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The Nicholson Committee: Review of Liquor Licensing Law in Scotland
CHAPTER 6
PROCEDURES BEFORE LICENSING BOARDS
6.1 In this chapter we consider how the licensing process might work in future if effect were to be given to our general proposals for reform. We begin by considering the procedures which should be followed when application is made for the grant of a premises licence, and by considering the process of objection. We consider the grounds upon which a premises licence should be granted or refused, and we also say something about the desirability of licensing boards being required to issue policy statements on a range of matters which relate to the licensing process within their licensing areas. At the outset, however, we must deal with a matter which impinges on a licensing board's independence and impartiality as required by article 6 of the ECHR.
Applications by a local authority
6.2 Very occasionally, as we understand it, a local authority may wish to apply for the grant of a liquor licence in its own name. Our researches reveal that the number of licences held by local authorities is actually very small (nearly all in single figures), with those licences mostly relating to, for example, properties such as civic art galleries which have refreshment facilities attached to them. Given that the members of a licensing board will be councillors of the very authority which is seeking such a licence, it is plainly incompatible with the requirements of article 6 of the Convention that they should deal with such an application. The question then is: How should such matters be dealt with in future? At one stage we contemplated the possibility that applications for a premises licence by a local authority might be dealt with by the local sheriff. However, that possible solution has many disadvantages. First, it would create an application procedure quite separate from the main application procedures under any new legislation, and as such it would require much detailed provision albeit only in respect of a very small number of applications at any one time. Second, and more importantly, since a central feature of our proposals is that in future licensing boards should have a major role not only in determining policy but also in monitoring and supervising the operation of licensed premises in their locality, any separate provision in respect of a small number of premises would automatically take them outside that monitoring and supervising provision. All of that is plainly undesirable. We noted, however, that, so far as the City of Dundee is concerned, it has no liquor licences in its own name: and, when we inquired as to the reason for that, we were told that in Dundee it is the practice for the Council either to offer franchises for catering in premises owned and operated by the Council or to lease the appropriate parts of such premises to tenants. Under that arrangement liquor licences are applied for, and held by, the successful franchisees or tenants. Under such an arrangement, of course, the Council receives a fee and/or rent from the franchisee or tenant, but it does not hold the liquor licence itself. In our opinion this is a satisfactory way out of the dilemma which is posed were it to continue to be the case that local authorities could themselves be applicants for licences to be granted by licensing boards composed of members of those very local authorities. We for our part are in no doubt that the present system which permits that to happen is plainly open to challenge under the ECHR, and we equally consider that any new legislation which countenanced and permitted such a thing would be open to challenge under section 29 of the Scotland Act 1998. 1
6.3 We have made the foregoing thoughts known to licensing boards around the country in order to ascertain their views. By no means all boards have replied to us. Of those who have, however, it is fair to say that some are unhappy with what we propose while others are perfectly content to go along with our proposals. For the reasons which we have given we, for our part, are in no doubt that there must be a change to the present system. In all the circumstances, therefore, we recommend:
21. It should not be lawful for a local authority to hold a premises licence in its own name. All local authorities which presently hold liquor licences in respect of premises owned or leased by them should in future make other arrangements. Such arrangements might involve the catering, and in particular the licensed part of the operations, in such premises being placed in the hands of third parties by virtue of franchise, lease, or other similar arrangements so that in future any premises licence can be applied for, and held, by the relevant franchisee or tenant rather than by the local authority.
Procedures in general
6.4 It has been represented to us by many consultees that a major shortcoming of the 1976 Act is that purely procedural provisions are scattered throughout the statute, often in conjunction with substantive provisions. The consequence, it is said, is that it is often difficult to establish with certainty the procedures which must be followed in relation to different types of application. We agree with the foregoing criticisms. We note that this problem is avoided in, for example, the Civic Government (Scotland) Act 1982 where purely procedural provisions are contained in a separate schedule. 2 We are also, of course, aware that in many other instances procedural provisions are set out in separate rules or regulations which are introduced by secondary legislation. We consider that in future the procedural provisions relating to licensing applications and other licensing matters should be in a self-contained form separate from the main provisions of the primary legislation, and we favour the technique of putting them in the form of rules or regulations promulgated by secondary legislation. That approach has the great advantage that, if experience shows that changes to the procedural rules are required, any such changes can be introduced more speedily than would be possible by the amendment of primary legislation. We accordingly recommend:
22. Procedural provisions relative to licensing applications and other licensing matters should be set out in self-contained form, preferably as rules introduced by secondary legislation.
Form of applications to licensing boards, and objections thereto3
6.5 The 1976 Act provides 4 that an application to a licensing board is to be "in such form as may be prescribed". That has been construed as giving individual boards the power to prescribe the form of application which is to be used in their own area, and the consequence of that is that there is no uniformity around the country. We regard that as undesirable, and likely to lead to confusion and extra work especially for those applicants who may be seeking licences in different board areas. One of our guiding principles has been to simplify procedures where possible and, consistently with that, we consider that there would be advantage if there were to be a single form of application, both for premises and for personal licences, which would be used in all board areas. It is commonplace in many other fields of court and tribunal activity for statutory forms to be provided for a variety of purposes, and we consider that the same course should be followed here. If, as we have suggested above, all procedural provisions were in future to be in a self-contained set of rules or regulations, appropriate forms could be set out there. Likewise, we suggest that those rules should also contain a standard form to be used by objectors. We therefore recommend:
23. Procedural rules relative to proceedings before licensing boards should contain prescribed forms to be used by applicants and objectors, with those forms being standard in all licensing board areas.
6.6 If effect were to be given to the foregoing recommendation blank forms should be available at council offices for all who want them. However, we consider that it will also be helpful if the appropriate forms can be made available to applicants and objectors in electronic form. No doubt practitioners with an extensive licensing practice would themselves set up the forms on their office computers, but we consider that steps should be taken to enable others to obtain the forms electronically. That could be done in response to an e-mail request, and the forms could also be available for downloading from a Scottish Executive website. If this proposal is followed it will be desirable that provision should be made for applications and objections to be submitted to licensing boards by electronic means. 5 Were that to be done there would, of course, be a potential problem in relation to the payment of the appropriate fee relative to the application, objection, or whatever. There are several possible solutions to that. Where applications are being submitted by recognised legal practitioners it should be possible, as is presently the case in the civil courts, to set up an arrangement whereby a practitioner will simply arrange to pay a monthly account in respect of outstanding fees. It may also be possible for at least some local authorities to set up a system which will enable them to accept payment by means of a credit or debit card authorisation. 6 Finally, it could be provided in legislation that, where an application or other document requiring payment of a fee is submitted electronically, but without credit or debit card authorisation, the document will be of no effect unless payment is made in the conventional way within a specified period of time, say 48 hours. In the foregoing circumstances we do not consider that the necessity to pay a fee should prevent the submission of applications and other documents by electronic means. We therefore recommend:
24. The prescribed forms to be used by applicants and objectors should be available at council offices. However, they should also be available in electronic form: and provision should be made allowing them to be submitted to licensing boards in electronic form.
An explanatory booklet
6.7 While many applications to licensing boards, and some objections, are handled by legal practitioners who are familiar with the relevant law and practice, a great many are presented by lay applicants or objectors who do not have that familiarity and who may be uncertain about how to proceed. In relation to proceedings before the civil courts where lay people are likely to be involved on their own, and in relation to proceedings before various tribunals, it is now commonplace for explanatory booklets to be prepared setting out in clear and simple terms the relevant law and the procedures which must be followed before the court or tribunal. We consider that there will be advantage if a similar course were to be followed in relation to proceedings before licensing boards. This would, we think, be a task for the Scottish Executive since obviously any such booklet would require to be the same regardless of which licensing board was to deal with a particular application or objection. Copies of the booklet should be available at council offices, but they might also be made available in other places such as public libraries and, in addition, they could be made available on a Scottish Executive website. It is also for consideration whether such a booklet should be made available in at least some minority languages. We therefore recommend:
25. A booklet which sets out in clear and simple terms the relevant law and the procedures to be followed in proceedings before licensing boards should be prepared by the Scottish Executive; and it should be available to applicants and objectors at council offices, at other places such as public libraries, and on the Scottish Executive website. Consideration should be given to the desirability of making that booklet available in at least some minority languages.
Non-natural persons as applicants
6.8 Section 11 of the 1976 Act makes provision for applications being made in the name of an applicant, such as a limited company, who is not a natural person. It also makes provision for the nomination in such a case of a person who will have day-to-day responsibility for the running of the premises in question. Given our proposals for separate premises licences and personal licences, and given that we have proposed that the operating plan or schedule relating to an application for a premises licence should be required to name a designated personal licence holder who will have the foregoing responsibility, we see no need for a continuation of what is presently in section 11 of the 1976 Act. We therefore recommend:
26. The provisions of section 11 of the 1976 Act relative to applications by non-natural persons need not be repeated in any new legislation.
Publication of lists of applications
6.9 Section 12 of the 1976 Act makes provision for the publication in local newspapers of lists of applications which are to be considered at a forthcoming meeting of a licensing board. We agree that such publication is necessary; but of course the size of such lists will diminish substantially if effect were to be given to our proposal that a premises licence, once granted, should remain in force indefinitely. Even then, however, some problems may remain. Some of our consultees, including in particular those representing residents' groups or others who might be potential objectors, have said to us that under present arrangements it can be difficult to identify a particular application to which objection might be taken simply because of the difficulty involved in trawling through an indigestible list which may run to several pages. While that ground of complaint will eventually diminish, it is likely to remain at least during the first few years after the introduction of new legislation when existing licences will be undergoing conversion to new premises licences. For that reason alone we consider that there would be advantage if in future published lists of applicants were not only to show the names and addresses of applicants, and of course the address of the premises concerned, but also were to have the premises arranged by postcode number. That would mean that an interested person would only require to examine a relatively short section of the whole list in order to see if there were any applications which might adversely affect his or her interests. We therefore recommend:
27. Lists of applications published in local newspapers should group the premises to which the applications relate by postcode number.
Intimation of objections
6.10 Under existing law 7 an objector who has lodged an objection must himself intimate that objection to the applicant in the manner prescribed by the statute. 8 Many of our consultees have said to us that this requirement is unduly onerous, particularly for lay objectors who do not have the benefit of professional representation. It has also been pointed out to us that, in proceedings falling under the Civic Government (Scotland) Act 1982, the duty of intimating objections is placed on the licensing authority. Licensing boards to whom we have spoken about this have all accepted that it would be reasonable that they should in future have a similar duty in respect of objections to applications relating to liquor licences. We consider that a change to that effect is desirable and that it would be another small step towards simplifying procedures. It will, of course, be necessary that there should be prescribed time scales within which such intimation must be made. We therefore recommend:
28. Objectors to a licensing application should no longer be required themselves to intimate their objection to the applicant. That duty should be undertaken by the licensing board which is to consider the application and the objection, and intimation by the licensing board should be made within a time scale to be prescribed in regulations.
Renewal of licences
6.11 Under our proposals a premises licence will remain in force indefinitely unless (a) the premises in question cease to be used for the sale or supply of alcohol, (b) the terms of the licence are varied upon an application at the instance of the premises licence holder, or (c) the licence is varied, suspended or revoked by a licensing board following upon a complaint made by a person authorised to do so. 9 In those circumstances there will be no need to replicate the current provisions relative to the duration and the renewal of a licence. However, given that we have recommended that a personal licence should have a duration of 10 years and should be capable of renewal thereafter, we consider that it will be necessary to make some provision for that. We suggest that an application for renewal of a personal licence should be made to the licensing board which granted the licence in the first instance but, if the licence holder is working at the relevant time in the area of a different licensing board, that application should also be intimated to that other licensing board. An application for renewal should be intimated to the appropriate chief constable or chief constables. We consider that it should be open either to a chief constable or to the licensing board of the area where the applicant is currently working to make representations to the board which will consider the application to the effect that renewal should not be granted but, as in the case of the original grant of such a licence, any such representations should be on the ground that a renewal would undermine the "licensing principles". 10 We imagine that in most instances an application for renewal of a personal licence will not be challenged, and we suggest that in such cases the application could be dealt with administratively by clerks to licensing boards. In the event of challenge, however, it will be necessary for the board in question to convene a hearing to consider the matter. On the foregoing matters, therefore, we recommend:
29. (a) If the new system of premises licences which we have recommended were to be introduced there would be no need to replicate the existing provisions relative to the renewal of licences.
(b) An application for renewal of a personal licence should be made to the licensing board which originally granted that licence, and it should be intimated to the chief constable for that area; and, if the applicant is currently working in the area of a different licensing board, the application should also be intimated to that other licensing board and to the chief constable of that other area.
(c) The licensing board for the area where the applicant is currently working, and the chief constable for that area, together with the chief constable for the area where the application is to be considered, should be entitled to make representations to the board which is to consider the application to the effect that the granting of the application would undermine the licensing principles.
(d) Where no such representations have been made, any application for renewal should be dealt with administratively by the clerk of the licensing board in question; but, where such representations have been made, the board should hold a hearing to dispose of the application.
Provisional grant of licence
6.12 The provisions which are presently to be found in section 26 of the 1976 Act serve a useful purpose in relation to premises about to be constructed or in course of construction. It will be desirable to retain something similar in any new legislation, and we therefore recommend:
30. Subject to any necessary modifications the existing provisions for the provisional grant of a licence (1976 Act, s. 26) should be replicated in any new legislation.
Objectors and objections
6.13 Under our general proposals objections will in future arise in relation to premises licences. However, subject to that obvious change, we do not consider that the process of objection need change radically under the scheme which we are recommending, though some changes are in our view desirable. It is convenient to begin with the present provisions. The list of those who may at present object to an application which has been made to a licensing board is to be found in section 16 of the 1976 Act. They are -
"(a) any person owning or occupying property situated in the neighbourhood of the premises to which the application relates or any organisation which in the opinion of the board represents such persons;
(b) a community council ..... for the area in which the premises are situated;
(c) any organised church which, in the opinion of the licensing board, represents a significant body of opinion among persons residing in the neighbourhood of the premises;
(d) the chief constable;
(e) the fire authority for the area in which the premises are situated;
(f) a local authority for the area in which the premises are situated."
6.14 Many of our consultees have suggested that the foregoing list of potential objectors is unsatisfactory for a variety of reasons. Some have said that the list may exclude those, such as residents' associations, who have a perfectly valid interest in opposing the grant of certain applications. Others have suggested, quite rightly in our view, that it is anomalous that a valid objection can be entertained from the very local authority from which the members of a licensing board are themselves drawn. That, of course, is also quite plainly inconsistent with the provisions of article 6 of the ECHR.
6.15 We share the view that the present list of valid objectors is unsatisfactory for a number of reasons. First, there is some authority for the view that "person....occupying property", as mentioned in head (a) of the list, is to be construed as meaning an occupier within the meaning of the Valuation Acts. 11 That means that the words in question exclude a person who is simply resident in the neighbourhood. By the same token, the closing words of head (a) would then have to be construed as referring to an organisation which represents owners of property and occupiers of property, as defined in the case in 1956, but excluding those who are merely residents. That might then exclude residents' associations which, by definition, represent residents of whatever kind, regardless of whether they are owners, occupiers (in the statutory sense), or residents in the wider sense. We understand that the case of McDonald is seldom invoked in practice nowadays, but it nonetheless remains as the only authoritative decision on the meaning of the words "occupying property". We also note that the words in question, as so defined, are to be contrasted with the wording of head (c) which refers to a church which represents a significant body of opinion among persons "residing in the neighbourhood". There is no obvious reason why there should be this difference in the words used in head (a) and head (c), and we can only conclude that this is an example of careless drafting in the 1976 Act. For the future, we consider that the artificial restriction imposed by the words "occupying property" should be departed from, and that residence (along with ownership) should become the main qualifications for an entitlement to object to licensing applications.
6.16 A further difficulty which we have with the existing provisions in section 16 is that, under head (a), in relation to an organisation, and under head (c), qualification as a competent objector is dependent on the opinion of the licensing board. It is, of course, perfectly acceptable that there should be some way of ensuring that objections are not entertained from bodies who, in a legal sense, have no title or interest to state an objection; but, in terms of section 16, as presently drafted, it would theoretically be open to a board to refuse to hear an objection for some entirely frivolous reason on account of the fact that the statute simply does not set out the basis upon which the board's opinion should be formed. We consider that this is something which requires attention.
6.17 Another, and major, difficulty with the list of objectors set out in section 16 arises from the fact that, in terms of head (f), a local authority may be a valid objector. We are in no doubt that this is in clear conflict with the requirements of article 6 of the ECHR, 12 and for that reason we consider that a local authority should no longer be a competent objector. On the other hand, we readily recognise that some of a local authority's officials and departments may often have information or views which should quite properly inform the deliberations of a licensing board. Such departments could include environmental health, building control, food hygiene and, on occasions, trading standards. 13 At present such departments may be represented when a licensing board is in session, and views may be offered in a somewhat informal way in the course of a hearing. We take the view that such departments should continue to be entitled to offer views in relation to applications. Indeed, we consider that boards should be fully entitled to seek such views where it appears to be appropriate to do so. However, in the interests of fairness we think that there should be a new procedure for doing that which will ensure that both applicants and objectors have some advance notice of points which are to be raised. We consider the detail of that procedure shortly.
6.18 A particular problem arises, we think, in relation to chief constables. They obviously have an entirely proper interest in the grant or refusal of liquor licences because of their responsibility for public order and public safety. However, it has been suggested that their position in terms of the 1976 Act is in some respects a particularly privileged one which can on occasions cause unacceptable prejudice to applicants. In terms of section 16(1)(d) of the Act they have the status of statutory objectors which means that they can make formal objection to an application in the same way as any of the other statutory objectors. However, section 16(4) allows a chief constable to depart from the normal time limits for intimating his objections to an applicant and, in terms of the subsection, objections by a chief constable may be entertained by a board where the objections have been lodged "at any time before the hearing of an application". That, of course, could mean only a matter of minutes before the application is to be heard. In such a case the board requires to be satisfied "that there is sufficient reason why due notice and intimation of the objection could not be given", and the subsection concludes by requiring the chief constable to "cause his objections to be intimated to the applicant before the hearing". However, the subsection contains no provision requiring the board to consider adjourning the hearing, where there has been a very late objection by a chief constable, in order to allow the applicant time to consider and, if so advised, to respond to the objection.
6.19 Special provision for chief constables is also to be found in section 16A of the Act. That section permits a licensing board to have regard to any "observations" submitted by a chief constable in relation to an application. 14 Any such observations have to be lodged with the clerk to the board not later than seven days before the board meeting and must be intimated to the applicant at the same time. However, section 16A(4), just like section 16(4) in respect of objections, permits a chief constable to depart from the foregoing time limits and to lodge his observations at any time before the hearing of an application. Of particular interest in this context is subsection (5) of section 16A which provides that a licensing board is to have regard to any observations submitted by a chief constable "whether or not they are relevant to one or more of the grounds on which, by virtue of section 17 of this Act, an application may be refused". The foregoing provision appears to mean - to take the most extreme case - that a chief constable could lodge observations only minutes before an application is due to be heard; that these observations could have no relevance whatever to any of the statutory grounds for refusing an application; that the applicant could be allowed no time to consider and answer the observations; and that a board could refuse the application on the basis of the observations notwithstanding that they did not constitute a valid statutory ground for doing so. We venture to think that a licensing board would be most unlikely to arrive at a decision in such a manner; but we regard it as undesirable that such a course should, on the face of it, be perfectly competent in terms of the relevant legislation.
6.20 Most of the remaining objectors presently provided for by section 16 of the Act do not give rise to any concerns. We regard it as acceptable that a community council should have a statutory entitlement to object to an application in respect of premises within its area; and, subject to what we have said above about "the opinion of the licensing board", and to what we say later, 15 we consider that an organised church should remain as a competent objector. The fire authority is, however, in a somewhat different position, and we have earlier suggested that in future it should be required to have some input into consideration of all applications for a premises licence. 16
6.21 Taking account of the various comments which we have made in the preceding paragraphs we have considered the changes which might be recommended to the existing list of statutory objectors. We have come to the conclusion, firstly, that a distinction can and should be drawn between, on the one hand, those organisations and individuals who are not normally part of the licensing process but who may wish, in the strict sense of the word, to object to a particular application and, on the other hand, those, such as the chief constable, who have a continuing interest in the whole of the licensing process, and whose views in relation to particular applications must be taken into account by a licensing board. We consider that that distinction is already recognised to some extent by the provisions in section 16A of the Act which permit a chief constable to make "observations" as distinct from lodging a formal objection. It is also recognised when, as noted above, boards seek informal views from certain council officers in the course of board meetings. In our opinion the foregoing distinction should be given formal recognition, partly in the interests of greater clarity but also because such recognition will be consistent with what we say throughout this report in relation to boards undertaking a more pro-active role when considering applications. We therefore recommend:
31. The list of statutory objectors should be confined to those individuals or organisations who are not normally involved in the licensing process but who may wish to object to the grant of a particular application. There should be a separate list of those with a continuing interest in the licensing process who may submit observations or representations regarding an application or applications.
We now expand on the foregoing general recommendation.
6.22 The first group who should have statutory objector status must obviously include those who own property or who reside in a place which may be adversely affected by the grant of a particular application, together with any organisation representing such persons. We have already noted the need to depart from the use of the word "occupying" as presently used in section 16(1)(a) of the Act, and we have also criticised that subsection for giving boards, by the use of the phrase "in the opinion of", an unfettered discretion as to whether or not to recognise a representative organisation. The present provision is also open to criticism on the basis that, by referring to "property situated in the neighbourhood", it may exclude those who are not strictly in the neighbourhood of premises but who may nonetheless be able to demonstrate a potential loss of amenity on account of being on a route which is likely to be taken by noisy or disorderly patrons emerging from licensed premises very late at night. On the other hand it is plainly desirable to have some means of excluding from an entitlement to present objections those who have no connection whatever with the premises in question and their neighbourhood, and whose objections may simply be frivolous. That consideration leads inevitably in our view to the conclusion that there must be some restriction by reference to "neighbourhood" or "vicinity" notwithstanding the fact that, as has been seen in many cases before the courts, such words may be a recipe for dispute. Accordingly, we consider that the main defects in the present wording would be cured if a right to object were to be conferred on those who own, are tenants of, or reside in property situated in or near the neighbourhood of the premises to which an application relates. A similar right of objection should be conferred on any body or organisation which represents, or bears to represent, people of the foregoing category. We recognise that words such as "in or near" may give rise to uncertainty in some cases. However, our intention is that the wording should be capable of including as an objector someone who, for example, resides at a place which may be subject to undesirable disturbance caused by patrons of licensed premises even when those premises are not immediately adjacent. Wording such as we are suggesting would remove the present reference to the "opinion of the board" which, as we have noted above, is unsatisfactory.
6.23 As we have previously noted, a community council for the area in which the premises are situated should continue to be a competent statutory objector. So far as churches are concerned we consider that it is unnecessary and inappropriate that they should be recognised as objectors only when, in the opinion of the board, they represent a significant body of opinion among persons residing in the neighbourhood of the premises. A church may, after all, wish to object to an application on its own account because of the proximity of proposed licensed premises to a church building or an adjacent graveyard. We should say, however, that it is not immediately clear to us what is intended by the statutory reference to any "organised" church, though we suspect that this is intended to signify that "church" should be read as meaning the summation of a whole religious denomination such as the Church of Scotland, or the Roman Catholic Church, rather than a particular church building in a particular locality. There is, however, a further matter which occurs to us in this context. The present provision relating to an "organised church" was introduced into the 1976 Act as a result of a recommendation by the Clayson committee, but it appears that the committee made that recommendation solely on the basis of representations made by the Church of Scotland. 17 Consequently, there does not appear to have been any explicit consideration given to religious faiths other than Christian. In our view it may be doubtful whether the word "church" could be construed as including the Jewish faith, and all the more so it may be doubtful whether it would embrace other religions such as those of Islam. We consider that, in an increasingly multi-cultural society, any body representing an established religion should be entitled to object to an application if that body owns or occupies property in or near the neighbourhood of the premises to which the application relates. We therefore recommend:
32. The following should be statutorily entitled to object to the grant of an application for a premises licence - (a) any persons who own, are tenants of, or reside in property situated in or near the neighbourhood of the premises to which an application relates, together with any body or organisation which represents, or bears to represent, people of the foregoing category; (b) a community council for the area in which the premises are situated; and (c) any body representing an established religion where that body owns or occupies property in or near the neighbourhood of the premises to which the application relates.
6.24 We have previously explained why we consider that a local authority should no longer be a competent objector. We therefore recommend:
33. A local authority should no longer be a competent objector to a licensing application.
6.25 Although, for the reasons already given, a local authority should no longer be a competent objector, it is plain that there are many within a local authority whose views should properly be taken into account by a licensing board when considering an application. They include environmental health officers, building standards officers, trading standards officers and, no doubt, others. In addition, of course, the chief constable and the fire authority are likely to have a significant contribution to make in many instances. We consider that all such officials, along with the chief constable and the fire authority, should be entitled to make observations or representations in respect of any application, much along the lines of what is presently provided in section 16A of the 1976 Act. Moreover, we also consider that it should be open to a licensing board to seek observations from any such person if it appears to be appropriate to do so.
6.26 However, we consider that it is appropriate that some of the less desirable provisions in section 16A 18 should be improved. The normal time limit for submitting observations, as set out in section 16A(2) should be retained but, consistently with what we have recommended in relation to objections, it should be for the board to intimate those observations to the applicant. Notwithstanding the normal time limit, it should remain competent for observations to be submitted at any time before the hearing of an application, but in that event we consider that it should be made clear that, if the board is minded to entertain observations which have been submitted late, it should offer the applicant the opportunity of an adjournment in order to consider the observations. In some instances an adjournment simply until later the same day will be sufficient, but in other instances a longer adjournment to a subsequent sitting of the board may be appropriate. We also consider that some change should be made to the provision in subsection (5) of section 16A which requires a board to have regard to observations whether or not they are relevant to any of the grounds on which an application may be refused. We recognise, of course, that an observation may be relevant to a special term or condition which is to be attached to a licence which is in any event going to be granted, and in that situation we do not suggest that observations must be confined to the grounds on which an application might be refused. Indeed, given our earlier recommendations 19 for premises licences to be "tailored" to particular premises and particular operations, the terms and conditions to be attached to a premises licence will in future be a matter of particular importance. On the other hand, there is, we believe, scope for potential injustice in the way in which the provision is presently drafted, and we consider that it should be made clear that an application should be refused (as distinct from being modified) only on one of the statutory grounds for refusal and not on the basis of some other consideration which has been advanced in observations or representations. On this matter, therefore, we recommend:
34. (1) The following should be entitled to submit observations or representations to a licensing board in respect of any application -
(a) the chief constable;
(b) the fire authority; and
(c) any official of the local authority who, by reason of his office, has an interest in any aspect of an application.
(2) Any observations should be lodged with the clerk of the board within such time limit as may be prescribed in regulations; and it should be the duty of the board to intimate such observations to the applicant forthwith.
(3) Notwithstanding the foregoing it should be competent for the board to entertain observations, lodged at any time before the hearing, if the board is satisfied that there is sufficient reason why due notice and intimation of the observations could not be given; but in that event the board should consider whether, in the interests of justice, an adjournment of the hearing should be granted so as to allow the applicant to consider and, as appropriate, to respond to the observations.
(4) A licensing board should have regard to any observations submitted by any of those entitled to do so, and should be entitled to impose or vary terms in a premises licence on the basis of such observations, but it should not refuse to grant an application on any ground other than those prescribed by statute.
Grounds for granting or refusing an application
6.27 Section 17(1) of the 1976 Act provides that an application is to be refused if the board finds that one or more specified grounds for refusal applies. The subsection then concludes with the words "and otherwise shall grant the application". While at first sight it appears to be perfectly reasonable that an application should be granted if a competent ground for refusal has not been found to apply, some of our consultees have advised us that in their experience it has been the practice of some boards to give no consideration to possible grounds for refusal unless they have been specifically advanced by an objector, and in that situation simply to grant the application. Those consultees have suggested that in future there should be a duty on boards to consider every application on its merits, even in the absence of formal objection. In this context, of course, it is also necessary to take note of our earlier recommendation to the effect that, even in the absence of an objection, it should be open to a licensing board, in accordance with its declared policies and having regard to the promotion of the "licensing principles", to modify, or to add to, the terms of a premises licence as proposed in an applicant's operating plan or schedule.
6.28 As can be seen throughout this report, we take the view that in future licensing boards should play a greater part than they do at present in monitoring and controlling the operation of the licensing system in their respective areas. We are also of the view that the present somewhat limited power to attach conditions to licences will require to be enlarged not only to take account of our earlier recommendations in relation to premises licences but especially to cater for the need to promote the "licensing principles". Accordingly, we consider that in future boards should have a responsibility to consider the merits of applications even in the absence of any formal objections. We think that it is most unlikely that a licensing board will ever be likely to find grounds for refusing an application in the absence of either objections from those entitled to object, or observations or representations from those entitled to make their view known to a board in that way. It is possible that the existence of a statutory entitlement permitting boards to refuse applications even in the absence of objections or representations might inhibit some potential investors from proceedings with plans for new licensed premises. 20 However, any decision to refuse a licence would be subject to appeal, and we venture to think that any such appeal might well succeed unless a licensing board had a very compelling reason for having refused the application. On balance, therefore, we recommend:
35. Even in the absence of objections or formal observations or representations a licensing board should be obliged to consider an application for a premises licence on its merits; and, if the board concludes that there are grounds for refusing the application, it should be entitled to take that course.
6.29 The grounds on which at present an application may be refused by a licensing board are: 21 -
"(a) that the applicant, or the person on whose behalf or for whose benefit the applicant will manage the premises or, in the case of an application to which section 11 of this Act applies, the applicant or the employee or agent named in the application is not a fit and proper person to be the holder of a licence;
(b) that the premises to which an application relates are not suitable or convenient for the sale of alcoholic liquor, having regard to their location, their character and condition, the nature and extent of the proposed use of the premises, and the persons likely to resort to the premises;
(c) that the use of the premises for the sale of alcoholic liquor is likely to cause undue public nuisance, or a threat to public order or safety;
(d) that, having regard to -
(i) the number of licensed premises in the locality at the time the application is considered; and
(ii) the number of premises in respect of which the provisional grant of a new licence is in force, the board is satisfied that the grant of the application would result in the overprovision of licensed premises in the locality."
6.30 It is obvious that at the very least the foregoing provisions will require some modification if effect is to be given to our recommendations in relation to premises licences. However, there are, we believe, some other defects in the present provisions which merit some consideration. Over the years the above grounds for refusal have been subjected to much detailed scrutiny by the courts. They have also been subjected to some criticism by our consultees. It has been said to us, for example, that the "fit and proper person" ground is vague and ill-defined, and offers no guidance as to what considerations may be relevant and significant. The "suitability of premises" ground has likewise been criticised on the basis that it is expressed in very wide terms, and consultees have commented on the amount of difficulty which it has caused for the courts - for example, in relation to the question whether premises can be regarded as unsuitable when they are part of, or adjacent to, a petrol station. The "public nuisance" ground has been criticised on the basis that, by the use of the word "undue", the legislation appears to be suggesting that a certain amount of public nuisance will not be a ground for refusal, and will simply have to be tolerated by local residents. That provision has also been criticised on the basis that, since it requires the forming of a view as to what is likely to happen in the future, it does not permit any subsequent reconsideration if that view turns out to have been mistaken. Finally, the "overprovision" ground has been criticised, largely on the basis that it is unworkable in practice. Inevitably, perhaps, the provision has given rise to difficulty over the years in relation to what constitutes "the locality". Moreover, the concept of overprovision itself may be far from clear. As was said to us by a very experienced board chairman: "If there are already 12 licensed premises in a given area, how can you say that there will be overprovision when there are 13; or will there only be overprovision when the number rises to 14?". To that there might be added the further complexity that, by concentrating only on the number of licensed premises, no account can be taken of the size, type and capacity of such premises. 22 We should add that the "overprovision" ground has also been criticised on the basis that, since it is not qualified by any reference to amenity or public order, it is capable of being used in restraint of trade whereas, at least according to some of our consultees, the number of licensed premises in a given locality should be determined solely by market forces and the process of competition.
Our approach to grounds for refusal
6.31 On the whole we tend to the view that the existing grounds for refusal are in theory acceptable. For the future, however, we consider that a general ground for refusal should be that the grant of a particular premises licence would not be in accordance with the "licensing principles". That would provide an over-arching set of considerations which would require to be taken into account in all cases. However, it will, in our view, be desirable, without prejudice to those general principles, to set out particular considerations, modelled on the present grounds for refusal, which will entitle a licensing board to refuse an application. Although the present grounds have generated much discussion in the courts, in fact the outcome of that has been that there is now a well understood body of case law which is likely to diminish the scope for further argument in future. However, there is, we believe, some room for improvement. So far as the "fit and proper person" ground for refusal is concerned, we consider that the need for it will disappear if effect is given to our recommendations for separate premises and personal licences. In that event "fit and proper" considerations will normally arise only in respect of applicants for personal licences, and we have already suggested the criteria which should be appropriate when the grant or renewal of such a licence is being considered. 23
6.32 So far as the "suitability of premises" ground is concerned, we consider that it is likely to have more substance when set against policy statements which, as we recommend later, 24 all boards should have a duty to formulate and to publish. That might deal satisfactorily with general matters such as the location of licensed premises at or near a petrol station. 25 However, in our view this ground of refusal must remain in order to deal with questions of suitability in relation to particular premises. It is, for example, a ground which might well merit consideration were there to be an application to open licensed premises adjacent to a primary school. Such an example would also, of course, fall under the general licensing principle of "the protection of children from harm".
6.33 The third of the current grounds for refusal refers to "public nuisance" and to a "threat to public order or safety". As such it falls entirely within the ambit of the "licensing principles". Since we are proposing that prejudice to the "licensing principles" should be an over-arching ground for refusal we do not consider that anything further is to be gained by repeating the current ground.
6.34 In relation to the "overprovision" ground of refusal we recognise that the largely arithmetical exercise which this at present involves is imprecise and unworkable in any meaningful sense. We recognise the difficulties which may arise in relation to the definition of "locality" in a particular case. We also accept that there may well be a case for saying that the density of licensed premises in any area or locality is something which should simply be left to market forces and to the consequences of competition between different premises which offer the same, or similar, facilities. On the other hand, we are firmly of the view that an over-abundance of licensed premises in close proximity to each other can have wholly unacceptable consequences of various kinds. The view of the police, based on their experience around the country, is that density of licensed premises in a particular area is likely to lead to a disproportionate amount of disorder near to those premises and in a substantial surrounding area. Local residents who live close to such concentrations of licensed premises have told us that, although they may be unable to fault the way in which individual premises are operated, the cumulative effect of having so many more or less in the one place is that levels of disturbance and public nuisance regularly reach unacceptable levels, particularly very late at night. The foregoing problems are, of course, likely to be exacerbated when one has regard to the fact that many of the premises which are to be found in densely licensed areas are of a size which enables many hundreds of patrons to be inside a single pub or club at the same time. When such places close, probably at around 3 or 4 a.m., the consequence is that several thousand patrons may emerge onto the streets at about the same time. A further consequence of having a very large concentration of licensed premises in the same area is that, for the very reason that is founded on by those who support the "market forces" argument, many, or indeed all, such premises will engage in a range of promotional activities in order to attract customers at the expense of their commercial competitors. We examine this in more detail in chapter 12, but for the moment we simply observe that the so-called deep price promotions which are pursued by some licensed operators give cause for serious concern in relation to public order and public health. For all of the foregoing reasons, therefore, we consider that the density of licensed premises in particular areas is something which must be taken into account by licensing boards, and that it is something which should constitute a possible reason for refusing to grant a licence.
6.35 However, the difficulty with the "overprovision" ground as it presently stands is that it directs attention to questions of density in an unfocused way which is likely to result in no more than a somewhat arid and uncertain arithmetical exercise. In our view the number of licensed premises in a given area should be considered not simply as a matter of arithmetic but by reference to the implications which that may have in the context of the "licensing principles". Moreover, it is also our view that, when consideration is being given to such matters, account should be taken not only of the number of licensed premises in a particular area but also of their type, size and capacity. A concentration of a few, very large, super-pubs in a small area might well have a greater consequence in terms of public nuisance and public order than would a concentration of a larger number of much smaller establishments.
6.36 For all of the foregoing reasons we recommend:
36. (1) There should be a general ground for refusing to grant a premises licence, namely that the operation of the premises for the sale or supply of alcoholic liquor would undermine the promotion of the licensing principles.
(2) Without prejudice to the foregoing generality the following should be grounds for refusal, namely (a) that the premises to which an application relates are not suitable or convenient for the sale of alcoholic liquor having regard to their location, their character and condition, the nature and extent of the proposed use of the premises, and the persons likely to resort to the premises; and (b) that, having regard to the type, number, size and capacity of licensed premises in the locality at the time when the application is considered, the grant of the application would be likely to undermine the promotion of the licensing principles.
6.37 We should add that we are conscious that, in the second of the foregoing recommendations, we have used the word "locality" notwithstanding the fact that, as we have noted earlier, it has on occasions come to be the subject of discussion and comment by the courts. We consider, however, that some flexibility is required to take account of different circumstances, and we also consider that in some instances licensing boards may wish to make clear what they regard as constituting a "locality" in any general policy statements which they may promulgate.
Policy statements
6.38 We are aware that at present a number of licensing boards from time to time prepare and issue policy statements setting out the policy which those boards are likely to follow in relation to certain matters and certain types of application. We have seen several of those policy statements, and we consider that they are likely to be helpful to licensees, to potential licensees, and to licensing practitioners. Indeed, that has been confirmed to us by several people in those categories. However, the use of policy statements is not universal throughout the whole country, and some licensing boards have advised us that they are unwilling to make them for fear that they might be open to challenge on the basis that they had in some way fettered their discretion in relation to future applications. We do not regard that as a real risk. As we have said before in this report, a licensing board is not a court of law where there is an adversarial system, and where it is essential that every case must be decided solely by reference to its own facts and circumstances. While licensing boards are of course expected to act in a judicial manner, their main function in our opinion is, or at least should be, a regulatory one, that is to say one which regulates and controls the provision and distribution of licensed premises within a licensing area having regard not only to the interests of applicants but also to the wider public interest. In that situation we can see no possible ground for objection if a board were to issue a statement setting out its general policy in relation to that spectrum of considerations. Any such policy statement would, no doubt, be framed in the context of local circumstances within a licensing area; and, of course, it would not be permissible for it to contain anything which was inconsistent with general licensing law. But it would, we believe, be possible for policy statements to deal with a wide range of matters, and to indicate in general terms the manner in which a licensing board is likely to approach certain issues.
6.39 Particularly in the context of the new licensing system which we are recommending in this report we consider that policy statements are likely to be highly beneficial. They could, as appropriate, reflect any views or suggestions made to licensing boards by local licensing forums, 26 and they could give a broad indication of special terms and conditions which a board might consider appropriate in relation to particular forms of licensed business. Policy statements are also likely to be helpful and appropriate as a means of indicating a board's approach to authorised licensing hours, both generally and in relation to particular localities or districts. In light of what we have said earlier in this chapter in relation to the grounds for refusing an application for a licence, we consider that policy statements might give an indication of how the word "locality" is likely to be construed and applied in relation to certain parts of a licensing area. In our view policy statements on matters such as those which we have just mentioned are likely to be helpful for all those who are involved in the licensing process. For that reason we consider that it will be desirable that all licensing boards should in future issue policy statements on all matters where such statements are likely to be helpful, and we therefore recommend:
37. Licensing boards should be under a statutory duty to issue policy statements which give a broad indication of the policy which is likely to be adopted in relation to the operation of the licensing system within their respective areas.
National guidance
6.40 We have noted that in the Licensing Bill for England and Wales provision is made for the Secretary of State to issue, and from time to time revise, guidance to licensing authorities on the discharge of their functions. As will be seen later, 27 we are proposing the establishment of a National Licensing Forum which would keep licensing law and practice under constant review, and which would offer advice to Ministers as to ways of dealing with emerging problems or difficulties. If that proposal were to be accepted it would, we think, be desirable that Scottish Ministers should be given a similar guidance function to that which is proposed for the Secretary of State in respect of England and Wales since, no doubt, Ministers would wish to pass on to licensing boards the fruits of discussions within the National Licensing Forum, and licensing boards for their part would no doubt wish to take account of that when formulating or revising their own policy statements. For the foregoing reasons, therefore, we recommend:
38. Provision should be made to enable Scottish Ministers to issue, and from time to time revise, guidance to licensing boards on the discharge of their functions; and licensing boards should have regard to such guidance when formulating or revising their own policy statements.
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