by David Clifton of thePublican.com's legal team of experts from London solicitors Joelson Wilson
By the time you read this, the government will have hopefully started to see sense and some progress may have been made in addressing what I consider to be one of the most significant aspects of the Licensing Bill, at least as far as operators, developers and lenders in respect of new leisure projects are concerned.
I say this because two peers have tabled amendments in relation to the part of the bill that deals with provisional statements - the equivalent of our current provisional licences (clauses 28-31).
The issue is what should happen on completion of works as the holder of a provisional statement applies for a premises licence to enable him to start trading.
The present system
Under the present system, pub and leisure operators are able to proceed with the development of substantial construction projects in the safe knowledge that having first obtained a provisional licence, it will be made final as long as: the premises are completed in accordance with the approved plans and the holder of the provisional liquor licence is not disqualified from holding a justices' licence.
Similarly, it is also not open to anyone to make objection at the final stage under the existing public entertainment licensing legislation. The effect is that, having obtained a provisional public entertainment licence, it is effectively guaranteed that the licence will be "made final" upon satisfactory completion of the works.
The proposed system
This is why many in the industry have been very surprised to learn that clause 31 of the Licensing Bill will, if brought into force in its present form, enable representations to be made (in the nature of objections) upon application being made for a premises licence upon completion of the works.
In other words, once the operator has gone to the massive expense of developing the site in accordance with the council's specifications, he can face a challenge out of the blue from someone who never objected in the first place.
At present, clause 31(3) does place some limitation upon the entitlement of any person to make such representations.
They must have some "reasonable excuse" to explain why the same or substantially the same representations were not made by them at the time of the application for the provisional statement, or there has been a "material change in circumstances" relating either to the premises or "to the area in the vicinity of" the premises since the provisional statement was made.
Room for legal argument
It doesn't take a genius (or a lawyer) to work out that these "limitations" cause far more problems than they solve.
Such wording will provide room for considerable legal argument, particularly since the explanatory notes issued by the Department for Culture, Media and Sport give an example of a "reasonable excuse" as being a local resident saying that he was in hospital at the time of advertisement of the original application!
What does a "material change of circumstances" mean? If a block of flats has been built next to the site of a proposed pub since the time of the application, is that to be regarded as a "material change"?
The possibilities are endless. So much for the government's aim of removing the lawyers from the licensing system! Perhaps I shouldn't be complaining!
At a conference last year I asked Andrew Cunningham, the government official responsible for the bill to explain the rationale behind the proposal contained in clause 31(3) and the intention on the part of the government, when drafting the bill, in relation to the words "material change in circumstances".
He replied to the effect that the interests of local residents had to be protected and that it would be a matter for the courts to determine the correct interpretation of the phraseology.
Consequences
The right to object late (because that is what it would be) could have one or more of the following consequences:
- the application for the premises licence may be refused, with the consequential effect that very substantial investment will have been incurred but the premises will be incapable of use
- more restrictive conditions may be imposed on the premises licence, completely undermining the commercial viability of the project
- the opening of the premises may be delayed for an unacceptable period of time while issues are argued before the licensing authority (or on appeal before the magistrates) with regard to the interpretation of clause 31(3).
These are possibilities. What is guaranteed is that any objection will put the licensee (and the council) to considerable and unwarranted additional expense.
Precedent
This situation is not without precedent. In 1996, the law was changed in relation to special hours certificates to enable licensing justices to grant provisional certificates. This gave a degree of certainty - previously lacking - to applicants intending to operate nightclubs and other late-night premises that they would in fact be able to stay open later than 11pm.
I fear that unless the clause is radically changed, it will be a massive disincentive to new pub and leisure developments with consequences for the construction and tourism industries and the economy as a whole. Ironic really, given the government's stated aim of boosting tourism - and presumably the economy too!
Indeed, at a recent hearing on the bill, Lords Minister Baroness Blackstone stated that the government does "not want businesses to be subject to unnecessary burdens or restrictions". If that is so, she should remove this clause from the bill.
Pictured: Under proposed amendments, operators may be challenged out of the blue, even after expensive construction work has been completed