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A REPORT BY THE TASK GROUP SET UP TO REVIEW THE LICENSING PROVISIONS CONTAINED IN THE CIVIC GOVERNMENT (SCOTLAND) ACT 1982
3. SECTIONS 24-27 - SECOND-HAND DEALERS
This part of the Act provides licensing authorities with an optional power to license second-hand dealers. It also contains provisions relating to the disposal of stock-in-trade, offences and the order-making powers of the court in the event a second-hand dealer is convicted of an offence.
3.1 The Task Group considered whether there is a continuing need to license second-hand dealers and whether the licensing of such dealers should remain optional. We concluded that there is a continuing need to have a licensing regime in place for second-hand dealers, both in terms of crime prevention and protection of the public but that there was no evidence to support it being made mandatory. Notwithstanding our conclusion in this regard, we nonetheless determined that licensing authorities themselves are best placed to judge the types of second-hand dealers businesses for which a licence is deemed necessary and the conditions which should apply to those businesses. While blanket coverage of all second- hand dealers would have the benefit of ensuring consistency across Scotland, we recognised that this could result in an unnecessary burden being placed on businesses which the licensing authority has decided do not require to be covered by the licensing regime.
Conclusion
The Task Group concluded that the licensing of second-hand dealers should remain optional and that licensing authorities should continue to be allowed to determine the classes of second-hand dealer to which any such provisions apply.
3.2 The Task Group considered whether the licensing of second-hand motor dealers should be considered a 'special case' and made mandatory, given that such a purchase is an expensive item, that it regularly tops the list of consumer complaints and that some dealers operate on a national basis. However, we considered that as practically all mainland authorities already license second-hand motor dealers there would be little practical benefit in making such provisions mandatory. Such a requirement would also force island authorities to adopt a licensing scheme even if they consider there is no need to do so in their area. We also recognised the fact that there is no licensing regime covering second-hand motor dealers in England and Wales.
3.3 We consulted on this and while a significant proportion of respondents favoured the mandatory approach we were unconvinced that there was sufficient evidence to support mandatory licensing. The Task Group felt that given the licensing requirements already in place for second-hand motor dealers, mandatory licensing would make little, if any difference. In coming to this conclusion, we also recognised that the Police and Trading Standards Officers already have extensive powers to regulate the industry and to tackle the consumer complaints which this industry attracts.
Conclusion
The Task Group concluded that there was insufficient evidence to justify the mandatory licensing of second-hand motor dealers, particularly given the fact that nearly all licensing authorities already do so and the fact that the Police and Trading Standards Officers have extensive powers in this regard.
3.4 We sought views in our consultation paper as to whether there was a justification for introducing a power to license brokers and agents who handle, but do not own, second-hand goods. In doing so, we were aware that pawnbrokers, for example, are already licensed under the Consumer Credit Act 1974. While there was some support among respondents for the introduction of such a licensing scheme, no substantive evidence was presented by respondents to indicate that a licensing scheme is required. Furthermore, no clear views were expressed as to what the definition of 'broker' or 'agent' should be, nor the types of businesses that would be covered by any such licensing scheme ( but see the separate comments on second hand motor auctions at Chapter 14).
Conclusion
The Task Group concluded that there was insufficient evidence to justify the introduction of a licensing scheme for agents and brokers in second-hand goods, which, in any event, could be argued as falling within consumer protection which is reserved.
3.5 We were disinclined to accept the recommendation in the COSLA Report that Section 24(3)(d) which provides for an exemption from any licensing requirement for a "business as a dealer in second-hand goods or articles incidental to another business not being that of a dealer in such goods or articles" be repealed. We were not convinced that the rationale for the repeal - that they allow car dealerships to be exempt from any licensing requirement if they sell on vehicles accepted in part exchange - was valid. We took the view that the exemption only applied when the dealer sold new cars and in doing so accepted second-hand vehicles in part exchange but did not actually sell these on to the general public. However, if they subsequently sold the second-hand cars taken in part exchange then a second-hand dealer's licence would be required. The consultation process established that while there may have been some confusion as to the application of this exemption in the past, it does not appear to be causing any particular problems at present.
Conclusion
The Task Group concluded that the exemption at Section 24(3)(d) which exempts businesses that deal in second-hand goods incidental to their main business should remain exempt from any licensing requirement.
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