or cross-examined in a licensing hearing there is room for error. There is also an issue over who is being targeted as the “villain”: if the alcohol has found its way to someone under age from an adult, then is there not a question as to whether blame should be apportioned to the retailer or to the adult? Proxy sales are of course illegal, and responsible small businesses should refuse sales to adults if they are concerned that the adult is going to give or re-sell the alcohol to someone under age. But unless there is a group of youths nearby or the trader has local knowledge, how is he to divine my clandestine intent? If the markings are visible, might that tarnish a trader if discarded bottles are discovered in public places, and would that be fair or proportionate? There are some issues to think through on this one.

Increased Neighbour Notification for Licence Applications

The original Labour proposal in “Shifting the Culture” was to re-introduce licence renewals so that the public would have a greater say. That appears to have bitten the dust and instead Dr Simpson’s Bill favours increasing the amount of neighbour notification at the time of a new licence or major variation application. The proposal here is to increase the notification requirement from the current 4m up to 50m from the boundary of the premises. This would generate a significant burden on licensing board staff whose job it is to identify all these possible residences and then send letters. The number of letters would increased significantly in certain areas such as inner cities. This would inevitably generate much more objections to applications.  At the same time, the Bill proposes doubling the time period for site notice display from 21 days to 42 days. At a time when the Parliament is looking at reducing red-tape, this is most unwelcome. The delays in processing licence applications are already causing considerable difficulty in certain board areas. Doubling the site notice period will create further delay and burden.

Restrictions on Alcohol Advertising near Schools etc

This part of the Bill proposes a ban on alcohol advertising within 200 metres of schools, nurseries/creches, or outdoor play areas for children. This has echoes of the laws introduced in the Alcohol etc. Scotland Act 2010 which introduced a similar proposal for banning adverts outside of licensed premises, designed to limit adverts such as large hoardings at the entrances to supermarket car parks. This proposal would ban any alcohol advertising within 200 metres of any boundary of the affected premises. This would seemingly capture billboards and the like, perhaps facing a school playground, but would also capture alcohol adverts on bus shelters and other fixed apparatus. It does, however, recognise that applying such a ban to licensed premises within that 200 metre radius be unworkable and there are exemptions in the Bill to deal with this.

Restrictions on Alcohol Advertising within licensed premises

This proposal would create a new ban on alcohol advertising within a licensed premises which is a off sales which forms part of a wider retail premises. The explanatory notes say: “There is currently nothing to prevent supermarkets or other retail outlets from advertising alcoholic products throughout their premises, even though only a specific part of those premises is actually licensed (to sell alcohol for consumption off the premises). As a consequence, it is possible that people in, for example, the tea and coffee aisle may be encouraged to take advantage of drinks promotions, having not originally intended to purchase any alcohol“. I do find it odd that 18 to 20 year olds are to be treated as responsible adults in relation to the “under 21 rule” discussed above; yet that same logic cannot be said to apply to the general adult population in relation to being exposed to an advert for alcohol within a retail premises.  I also wonder if this proposal does not amount to a duplication – even if to an extent – of the mandatory condition introduced at Schedule 3 Paragraph 13 (1B) which prohibits “drinks promotions” from taking place other than in the designated alcohol display areas. It may be deemed that there is a difference between “alcohol advertising” and “drinks promotions” but whether this distinction is facile is a separate argument to the “volume” point I have made on several occasions on this blog: in this case, I would argue that it does not help the trade or the public to have rules on “drinks promotions” and separate rules on “alcohol advertising”.

This overlap or duplication adds to the sheer amount of law in this area, in addition to its general infamy as regards interpretation and practicality (see my comments above about the “loophole” in previous attempts at rules on multipacks), and is a wider issue that must at some level of Government bear scrutiny.

This Bill, if passed, would become the 6th primary peice of legislation to impact on licensing law in Scotland since 2009. Surely this is beyond parody? How can a licence holder or member of the public possibly be expected to grasp the law when it is split over:

  • The Licensing (Scotland) Act 2005
  • The Criminal Justice and Licensing (Scotland) Act 2010
  • The Alcohol etc. (Scotland) Act 2010
  • The Alcohol (Minimum Pricing) (Scotland) Act 2012 (although this is yet to come into force)
  • The Air Weapons and Licensing (Scotland) Act 2015

…and now possibly the Alcohol (Licensing, Public Health and Criminal Justice) Act 2015?

And this list does not include the 35 or so secondary statutory instruments, 32 or so local licensing board policies, and the ongoing caselaw! And then consider that this has all been brought in since only 2009.

One of the original aims of the 2005 Act was to modernise the antiquainted elements of the Licensing (Scotland) Act 1976. I do often wonder what Gordon Nicholson would make of the evolution of the licensing laws which his Committee bequeathed in part, as well as the pace of such reform.

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Air Weapons and Licensing Bill Stage 1 Report: Lost Causes and Unintended Consequences

A CRITIQUE OF THE SCOTTISH PARLIAMENT LOCAL GOVERNMENT AND REGENERATION COMMITTEE STAGE 1 REPORT ON THE AIR WEAPONS AND LICENSING (SCOTLAND) BILL

Back in December 2014 I attended at the Scottish Parliament to give evidence to the Local Government and Regeneration Committee who are steering the Air Weapons and Licensing (Scotland) Bill. The progress of the Bill can be tracked here. I was to represent the view of the Institute of Licensing on a number of issues, most if not all of which were broadly aligned to those expressed by the Law Society of Scotland licensing sub-committee. I was encouraged at the opportunity I was given to raise a modest selection of very real practical issues surrounding the Licensing (Scotland) Act 2005 and I spoke of this positivity in an article for the Scottish Licensed Trade News on 8 January 2015.

I was therefore looking forward to the Stage 1 report which was published last week. The full report can be accessed here. A number of very interesting and some controversial items have come out of the report. The Report itself can be treated as a list of recommendations, having heard evidence, from the Committee back to Parliament to take forward as they see fit. It is therefore considered to be influential but Parliament is not bound by these recommendations. The following is my analysis of the report (which, I should state, ignores the proposals on air weapons and metal dealers).

ALCOHOL LICENSING

The life of a licensing policy statement

It has been proposed that licensing board’s triennial statement of licensing policy should have a longer shelf life, namely 5 years. This appears to have been requested by licensing boards themselves with the example of a certain board being, in its view, “hamstrung” by the policy of its predecessors following council elections. Making the policy 5 years and tying the dates to the council term may prevent that type of situation. In addition, having a policy in place for 5 years means that the licensing system will inevitably become more rigid.

Overprovision

When I appeared, I think that this was the first topic I was asked about notwithstanding the Institute of Licensing response to the consultation did not discuss the topic in any real sense. It was clearly an issue exercising minds. The Bill proposes to allow licensing boards to set their whole area as an “overprovision zone” (although many think the law allows this anyway) and also to take licensed hours into account when assessing overprovision. The Committee endorses these but goes two steps further and suggests that the assessment should take club premises and occasional licences into account. The inexorable logic of inclusion when it comes to club premises may be all too apparent and those who have read the evidential sessions will know the Committee was greatly concerned about the role and impact of club premises within the licensing system. Adding club premises to overprovision assessments should not be overly taxing for a board.

Occasional licences on the other hand will be a nightmare for boards to contend with. Tens of thousands of these licences are issued by licensing boards and deal everything from a PTA cheese and wine evening to T in the Park. Assessing and understanding that level of information within numbers simply cannot be achieved with alacrity, nor can the geographical interplay of occasional and full premises licences. The inclusion of occasional licences within overprovision assessments is a task I do not envy and I wonder just how robust or transparent those assessments can possibly be. I also wonder how much use this level of information will be when considering whether to grant a new licence.

Interestingly, the Committee appears to hold some view that licensing boards are timid, cowering under their own policies when it comes to being faced with an appeal. They suggest that more needs to be done to make policy rigorous to prevent succesful appeals. That is well and good, but it misses the fundamental point that if a policy is unlawful for reasons other than the consultation process, then the robustness of that policy in terms of consultation is no shield. In addition, I find it odd that appeals be painted as some over-bearing menace when the reality is that appeals are few and far between because most operators/applicants simply cannot afford the process.

A 6th Licensing Objective?

This recommendation is the one which has made the front page of national newspapers in the last several days. The report says: “We also recommend, given the overwhelming evidence we received of harm and links to disorder from overconsumption, an additional objective be added to include the reduction of consumption.” So there we have it, a sixth licensing objective which would presumably read “Reducing the consumption of alcohol”. I have described this objective as oxymoronic. It cannot be correct that the law allows a board to license the sale of alcohol, the effect of which is to create legal duty upon the licensee to reduce consumption. How can this possibly work when the central purpose of a licence is to allow someone to sell alcohol? This is fundamentally unsound.

The issue here is irresponsible sale and consumption of alcohol. The Committee heard at length on these issues and have reacted. I don’t think they have fully considered the ramifications of a sixth licensing objective in these terms. How can it possibly be measured or evidenced? How can a licensee actually reduce consumption of the product he is licensed to actively sell? Does the barman tell the customer he will only serve half-pints? Does the checkout assistant suggest a home visit to see how much of the 12 bottles of wine is consumed, when and by whom? The mischief being attacked here is certainly important but this would be bad law and create a legal obligation on a trade to put itself out of business! This cannot be correct and I hope the proposal withers on the vine at Stage 2 when amendments are proposed. 

In addition to this, it seems unsound to create further obligations which strike at irresponsibility when there are plenty of existing laws and offences. Does not the existing licensing objective of “Protecting and Improving Public Health” deal with overconsumption and irresponsibility? There are any number of “drunkenness” offences under the Act which also already deal with this issue: sale of alcohol to a drunk, sale of alcohol to someone who is going to give it to a drunk, premises manager and staff not to be drunk in relevant premises, a drunk person cannot enter a licensed premises, and so on.

Police Intelligence

I spoke about the issue of “unseen and unknown” police intelligence at licensing heards and warned that there was a danger that decisions based on this type of “evidence” would corrupt inherent legal principles of natural justice and the right to a fair trial. The Committee’s comment on this element is to say: “We do not consider that police intelligence in a raw form should be made available to Boards. It is a matter for the Police to make available relevant information to Boards in a manner consistent with ECHR considerations.” I don’t think that really takes us anywhere on this point. It is a matter for police to seek to present what information they wish; it is for agents to oppose to that if they deem it appropriate; and it is for licensing boards to assess what weight they attribute to the police intelligence in reaching a decision. That will remain the case.

Transfers of Licences

Out of all the technical issues bedevilling solicitors and clerks across the county, the one which a solid majority would agree is top of the hit list is the terrible mess of provisions concerning the transfer of licences, especially s.34 applications. I spoke about this at the Parliament and provided an ancillary note highlighting the practical examples as to why s.34 of the 2005 Act is woeful. This is included verbatim in the Stage 1 report. However, instead of making any bold recommendations like they have in other areas, the Committee has completely side-stepped the issue. There is no recommendation on transfers at all; and the final line on the matter is: “We asked the Scottish Government for their views on teach of the above issues and they said they continued to consider the concerns raised“. How utterly frustrating. The issues have been on the tables for years. What is there left to consider? The Law Society of Scotland has been raising the issue of transfers since and before the Act came into force. The Law Society has even offered to help redraft the relevant sections of the Act. Despite these most recent attempts both the Society and now the Institute have been rebuffed.

Surrender of Licences

Another “request” from both the Law Society and the Institute was to look at the legal status of surrendered licences. Under the old 1976 Act a surrendered licence could be re-activated by way of a transfer, so that a frustrated landlord could retrieve a licence surrendered out of spite by his tenant. The Committee’s view on this is: “We have heard no evidence to convince us that businesses should be able to avoid current regulations designed for safety or other reasons through this method“. That, of course, misses the point entirely. A premises in this situation would have been trading since at least 2009 and if there were safety issues they would have been dealt with under appropriate legislation: licensing or otherwise. The “safety” regulations referred to themselves do not require older buildings to meet current laws! If that were so half of Scotland’s buildings would close. This appears to be a lost cause but it is frustrating that the central point has not been understood. The Committee say elsewhere: “We asked the Scottish Government for their views [on surrenders] and they said the proposal had the ‘potential to undermine facets of the existing regime’. They considered the proposal would not be widely supported by others“. There is no further information given about which facets of the regime would be undermined. The Law Society of Scotland and Institute of Licensing represent between them licensing solicitors and licensing practitioners of both local authorities and private practice all over Scotland: I would consider that “wide support”.

Site-only Provisional Licences

When I attended Parliament I had three requests to make of the Committee: to consider transfers, surrender, and site only provisionals. All three were discussed. As you will note above, any modification to the laws on transfer appear to have been punted into the legislative long-grass, and the surrender issue rebuffed. Perhaps third time lucky with the much missed “site only” provisional licences? The report says: “We asked the Scottish Government for their views on this issue and they indicated the proposal had the potential to ‘undermine facets of the existing regime’. They considered they would not be widely supported by others“. Again there is no further detail. The Committee, in their recommendations, rejected the re-introduction of site only provisional licences and say: “We consider greater clarity within overprovision statements and procedures thereunder should provide the necessary information required by developers. We note for example the effect of recent business decisions made by large retail groups not to develop sites. They could under these proposals hold these types of licenses for a considerable period before trading commences. This could impact on other businesses seeking licences during the interim period between a grant and sales commencing.”

Lets unpick that a little. The Committee appears to misjudge what information developers need. The information available to them in terms of which areas may be covered by overprovision zones is already available. They can already judge where to make an application. That is not the issue! The issue is that the Act will not let them lodge an application unless they have full layout plans. The site only provisional application, which would allow an application to be lodged but without full layout plans, is a proposal unconnected to the development of more clarity within overprovision assessments. This response shows a poor understanding of the licensing system. They also misunderstand the fundamental process of applications before a board, which is very much “each on it’s own merits” and first come first served. It also appears to focus on the idea that this proposal is designed to help developers of large retail premises: but this “route” would apply equally to the small businessman who wants to put a bar or restaurant into a dis-used high street premises, for example.

It appears there is no room at the inn for site only provisional licences so this is another lost cause.

Minor and Major Variations

There is no mention of amending this aspect of the Act in the Bill. However, the Committee have been exercised to recommend: “the Scottish Government urgently review the types of applications falling into each of these categories with a view to ensuring local residents have adequate opportunity to make representations about variations which might adversely affect them. We expect the revised guidance to enhance the rights of residents to make representation and remove existing anomalies as reported to us.” This comes from evidence from the clerk of West Lothian Licensing Board who fairly raised the issue of variations which should be minor, and are treated as major, and vice versa. The Committee has focused on ensuring local residents have better engagement. This may mean a “re-draft” when it comes to list of approved “minor variation” applications but this whole topic is a minefield. There are certainly some changes to a licence which are so negligible it is a nonsense they have to face a major variation and the cost and delay of that. On the other hand, it is suggested that some “layout change” variations should be major variations. If the Parliament carries this forward it would require a working group populated by those who understand the technical processes of these applications.

LSOs and Gambling Premises

Here is a hoary old chestnut! I have been discussing the issue of gambling enforcement for some time on this blog going back to July 2012 if not before. The Committee have suggested that Parliament close the loophole pertaining to gambling enforcement and “licensing authority” staff under the Gambling Act 2005. That is music to my ears but is also a red herring because Holyrood has no jurisdiction on this matter! The Gambling Act 2005 is a Westminster Act and the powers lies there.

CIVIC LICENSING

Taxis and Private Hire

The Committee recommends a “full review” of taxi and private hire licensing to report back within this Parliamentary term. There is no apparent acknowldegement that the “full review” carried out as recently as 2012, called “Taxi and Private Hire Licensing: Proposals for Change“, was not fit for purpose, but there is considerable mention given to the developments of technology and how these are affecting this sector.

The Committee do appear to have understood the point made by the Law Society of Scotland and the Institute of Licensing that in relation to “capping” private hire car numbers, it is odd that this should be done by creating a test of “overprovision” when the equivalent existing test for taxis is about “unmet demand”. The Committee also endorses proposal to have “the knowledge” apply equally to private hire car drivers as well as taxi drivers.

Public Entertainment Licensing

The key item to come out of this section is the proposal to remove the current exemption to the PEL requirement for a premises which has an occasional licence. This would appear to be a reaction to evidence that it is not appropriate for large scale events to be licensed simply by way of an occasional alcohol licence and not a separate temporary public entertainment licence.

Sexual Entertainment Venue Licensing

The controversies surrounding this area will run for years, I wager. The Committee have much to say on this and make several recommendations to the Parliament to take forward with the Bill. The starting point is definitions. I and others have raised considerable concern over conflicting legal definitions under separate licensing regimes such as “sexual entertainment” vs “adult entertainment” as the two are not the same, going by the existing and proposed legal definitions. The Committee has welcomed “guidance” but would it not be better to get the legal drafting right in the first place rather than augment it with further verbosity for lawyers to argue over? They do come down on the side of firmly excluding “plays” from the need to have the SEV licence but ironically suggest the definition for a “play” be lifted from the Theatres Act 1968 – which the Bill seeks to repeal as it is considered antiquated!

The definition of “play” in the 1968 Act may also be out of date and I think it should be updated. The definition in the 1968 Act is “any dramatic peice, whether involving improvisation or not, which is given wholly or in part by one or more persons actually present and performing in which the whole or a major proportion of what is done by the person or persons performing, whether by way of speech, singing or action, involves the playing of role“. Ballets are also caught and defined separately. But these definitions must be taken together with s.2 of the Theatres Act 1968 which prohibits “presentation of obscene performances of plays”. Obscenity in this regard is something which will “tend to deprave or corrupt”. These definitions are, to my mind, archaic, and I am not sure they should be implanted into 2015 legislation.

The proposal to allow 4 performances a year without the SEV licence, which was to cover one -off events such as a strip-tease in a public house, has been roundly rejected by the Committee who suggest the exemption should be removed entirely. If this were carried forward, it would mean no premises could have such one-off performances without the SEV licence which will, of course, be incredibly difficult if not impossible to secure in the first place. It creates an issue for premises who may wish to have a burlesque themed live performance, for example, and that takes us back to the problem over definitions. The equivalent legislation in England & Wales, from which the Scottish proposals are lifted, allow for 12 unlicensed events in a calendar year.

Finally, the Committee appears to have taken on board concerns that the licensing committee of the local authority may not be best placed to license SEVs and maybe the licensing board should be the correct authority. This is on the argument that boards have historic insight into these premises as they have regulated the alcohol side of thoses buisiness for years. Although I firmly believe the board is the place for this type of licence, in the same way that gambling is, I doubt this will be taken forward at this time because the entire structure of the SEV proposal is predicated on it being a licence issued under the 1982 Act. If it were accepted that the licensing board were to be the regulator, this whole aspect of the Bill would need to be re-written.

And finally…civic licensing objectives

The Committee makes two final general recommendations. The first of these is to introduce licensing objectives to the 1982 Act akin to the 2005 Act together with processes for review and so on, and the second is to transplant the 2005 Act neighbour consultation process to the 1982 Act. I am not sure if licensing staff will welcome the consultation work that they have to follow under the 2005 Act but I do see the logic in introducing a better process to the 1982 Act which I do feel is now outdated. The 1982 Act is predicated on public safety and this is perhaps an “implicit” objective of the licensing process.

Conclusions

Some of these proposals are merely adopting or endorsing the existing elements of the Bill. I have focused on the more interesting or controversial suggestions for additions or modifications. None of these are guaranteed. Some may be sponsored by MSPs at Stage 2 when formal amendments will be made. Yet further treasures could appear during the passage of the Bill as MSPs lodge amendments of their own on matters unrelated or barely to this report. Licensing is attractive to those who wish to make big statements but this is often counter-productive and generally ends with bad law. The passage of what became s.65 of the 2005 Act is one of the best (or worse) examples of this sort of Parliamentary grand-standing. The Bill has attracted considerable headlines so far. It has some way to go.

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The Belfast Report: Licensing across the Water

THOUGHTS ON PROPOSED LICENSING REFORM IN NORTHERN IRELAND

I was privileged to attend the Belfast Licensing Committee this week having been asked to present to the councillors on the ways and wonders of Scottish licensing. Licensing in Northern Ireland could be on the verge of fundamental reform and those leading the way are looking at Scotland, England & Wales and Ireland for ideas.

Alcohol licensing in Northern Ireland sits with the courts: the local magistrates. There are on sales and off sales licences, and differentiation between what I would call public house and restaurant style premises. Interestingly, there is a cap on all new pub licences. There has not been a pub licence issues by the courts in decades, I was told, with one exception where a premises had made an error with its licence renewal.

There is no cap on restaurant licences, but these are heavily restricted: no bar counter, full table service, alcohol must be ancillary to a meal; and so on.

New pub premises cannot apply to the court for a new licence but must instead buy one from an existing operator, for a price. The licence is then transferred to the new operator but importantly the law allows the licence to be physically transferred, meaning a licence can be bought and lifted from one pub, and applied to a new build or new premises. This may be done across Northern Ireland so it is open for an operator to, for example, buy a licence in Lisburn and apply it to a premises in Belfast City centre. This creates a nationwide ‘overprovision zone’ for pubs, and a monopoly for the pub operators.

There appears to be little momentum to have alcohol licensing transferred from the courts to the local authority, as is the case across the rest of the UK; at least for now.

Entertainments and other civic licensing is a different matter. This area of licensing is firmly in the grip of the local authority and they deal with licences for entertainment, street traders and so on.

Many pub premises have an entertainment licence on top of the alcohol licence; this appears to allow later closing times. Entertainment Licences are renewed annually.

Sitting in on the Belfast licensing committee to watch them conduct their usual affairs after I had done my wee bit was an education: the process was so similar, yet different, to seeing a Scottish licensing board or committee in action. The major case of the day concerned a late opening premises whose licence renewal was objected to by a handful of residents over noise complaints.

The councillors very often referred to each other by first names which created an atmosphere of informality and ease. The licence holder sat outside the chamber even after his case had started, and was only brought in after some discussion: that part was perhaps the oddest tradition from my perspective. But now there are plans for the committee to go fully public more akin to what I am used to with Scottish hearings.

Other plans include looking at creating a premises and personal licensing regime for entertainments akin to the 2005 and 2003 Acts. The creation of licensing objectives may also feature, and certainly the Police Service of Northern Ireland are pressing for a sort of ‘prevention of crime and disorder’ objective. Other proposals included creating an online public register of licence holders and pending applications, and reforming the requirement to have annual licence renewals advertised in two local newspapers, a product of historical issues. A number of other ideas are brought in from the remainder of the UK such as provision for temporary licences or deregulation of infrequent entertainments by giving pubs, for example, the right to host three entertainment events a year at short notice without a licence.

I was struck by just how much of the city centre and surrounding infrastructure can be described as ‘new’ with significant tourist developments such as the titanic exhibit coupled with business developments and new residential buildings. At the same time, Northern Ireland is about to go through profound local government reorganisation with the number of authorities dropping to just 11. Belfast will be extended to take in two neighbouring areas, for example. With this background of development and change, perhaps it is appropriate then, that the city should also update its laws surrounding licensing to ensure they are fit for the future.

I was deeply thankful for the hospitality I was shown by councillors, licensing officers and city solicitors during the trip and was left thinking that there was something very personal and personable about the council’s approach to the way in which they do business. My thanks for the opportunity to engage and learn; and most importantly, for the opportunity to stock up on Tayto crisps.

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