Update | Licensing: lap-dancing venues, rights of those with an interest in licensed premises, mystery shopping

This update considers conflicting views on the availability of appeals in applications for sexual entertainment venues, the adequacy of measures seeking to protect the position of those with an interest in licensed premises and the controversial issue of test purchasing. It also reviews the latest edition of a leading licensing law textbook.

Sexual entertainment venues

Section 27 of the Police and Crime Act 2009 incorporated ‘lap dancing’ type establishments into the regulatory regime contained in Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982 by creating a new category of sex establishment, termed sexual entertainment venues (SEVs). In licensing areas that have adopted the provisions, premises that provide lap dancing and similar entertainment must apply for an SEV to continue trading. Applications have taken place around the country. Inevitably some have been refused, particularly where a licensing authority has set a limit on the number of SEVs it will grant and that cap allows for fewer establishments than those already trading.

Paragraph 12 of Schedule 3 lays out the grounds for refusal. First, the mandatory grounds which include matters such as the applicant being aged under 18 (paragraph 12(1)) and, secondly, four discretionary grounds (paragraph 12(2)(a) to (d)). These are (a) that the applicant is unsuitable to hold a licence; (b) that if granted the licence would be run by or for the benefit of an unsuitable person; (c) that the number of SEVs in the relevant locality equals or exceeds the number set by the authority; and (d) that the grant would be inappropriate having regard to the character of the locality, the use of other premises in the locality or the layout, character or condition of the premises for which the application is made.

Appeals are covered by paragraph 27. The time for appeals is 21 days beginning with the date that the applicant is ‘notified’ of the licensing committee’s decision to refuse the application. Aside from whether notification of the decision must be in writing (it is generally accepted that it does), a fundamental question has arisen on the scope and availability of the appeal process where an application has been refused on more than one of the discretionary grounds contained in paragraph12(2).

There is a general right of appeal to the magistrates’ court under paragraph 27(1) but it is specifically provided that there is no right of appeal against a decision made on one of the mandatory grounds (paragraph 27(2)) or a refusal on grounds (c) and (d) of the discretionary grounds. Thus there is an appeal against a refusal on grounds (a) and (b) but not on grounds (c) and (d) but what is the position if there is a refusal say on grounds (a), (b) and (c)? A district judge sitting at Bristol Magistrates’ Court has recently refused to accept jurisdiction for an appeal against a refusal to grant an SEV based on these three grounds. But while there is no appeal against refusal on grounds (c) and (d) the Act does not exclude an appeal on ground (a). It may be argued that there is no point in an appeal being allowed to proceed simply on ground (a) as even if it succeeded the decision could not be overturned and the licence granted. Yet Parliament has given a right of appeal on ground (a) presumably inter alia because it involves a finding of unsuitability on the part of an individual and that person should be allowed to appeal such a finding which may have long-term effects on them.

The court’s refusal to accept jurisdiction appears to be based on a literal interpretation of paragraph 27(2):

“An applicant whose application for the grant or renewal of a licence is refused on either ground specified in paragraph 12(3)(c) or (d) above shall not have the right to appeal under this paragraph.”

So does paragraph 27(2) remove only the right to appeal against a refusal under paragraph 12(3)(c) or (d) or does it remove the right of appeal altogether? We m ay find out if the Bristol case makes its way to the High Court.

Rights of those with an interest

The Licensing Act 2003 recognises the need to protect the position of those with an interest in premises which have the benefit of a premises licence. This is done in two ways. First, an owner may register with the licensing authority his interest in the property and the authority must then advise the owner of any matters which may affect the premises licence (s.178). It would be good practice for licensing authorities to acknowledge receipt of the notice and to remind the person registering the interest of the need to renew it annually.

Secondly, the Act allows an application by a person with an interest in the premises to restore a premises licence that has lapsed; but the application must be made within 28 days of the lapse (s.47). One of the ways in which a premises licence may lapse is on the insolvency of the premises licence holder (s.27(1)(c)).

A difficulty arises where neither the person with an interest in the premises (the owner of the premises) nor the licensing authority are notified of the insolvency of the person holding the premises licence (the tenant of the premises) until it is too late to reinstate the licence. The premises may therefore be trading without an authorisation and be required to close while an application is made for a new licence (at some expense should representations be received and a hearing be necessary).

Further, as has happened recently, what is the position if the premises are within a cumulative impact policy area (CIP) and there are police representations against the grant? Is the fact of the lapse sufficient for the authority to decide not to trigger its CIP or to allow the application as an exception to the policy? A recent appeal on this point was settled on the basis that, while technically a new application, the fact that the licence had lapsed, unknown to both the authority and the owner of the premises, allowed the application to be treated as an exception to the CIP. It may be that the licensing authorities could contact the Insolvency Service requesting that the authority be kept informed of insolvencies involving licensed premises in their area.

Test purchases

Enforcement authorities are making increasing use of test purchase operations. Alcohol and tobacco sales have long been targeted, as well as taxi fares and more recently late night refreshment venues (LNR). The last of these, LNR, has been presenting problems as some independent food operators appear unaware of the need for a licence to sell hot food or drink after 2300 hours (thinking a planning consent is all that is required) and may well not understand that in general it is not enough to take the money for the food before 2300 for the sale is made when the food is appropriated to the contract. In general enforcement officers will issue explanations and warnings before taking further action.

Of particular concern to the trade has been what action, aside from refusing the sale or admission, they should take if presented with a fake ID. There are generally two types of fake ID – genuine ID used by another person and counterfeit or doctored ID. Revised Home Office Guidance issued in July 2012 aims to assists with identifying fake ID and also sets out the law in relation to the fake ID and what to do with such ID. While parts of the guidance appear unrealistic and are somewhat confusing it will be of assistance to those called upon to advise licence holders. The document can be found on the Home Office website (www.homeoffice.gov.uk)

The Better Regulation Delivery Office in July 2012 issued a consultation Age Restricted Products and Services: A Code of Practice for Regulatory Delivery (ttp://www.bis.gov.uk/brdo/publications/current-consultations), the closing date for which is 28 September 2012. Views are sought on a number of issues concerning test purchasing such as the selection and instruction of test purchase volunteers. Beyond this, is the suggestion put forward that ‘where it is proportionate and necessary’ a test purchaser may lie about their age and the novel proposal that volunteers should be given a proof of age card containing their correct age but a false name. While the test purchase process is now well accepted and its legality confirmed, care should be taken lest it strays towards entrapment.

There have been a number of recent High Court cases where entrapment has been claimed in operations designed to test the willingness of private hire vehicle drivers to ‘ply for hire’; the latest being East Riding of Yorkshire Council v Dearlove [2012] All ER 163. It has generally been approved that an enforcement officer should do no more than an ordinary customer would do with regards to attempting to get a ride in the taxi. Yet, as one commentator, Andrew Noble of the University of Birmingham, has recently asked, what is an ‘ordinary customer’ would a ‘reasonable customer’ be more appropriate? Noble has also raises an interesting debate over the legality of such test purchases and under what authority they are conducted.

Manchester on Alcohol & Entertainment Licensing law

Colin Manchester’s book, written in association with Jeremy Allen and Susanna Popplestone, quickly established itself as the best of the new volumes that accompanied the coming into force of the Licensing Act in 2005. It has stood the test of time and is now into a third edition. The title has changed to reflect the fact that Jeremy and Susanna have not been involved in this latest edition and the book is dedicated to the memory of Jeremy Allen who died last year.

It is an even weightier tome than before, running to some 200 more pages but on good quality, lighter paper so that its volume remains much the same. Following the format of the previous book it remains accessible and easy to read and navigate. It is a superbly produced and scholarly work that once again combines keen academic rigor with a penetrating practical analysis. It offers a balanced view of contentious issues, carefully weighing and assessing competing viewpoints. Produced by Woods Whur Publishing, Leeds (ISBN 978-0-9572677-0-1) it is at £79 excellent value and an essential tool for anybody involved in alcohol and entertainment licensing law.