Important developments to liquor licensing laws

As of 29 June 2018, Licensing Standards Officers will have far greater powers of entry, inspection, and seizure at licensed premises, providing much sharper tools for investigation and enforcement work.

7 May 2018

The powers that can be exercised by Licensing Standards Officers (LSOs) are changing. As of 29 June 2018, LSOs will have far greater powers of entry, inspection, and seizure at licensed premises, which will provide much sharper tools for investigation and enforcement work.   Specifically, section 15 of the Licensing (Scotland) Act 2005 (the 2005 Act) is to be amended. (*)   At present, licence holders will be aware that LSOs are entitled to enter licensed premises in order to inspect the premises, and any substances or documents found there as the LSO thinks necessary. That much will not change.  

Enhanced powers for LSOs

But, the changes to the 2005 Act will soon also allow LSOs to:   (1) take copies of any documents found on the licensed premises; and (2) seize and remove substances, articles or documents found on the premises.    That includes requiring the production of any document stored in electronic format.    This will place the powers of LSOs on a footing similar to that of other officers involved in regulatory enforcement – for example, inspectors of the Health and Safety Executive who have had powers to inspect and seize documents for many years.  

Why is it important for licence holders to be aware of this change?

The importance of licence holders being aware of this legislative development cannot be stressed enough.   If a licence holder is not up-to-date with the powers of the LSO, and wrongly refuses to allow inspection and seizure of relevant documents or fails to reasonably comply with a LSOs requirement (having knowledge only of the LSOs more historic powers), the licence holder will have committed an offence and, if prosecuted, will be liable to pay a fine.   Of course, it is to be hoped that these new powers will not be implemented by LSOs in an over-zealous fashion, with documents being seized and copied only in appropriate and relevant circumstances.    Seeking out timely legal advice will also be important to ensure a licence holder doesn’t fall foul of the new provisions.  

Provision of Information to Licensing Boards

These new provisions supplement further powers recently granted to LSOs which directly impact upon personal licence holders (or those looking to hold a personal licence).     In relation to applications for the grant or renewal of a personal licence, the Licensing Board must now give notice of the application to a LSO (in addition to the chief constable), and the LSO has a wide entitlement to provide the Licensing Board with “any information in relation to the applicant that the LSO considers may be relevant”.   As for regulating behaviour of existing licence holders, it is important to be aware that a LSO also now has power to report a personal licence holder to the Board.  If a LSO considers that person, who is or was working in licensed premises, has acted in a manner inconsistent with any of the licensing objectives, the LSO may report the matter to the Licensing Board.     The Board, in turn may, hold a hearing to consider the LSOs report, and which may have potentially serious consequences for the personal licence holder.  

Minimum Unit Pricing

The granting of increased powers to LSOs is not the only significant change that is happening in the liquor licensing sphere. On 1 May 2018, Minimum Unit Pricing (MUP) came into force in Scotland.    Although delayed by several years of litigation through the Scottish courts and all the way to the UK Supreme Court, the Alcohol (Minimum Pricing) (Scotland) Act 2012 (“the 2012 Act”) now introduces, as a mandatory condition of a premises licence, a provision that alcohol must not be sold on premises at a price below the minimum price.    Section 1 of the 2012 Act sets out a formula for calculation the minimum price of alcohol, with the Scottish Government setting the minimum price per unit at 50 pence.  

Consequences for licence holders?

Failure to adhere to this legislative change will have significant consequences for licence holders.    As MUP is now a mandatory condition of a premises licence, selling alcohol in breach of the MUP will be a criminal offence (since, in such circumstances, alcohol would be sold on premises in breach of the terms of a premises licence, and thus would be an offence in terms of section 1 of the Licensing (Scotland) Act 2005). Such an offence carries with it a potential fine of up to £20,000, or a period of imprisonment not exceeding six months, or both.   However, that would not be the end of a licence holder’s worries. A breach of the mandatory conditions is one of the grounds upon which a review hearing may be applied for or proposed. The ultimate sanction open to a Licensing Board if a ground for review is established is the revocation of the licence. That is a sanction that would have serious commercial, financial, and reputational consequences for the licence holder.   Should you have any queries, please don’t hesitate to contact a member of the Licensing Team.   (*) For those especially keen to know the detail of the implementing legislation, section 15 of the 2005 Act is amended by section 197 of the Criminal Justice and Licensing (Scotland) Act 2010, with section 197 being brought into force by the Criminal Justice and Licensing (Scotland) Act 2010 (Commencement No.15 and Saving Provision) and the Air Weapons and Licensing (Scotland) Act 2015 (Commencement No.8) Order 2018. Hardly the snappiest of titles!