The Law Behind… Alcohol

New licensing laws have put the market in a spin. With many holes still to be filled and questions to be answered, licensing lawyers are likely to become familiar faces in the courts.

The Law Behind... AlcoholThe Licensing Act 2003 supposedly heralded a new horizon for the pub, restaurant and nightclub industry, with a promised reduction in red tape and more flexibility for licensed premises to generally open longer. The quid pro quo was a transfer of power from local magistrates to local councils.

Alcohol has been in the public eye much more recently due to the reform. Headlines and stories over the past couple of years have included: Menace of the binge drinkers; Britain is in the grip of a booze crisis with more than a quarter of adults hooked on drink; Minister admits 24-hour licensing laws a failure in boozy Britain.

With the Department for Culture, Media and Sports issuing of a new consultation on the Guidance to the Licensing Act on 16 January, licensing and booze Britain has yet again been thrust into the spotlight.

Under the new licensing regime, which came into effect on 24 November 2005, a Premises Licence is required for any premises selling alcohol, providing regulated entertainment or selling hot food after 11pm. The draughtsman must have had some fun defining hot food as being of a temperature above the ambient temperature and regulated entertainment being licensable unless you are a morris dancer.

Under the Licensing Act 1964 and the legislation that controlled public entertainment, premises were licensed separately for alcohol and entertainment. Applications for alcohol were made to local magistrates. Apart from many procedural hurdles (which often resulted in scrutiny from the High Court), the system worked pretty well, although local residents often felt access to justice was difficult to obtain.

When the Licensing Act 2003 came in force, all licensed premises had to apply to convert their existing licence(s) into a Premises Licence and Personal Licence. If they failed to do so, as many did, the old licences lapsed and the premises had to close until a new licence was granted.

At the same time, a variation could be submitted to change the hours or amend the licence. While sold by government as a simple administrative process, the reality was that the forms were complex and licensing lawyers generally had a very busy and profitable year. The transitional arrangements required that conditions and restrictions from the old Justices and Public Entertainment Licence were automatically endorsed on to the new Premises Licence. However, out of the change in legislation came some interesting anomalies, including:

> was drinking-up time a restriction that is carried forward under the new act?; and

> can a licence holder or designated premises supervisor be prosecuted for an act of an agent?

Such questions continue to fuel debate among licensing authorities and practitioners alike, each pointing to statutory guidance and interpretation of legislation that support their own views.

The Government was heavily criticised, albeit belatedly, for providing too much flexibility; for providing not enough flexibility; for the system being too expensive or too cheap; and (unanimously) for the late publication of the regulations that gave effect to the act.

One supposed benefit of the deregulation was to abolish the system of normal permitted hours and allow operators to apply for what hours they wanted. Notwithstanding such potential for making such an application, any applications would be subject to scrutiny by interested parties.

Guidance was issued by the Government to aid licensing authorities in their new role. It stated: The Government strongly recommends that statements of policy should recognise that longer licensing hours, with regard to the sale of alcohol, are important to ensure that the concentrations of customers leaving the premises simultaneously are avoided.

Almost without exception the large pub chains applied for all of their licences to be extended in some way, which put the system for transition into meltdown. Some applications were granted; some were refused or granted on restricted terms. In many cases there were no objections at all, but the rush of conversion and variation applications left all licensing practitioners, both in private or local authority practice, needing a stiff drink.

Unlike the previous licensing regime, the consumption, as opposed to the sale, of alcohol is not a licensable activity. Many local authorities are perhaps understandably not happy with this and have sought, arguably unlawfully, to restrict the consumption of alcohol as an embedded restriction on all converted licences. It is therefore arguably legally possible to buy a bottle of wine during the last minutes of permitted hours and consume it at leisure.

However, abuse of any such flexibility or lacuna that may exist, such as an engineered promotion of selling substantial amounts at a late hour may result in the Premises Licence being reviewed by the local authority and perhaps revoked, or its terms and conditions curtailed. Whether the pub landlord will allow it in any event is another matter.

The Government set four key objectives to which all licensing applications must adhere. The aim here was to unify all licensing authorities in their determination of licensing applications.

In order to succeed in gaining a new Premises Licence, or variation to an existing licence, the applicant must ensure that the four following licensing objectives are addressed:
-prevention of crime and disorder;
-public safety;
-prevention of public nuisance; and
-protection of children from harm.

Any application for a new Premises Licence or variation must be served on the responsible authorities. These include the police, the fire authority and various agencies of the local authority. The application must be advertised on the premises and in a local newspaper. Interested parties, such as people living in the vicinity, can also object. The meaning of vicinity has already been the subject of much argument.

The responsible authorities or an interested party can submit a representation, which if unresolved through conciliation requires the application to be determined by a licensing subcommittee.

There are interesting issues of impartiality here for example, unless there is a representation against an application the local authority must grant the application. Therefore, in some cases, councils make their own representations, often through the port of the Environmental Health Officer, so as to trigger a hearing and give the licensing subcommittee discretion in determining an application.

Every council must have a Statement of Licensing Policy. Perhaps not surprisingly, these policies vary enormously.

For example, Westminster City Council has a policy that:
> no new licences or applications will be granted to enlarge premises in Soho or Covent Garden; and
> no licence will be granted after 11.30pm during the week and midnight at weekends.

Although the Governments guidance to the new act suggested more flexible hours can have a positive impact on crime and disorder, in Westminster it is the councils policy generally not to grant any new licences or extended hours. Conversely, other councils have actively encouraged late licences and arguably followed the spirit of the Governments guidance more positively. There are, therefore, huge inconsistencies across the country and even in adjoining boroughs. Interesting lacunas have already appeared in the new legislation and the role of councillors and their policies are raising many issues that may be the subject of an application for judicial review. A refusal can, of course, be appealed to the magistrates court, but this can take months, if not years.

There are inconsistencies nationally as to how the legislation is applied and enforced. Under the new regime, licensed premises have seen more enforcement, including test purchases by underage children. This is no doubt commendable in order to protect the vulnerable. However, prosecutions have failed against licence holders when a person has sold alcohol at a checkout to a person under 18 because the licence holder has been held to have not sold the alcohol.

As with any new legislation there will be a bedding in, or perhaps more appropriately in this case a drinking-up, period.

Life as a licensing lawyer is an interesting one not least because of the restaurant openings and the long trips to (not so) glamorous places. And there are busy times ahead.

Any new legislation, particularly when accompanied by a plethora of regulations, explanatory notes and statutory guidance, will inevitably unearth inconsistencies that will need to be settled by the courts.

With increasing enforcement by the police and local authorities and proactive local resident and amenity groups, licensing will continue to be a growth area for lawyers. With a reform in gambling laws also happening this year, practitioners in this area should be kept busy. Make mine a double.

Alun Thomas is a licensing partner and Holly Mason is a paralegal, both at Davenport Lyons