Recently, Tom Johnston, managing partner at Young & Partners LLP, a law firm with offices in Dunfermline and Glasgow, wrote in the Law Society’s Journal about a fresh wave of “hell” being swept into Scotland under new licensing laws. See his article here. See his contact details here. Having experienced the chaos in September 2009 first-hand, working with some of Scotland’s largest alcohol suppliers and sellers, WardblawG agrees with most of what Mr Johnston has to say and, so, would like to reinforce Tom’s comments and, indeed, add from its MD’s own personal experience of the grueling inception of the Licensing (Scotland) Act 2005 in Scotland (the “Act”).
Liquor Licensing Law in Scotland
The Act, available here, was drafted by the late Lord Gordon Nicholson CBE and his committee. View his obituary here. I do not intend to explore too much of its substantive detail. For such expert commentary, see Cummins, Licensing (Scotland) Act 2005, 2nd ed, 2009, available here, or Scott Blair’s commentary here.
And, contrary to anything I might say below, I do believe that the Licensing (Scotland) Act 2005 is a good thing, as is control of alcohol sales and consumption. And its drafting is a credit to Scots law. But its implementation has, with respect, been a complete shambles at one of the worst times in Scotland’s economic history. Think I’m joking? I am not joking. Read this article, for instance which states that, at June 2010, hundreds if not thousands of businesses are trading strictly in violation of licensing laws because their premises have not yet been issued a premises licence, through no fault of their own and, indeed, despite having forked out thousands of pounds each to pay for the licences: where has their cash gone?! It is not surprising that Stephen Purcell resigned from office, overseeing one of Scotland’s toughest licensing boards at a time when the country’s licensing regime lacked leadership. See here for more on Stephen. Personally, I know that Stephen tried his best for major Glasgow businesses to be able to trade by the 1 September 2009 deadline, despite an obstinate Glasgow licensing board.
There are two major issues: first, excessive bureaucracy and red-tape designed for the public sector to rake in money from businesses; and, second, ambiguities which no-one can seem to clarify publicly. This stems from two possible reasons: either, first, the decision maker, whoever it may be, is sitting on the fence with key judgment calls; or, second, and perhaps most worryingly, there is no decision maker. I fear it is this lack of decision-maker or leader or boss, or whatever it is to be called, that is badly missing from the Scottish licensing regime. Why has a massive petition not yet been lodged to Holyrood? Probably because those who are in charge of separate parts of the licensing regime, e.g. boards, trainers, police, firemen (yes, the fire chief constables have a role in this too) and advisers have been too busy either hogging work and cash and, thereby, their jobs, or legitimately trying to do their best for Scottish business and the Scottish public.
The solution, as I suggest below, is that we should create one main licensing authority, with all licensing boards becoming a subsidiary of that authority. Yes, it might look like additional bureaucracy, but what we have at the moment is a flock of disjointed licensing board sheep missing a shepherd. Perhaps this new body might justly shear the wooliness out of the new Act.
First, to bureaucracy: the Act demanded and, indeed, still demands far too much of it. Two of the most annoying measures in this respect, for businesses and practitioners, are personal licences and personal licence training:
“Personal licences” are required for everyone selling alcohol in Scotland, which cost £50 each, which are usually printed on cheap A4 and reproducible by anyone, with no economies of scale taken into account for large businesses with multiple licence holders. The idea of personal licences for everyone selling alcohol is, arguably, useful in principle. But, despite the hard work of licensing board staff throughout Scotland, its implementation has been scruffy: not even mentioning the disaster that was 1 September 2009, take, for instance, the mandatory police interview: the police licensing team has to approve each individual’s personal licence after dragging people away from their businesses. I was told personally by one officer in Edinburgh that only one or two individuals out of thousands had been refused the grant of a personal licence. Now, if people with drink driving convictions should still get a personal licence, does it really take an interview to determine those who shouldn’t get one? How much time and money has that interview process cost businesses? Too much, especially in a recession;
“Personal licence training” is required for everyone to become a personal licence holder. It is essentially just a fancy way of saying that they have to read a list of mandatory conditions here and have to know not to sell to youngsters or those who look like they’re about to collapse through alcohol consumption. But the training was not given statutory form through the Act; instead, the Act prescribed only what should be covered in the training, leaving it for employers, training companies or, indeed, lawyers, to create their own training manuals. Again, what a senseless waste of time and money for businesses. Look at who has profited from this: companies who “train” people up to take an SQA-approved test that is almost impossible to fail, even if you didn’t manage to pass your Highers. Granted, the cost of sitting the ultimate test is, perhaps, acceptable, but the tie-in with training is not;
Please have a seat on our fence!
Second, the Act and its implementation creates three ridiculous ambiguities and insinuations without any explanation to clarify what is meant: it is as if the drafters of the legislation wrote it, then forgot to put someone in charge of implementing it, or, if they did, they forgot to tell them what it meant or forgot to tell them how to publish guidelines:
No Duty to Trade
The first of these insinuations is that there might be a duty on premises licence holders (i.e. alcohol sellers) to operate their business for every single one of the hours for which they had a licence to sell alcohol. This has become known as a potential “duty to trade”. Commentators, lawyers and, worst of all, the public sector are still sitting on the fence with this issue, saying that it might exist. But, if you live in the real world, how can you possibly force someone to keep their shop open until the last minute of the day for which the Licensing Board has granted them a licence? Of course you can’t. A licence is just that: permission to opt in to do something; not a mandate to sell alcohol, which would in fact fly in the face of the purpose of the legislation: to restrict alcohol sales and abuse.
Compare that to keep-open clauses in commercial leases where there is a very real threat of damages for closing early or, most commonly, a threat of specific implement (specific performance in England).
Well done Tom!
Thankfully, at least one practitioner has voiced what many of us were too scared to say. Tom Johnston, managing partner at Young & Partners LLP, noted almost heroically in response to editor Peter Nicholson’s question if there was a “duty to trade” that:
“That’s one of the easier licensing questions – it does not exist.”
However, as Tom also explained, the question continues to raise its head from time to time, and so he has provided a comprehensive commentary here.
No duty to keep stock promotions stocked
The second issue, and even more ridiculous than the duty to trade suggestion, mandatory condition 7(b), found here, has scared businesses into thinking that if they have a price reduction for a certain alcoholic product, they must keep that product stocked throughout the minimum promotional period of 72 hours. While, yes, they have to keep the promotion active for at least 72 hours, they are of course allowed to run out of that product without replacing it. An explanatory note to that effect would have been most welcome; again, the implementers of the Act have failed to make a basic legal distinction clear to the public and, perhaps, to themselves: a licence is a permission to do something, not a duty to do something, albeit that a licence brings with it certain conditions. Of course it is extremely important for some businesses to have and maintain their licences to sell alcohol, but that does not mean that licensing boards can terrorise businesses into believing and procuring practical and commercial irrationalities.
Who you gonna sue?…Ghostbusters?
The third ambiguity is caused by the government or, perhaps, licensing boards not making it clear who might be liable under the legislation. An example, a business which operates holiday tours, which does not have nor need a premises licence, and which occasionally exterminates ghosts (“Ghostbusters”) does not, rightfully, have a clue about its liability and is pulling its proverbial corporate big wig hair out at the lack of legal certainty here. Ghostbusters advertises on its brochures and its website a free bar at pubs organised by premises licence-holding pub landlords, at which Ghostbusters’s tour customers will drink and be accommodated. Ghostbusters wants to know if it, as the holiday package company, would be liable for the acts of the pub landlords or even the pub’s bar staff, which might all stem from or result in illegal acts of members of the public, perhaps with someone becoming rowdy and making a racial slur against lawyers, perhaps because they’ve been charged a fortune for advice which the government really should have publicised already.
Following the legislation through with several mugs of Super Java, I tried to work this out and, being redirected and cross-referred about 6 times, discovered an argument to say that the holiday company could potentially be liable, but in practical terms only really if they held themselves out to be a company procuring free bars across Scotland. Of course, the free bar promotion was just one small part of its holiday packages so in practical terms, no reasonable Ghostbuster should even think that they might be held liable. But now caution must be taken, because there are very few decent guidelines available to the public.
On the one hand, it is a good thing that the Act veers on the side of caution. But, on the other hand, there are very real limits to vicarious liability and, if this holiday company were to be prosecuted, which could, under the Act be in the form of damages of up to £20,000, it would almost be a new legal doctrine in Scotland of being able to sue fourth or perhaps fifth parties which are too far removed from the initial offence.
I am not the only one who shares this view or, perhaps more aptly, blindness: Tom Johnston wrote in the Journal:-
It will not only be the licensee who can be convicted. The list of potential accused will include any “interested party”. This can include the owner or person having management or control of the business. Remarkably, it can also include the owner of the building. A leisure park near my office is owned by Grosvenor Estates. It has a dozen or so licensed premises. If His Grace the Duke of Westminster (or any other property owner who lets property for use as licensed premises) wants to stay out of Saughton or Barlinnie Prisons, he will require a due diligence strategy. I’m not sure I currently know how to prepare that, but when the shock of this fresh hell has passed and I have recovered the power of speech, I’ll think of something.
Fair enough, when the Act was drafted, spirits (no pun intended) were high and there were good intentions. But when an economy starts to fail, controlling alcohol consumption to extreme levels should not be a top priority for the Scottish, nor any, government.
What should be done?
Commentators have and will continue to suggest improvements. But what WardblawG would like to see are three main changes:
First, a comprehensive set of guidelines and FAQs on the Act made available for free to the Scottish public on the web, not just by FOISA request.
Second, a template training module accessible online for free, published by the Scottish government; and
Third and most importantly, the creation of a licensing board that heads up all the other licensing boards in Scotland which provides a real leadership role and which should, hopefully, unite the licensing boards of Scotland.
In the words of WardblawG’s friend Professor Jeremy Phillips of the IPKat yesterday morning, available here,
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