Deep impact

Jeremy Phillips looks at the problems surrounding cumulative impact zones.

Licensees will by now be familiar with the concept of the Cumulative Impact Zone applying to a concentration of premises in town and city centres across the country. Within such areas the possibility of extending licensing hours, let alone gaining a new licence, is often remote. The ‘impact’ of such zones, however, may not only be an issue for those seeking to extend their business operation, or even develop a new one, but also those who already have an existing business, for which they may have potentially disastrous consequences.

Most operators will be familiar with the consequences of the effect of such policies, once adopted, namely that where objections are raised, applications for the grant or variation of premises licences or club premises certificates which are deemed likely to add to the existing cumulative impact will normally be refused, unless the applicant can demonstrate that there will be no negative cumulative impact on one or more of the licensing objectives. In practice, ‘proving a negative’ is likely to be extremely difficult.

The standard formula for a CIZ places the onus on applicants to establish that the grant of a licence for the chosen site will not add to the problems already identified in the area. This approach is in stark contrast to the general scheme of the Act, which entitles applicants to the grant of a new licence or variation[2] unless those raising objections can establish that the new licence will compromise ‘the prevention of crime and disorder’, ‘public safety’, ‘the prevention of public nuisance’; or ‘the protection of children from harm’[3].

In such circumstances even the proffered surrender of an existing licence is likely to be of no avail, unless the premises are proximate, of equivalent size and trading.[4] Of course, as the Guidance makes clear, a licensing authority may only adopt such a policy after it has considered evidence which persuades it that such a step is ‘appropriate’[5]. It can be argued that such a transparent, evidence-based approach is rather fairer than the system previously adopted by licensing justices who, whilst dealing no doubt with each individual application on its own merits (as they were bound to do), would tend in certain areas to refuse applications based upon their own perception of the absence of ‘need’ or (rather different), ‘demand’.

The difficulty with that approach was that it was notoriously difficult for any applicant to predict in advance the reception he/she was likely to encounter, depending as it did upon the precise location (there was no helpful map delineating the boundaries of the relevant areas), the character of the applicant, the style of the operation, the precise conditions offered and so on. On the other hand, it can certainly be argued that the rigidity inherent in the new approach (as applied by certain authorities), can on many occasions result in outcomes which are both unnecessary for the community and harsh on the individual applicant, particularly where the latter is seeking merely to reinstate a licence that another has foolishly lost.

So, the question remains: are such policies really necessary? Why can authorities not simply refuse applications in such locations on the basis that the concentration of existing outlets would be likely to lead to unacceptable levels of crime, disorder and public nuisance? The answer, of course, is that they may.

As the Guidance points out: "The absence of a special policy does not prevent any responsible authority or other person making representations on an application for the grant or variation of a licence on the grounds that the premises will give rise to a negative cumulative impact on one or more of the licensing objectives."[6]

In practice, however, it will always be more difficult for objectors in such circumstances to secure the refusal of an application, given that the onus will be on them to establish that the grant of the licence is likely to have such an outcome. The logic of a CIZ policy is that there should be no need for objectors to adduce such evidence in cases where the authority has already ascertained, following consultation and a broad review of the available data, that the grant of so many licences in the area has already led to unacceptable outcomes.

Nonetheless, as I have suggested, in certain circumstances such policies can have very serious consequences for certain individuals. What steps should they take to protect themselves?

First, just as every operator would be very well advised to seek the advice of his/her solicitor, or direct access barrister, immediately there is a hint of a review being brought by the police, EHO, residents, or even (now) the licensing authority itself, that rule applies with even more force in the case of premises within a CIZ. Advice taken at such a stage might cost a few hundred pounds and retrieve the situation; taken later several thousands may well be unable to achieve a similar effect.

Similarly, such zones may have a significant impact upon a freeholder who decides to let his property for a licensed use. The first might be for the party with a relevant interest to protect[7] to avail itself of the little-used provision afforded by s.178. That allows for the lodging of a prescribed form and fee, so as to formally register the property interest in the premises. Once done, any change made to the licensing register which relates to the relevant premises at a time when the notice has effect, must be notified forthwith by the licensing authority to the person who gave the notice. The (twenty eight) matters to which that person is entitled to be notified are set out in full in Schedule 3, but include (critically): notices given under section 28 (surrender of premises licence), applications made under section 51 (review of premises licence) and any notices given to it under section 165(4) (determinations made after closure orders). Currently the cost of such annual registration is £21.

An additional step taken by some operators has been to seek a second premises licence for the property (there being no provision corresponding to that found in s.152(1)(b) Gambling Act 2005, which prohibits the grant of two licences for the same premises). There may, however, be an argument in a particular case as to whether such an application is consistent with s.16(1)(a) of the 2003 Act, which sets out the categories of persons who may apply for licences.[8] Furthermore, some authorities have been reluctant to grant second (or ‘ghost’) licences, even to the point of being prepared to treat the application, wholly artificially, as an application for additional licensed premises.

Finally, what general advice might their property lawyers be providing before the grant of such a lease? With the increasing prevalence of such difficulties in recovering licences in CIZs, solicitors might at some stage in the future be held to be on notice as to the reasonable prospect of such a problem. Then the question will arise “Would the client have proceeded differently had it received more comprehensive advice?".

That, with the benefit of hindsight of the particular difficulties that did emerge, will always be the $64,000 question, as they say! To date I am unaware of any cases where such actions have been brought, much less been successful. It may well be that a court would hold that to tender such advice would go well beyond that which might be expected of a ‘reasonably competent practitioner, having regard to the standards normally adopted in his profession’. Nonetheless, to minimise any such possibility and, not least, save their clients considerable anxiety, property solicitors might be well advised in future to advise lessors of the significant additional risk of letting licensed properties within any area so designated.[i]

Jeremy Phillips is a specialist licensing barrister at Francis Taylor Building and General Editor of Paterson’s Licensing Acts.