Licensing procedures - traps for the unwary

Ian de Prez examines some of the procedural issues faced by licensing sub-committees, and considers a House of Lords committee's proposal that their responsbilities be transferred to planning committees.

Since the Licensing Act 2003 came into force a number of interesting and difficult issues of interpretation have arisen, but relatively little attention has been paid to the procedural obligations imposed on councils when they make licensing decisions.

However, the decision of the House of Lords Select Committee to recommend that council licensing committees be abolished, and their responsibilities transferred to planning committees is bound to focus attention on procedural issues.

So, this may be a good time to discuss licensing procedure, because there are a number of traps for the unwary which are likely to cause difficulty from time to time, even if this controversial recommendation is not actually implemented.

Before the implementation of the Licensing Act 2003 councils were responsible for public entertainment as it was then called, and late night refreshment, but not alcohol. Taxi and private hire licensing, and various other less commonly occurring licensing and registration functions added to the list.

Officers and members understood that a contentious licensing matter should be dealt with in a quasi-judicial manner. Committees were therefore required to follow the rules of natural justice; the rule against bias and the right to a fair hearing.

Planning decisions on the other hand have always been made in an administrative rather than a quasi-judicial manner. The difference between quasi-judicial standards, and the way in which planning committees (quite properly) operate is illustrated by:

1. The fact that planning decisions, even when contentious, are often delegated to officers.
2. The well–established rules against bias and predetermination when planning decisions are made, which do indicate an overlap with quasi-judicial standards, are limited in their effect by the Localism Act 2011.
3. Pre-meeting briefings of senior councillors by officers are common.
4. Public speaking at planning committees is of necessity severely limited, and when it does exist is entirely at the council’s pleasure.
5. Most notably, planning officers almost invariably make recommendations to the committee as to what the decision should be.

When the Licensing Act 2003 added alcohol licensing to council’s responsibilities, and placed responsibility for it alongside entertainment and late night refreshment under a single regulatory code, many of us assumed that hearings would continue to be quasi-judicial in nature. But in 2009 the Court of Appeal in Hope and Glory, a case which is mostly about other issues, said, almost in passing, that hearings under the Licensing Act were administrative in nature, not quasi-judicial. This caused some surprise at the time, but in fact a look at the Hearing Regulations reveals several points where what is required of the sub-committee does not fit with the rules of natural justice.

(a) Parties have a right to speak, but not an automatic right to ask questions.

(b) The attempt to create informality is indicated by the provision that the hearing should take the form of a discussion, lead by the chairman, and that cross-examination is generally not permitted. (Of course this is cheerfully ignored by many licensing lawyers!)

Licensing hearings, as a result, occupy a kind of middle ground between the administrative territory of planning decisions and the strictly quasi-judicial principles which still apply when we determine matters relating to sex establishments and taxi drivers. Hearings under the Licensing Act may not be quasi-judicial, but the hearing regulations (full title The Licensing Act 2003 (Hearings) Regulations (SI No. 44 of 2005) impose various obligations which do not apply to planning decisions. A hearing must take place, even if there is just one valid representation, unless the parties agree that it is not necessary, and if a hearing does occur, some oral participation is guaranteed.

The hearing regulations provide a comprehensive set of procedural rules for the conduct of hearings under the 2003 act, but those hearings are held by sub-committees to which the well-known provisions of the Local Government Act 1972 also apply, at least in theory; little thought seems to have been given to the overlap and possible conflict between these two codes. It almost seems as if the regulations were drafted without knowledge of the 1972 Act, or its applicability to council committees. One obvious difference that manifested itself quickly was the provision for hearings on TENs to occur at very short notice, without the usual notice period required by the 1972 Act, but there are a number of others.

Substitution and numbers

Substitution (of a regular committee member by a reserve) at council committee and sub-committee meetings is generally very common. From time to time doubts have been expressed as to the legality of the practice, but the commonly held view is that it is lawful. At the beginning of the municipal year a meeting of full council fixes the membership of committees. Membership may have to change in the course of that year if a member dies or resigns from the council. When substitution occurs we are, in effect, changing the composition of the committee, by necessity, just for one meeting. Substitution is particularly common at planning committees because their heavy workload and frequency of meetings means that even the most conscientious of members is not likely to make it every time, and the desirability of democratic accountability when contentious applications are determined makes a reduced committee unattractive .

But there is a problem with Licensing sub-committees that was illustrated by the MuMu case, which Professor Roy Light has written about in Local Government Lawyer. The 2003 Act currently requires licensing authorities to have a licensing committee with at least ten, but no more than fifteen members. Section 9(1) of the Act states that a licensing committee may establish one or more sub-committees consisting of three members of the committee. It is interesting to note (from the use of the word 'may') that there is no strict obligation to create sub-committees at all. In theory the full committee could deal with every matter, but in real life this would be impractical and undesirable. The precise wording of this sub-section seems to imply that the committee will divide its membership into several standing sub-committees to which work will be allocated in turn, but practical reality dictates that for every hearing an ad hoc sub-committee will be created, with three members (and hopefully a reserve) who are available to sit within the short time frame within which a hearing must take place, and not prevented from doing so by a conflict of interest. I suggest that the effect of the legislation is that a sub-committee must consist of no more and no less than three members, who are all regular members of the main committee, with any reserve member also a member of that committee. The point is that a substitution would not be a true and valid one, because there is no gap in the membership of the main committee. Some councils apparently rely on their own constitutional provisions to allow a three member sub-committee to proceed on the day with two members present. If this is lawful (which I doubt) it is surely not desirable. The Select Committee sensibly recommends that the hearing regulations be amended to put the matter beyond doubt. If more flexibility concerning substitution is desired, the primary legislation in section 9 should be amended.

Once, long before MuMu drew our attention to the issue, I saw the principles I have set out here broken, with the best of motives, to allow the determination of an application by a club affiliated to the political party to which most of the council’s members belonged to be made by a sub-committee which did not have that possible conflict of interest. With hindsight the better course was to rely on that line of case law which holds that the administrative business of government must carry on, and should not be impugned if a decision making situation which is not ideal is forced on the council.

Minutes

The hearing regulations require that a ‘record’ be taken of the hearing in a ‘permanent and intelligible form’ which shall be kept for six years from the date of the sub-committee’s determination or if there is an appeal, the determination of that appeal. Councils usually refer to these ‘records’ as minutes, as if it were any committee or sub-committee of the council. However, this may be misleading. It is a record, pure and simple. It is not possible for this record to be checked, amended and signed at the next meeting, because there is no next meeting. This particular combination of three councillors might never meet again; the sub-committee ceases to exist as soon as it has done its job. There is no precise definition of minutes in any statute or case law. The one absolute necessity for the minutes of any other council committee is that they record accurately the resolutions passed at the meeting. When they go further, the most common practice is to provide a concise distillation of the discussion, rather than an exhaustive transcript. A licensing hearing record ought to be more detailed, given that the decision may need to be defended in an appeal, in which the strength of its reasoning will be examined.

Keeping order

Regulation 25 allows the council (i.e. the sub-committee) to require a person behaving disruptively to leave. It is cast in simple terms. Some councils’ standing orders may provide for the chairman to give a warning before any exclusion takes place, In these situations it is probably best to avoid any argument as to whether the hearing regulations override the councils’’ standing orders and make sure that you comply with both.

Adjournments

Council committees generally may decide to postpone a decision, and have freedom to do so as long as they act reasonably. Reg. 20 is rather more precise and restrictive in the duty that it imposes on licensing sub-committees. The most important point to note is that if a hearing is adjourned, it must be to a specified date.

Documents

Reg. 18 of the Hearing regulations provides that at a licensing hearing a party may rely on documentary or other material produced (meaning at the very least, sent to the council) before the hearing, If it is produced at the hearing itself , the agreement of all parties is necessary, Again, the use of the word may is important. This gives the council the power but not the absolute duty to consider the documents/information. There might be an occasional case where it is right to decline to receive information of a highly complex or technical nature that appears very late.

There is of course no comparable rule relating to other council committees/sub-committees.

Exclusion of the public

This is the point at which the inconsistency with the 1972 Act is clearest. Perhaps it has not attracted any attention because it is so rare for it to be invoked. Whereas the 1972 Act provides a list of categories of exempt information, which must be at risk of disclosure before the press and public can be excluded, regulation 14 has a simple test. The hearing should be in public unless the public interest in excluding the public outweighs the public interest in the hearing taking place in public. The possibility of a party to the case being excluded along with the press and public (Reg. 14(2)) underlines the administrative rather than quasi-judicial nature of these hearings.

Retiring/Making the decision

Other council committees make their decisions by passing resolutions, although in the case of planning committee a resolution to grant permission does not itself constitute planning permission. Licensing sub-committees and their officers often overlook Reg. 26 which provides that in most cases the decision must be made within five working days of the last day of the hearing. Although we may not need to make full use of this very generous provision very often, my own experience suggests that it is good practice to take as much time as is needed to make the decision, and to put the reasons for it into writing, so that it can be announced in full. I know that in some places the practice is to announce the decision, and say that reasons will be given later. Since there is a statutory duty to give reasons, this kind of announcement cannot amount to the making of a decision, it is rather an indication of what the decision is going to be. Since councillors are inevitably more identifiable and contactable than judges or magistrates, this might expose them in some cases to unwelcome attention and pressure. I remember a case, where a senior member, not on the committee, who was nonetheless interested in and disappointed by the result of a hearing, asked me if the decision was final, and it was with some relief that I could say yes. The regulations indicate (reg.33) that clerical mistakes in a decision or other document may be corrected. The fact that it was found necessary to spell this out indicates that any more significant alteration is not permissible.

Conclusion

I set out with the intention to write a dispassionate analysis of procedure, but I cannot resist saying at this point that the Select Committee’s proposal to transfer licensing business to planning committees seems to be based on an oddly romanticised view of planning decision making and the level of public satisfaction with it.

If the recommendation is followed, planning committees will find themselves, not only dealing with another area of law, but with two sets of procedures which differ considerably. The differences between the long established law relating to local government committees and the licensing hearing regulations will be unavoidable. One possible solution is to repeal or radically simply the hearing regulations, to make licensing procedures consistent with planning and other procedures. This would lead to the loss of some positive features of the licensing regime, particularly the right to participate orally in the hearing, and the quality of written reasoning in the good licensing decisions.

Philip Kolvin QC writing in the Journal of Licensing in 2014 said "Licensing officers should not be afraid to make recommendations , whether …as responsible authority or simply acting as professional advisers to the sub-committee . Planning officers perform that function daily - it is an important part of what they do…..I strongly believe that exactly the same applies to licensing officers .They are there to assist their lay members in the same manner as local government officers of all disciplines and should not be cowed from doing so by the antique and now discredited concept that sub-committee sit quasi-judicially"

I broadly agree with this, and do not doubt that it is correct in law, but I am not sure that licensing sub-committees want a replication of what occurs in planning committees, where a recommendation is made in virtually every case, even where the planning balance is quite a fine one, and a different view of it to that of the case officer may be quite reasonable. A planning officer’s report will be detailed and a court dealing with a legal challenge will usually assume that the committee have adopted its reasoning unless the contrary is indicated. Where there is a refusal the reasons are briefly expressed and often formulated by officers after the meeting. There are all sorts of reasons why this is a necessary and sensible way to proceed when dealing with planning matters, but licensing decisions are made in a way that allows members to demonstrate a more direct ownership of the decision .

Ian de Prez is a Solicitor Advocate and Litigation lead lawyer for the Suffolk Coastal and Waveney District Councils. He will shortly be joining the shared legal service for the West Suffolk councils.