Stephen McGowan: Coronavirus and licensing

Stephen McGowan: Coronavirus and licensing

Stephen McGowan

TLT’s licensing teams both in England and Wales and Scotland have answered some key questions on the uncertainty and disruption brought by COVID-19 and the potential impact on licences.

Please note that this article is of relevance to all licensed premises and where the law varies in England & Wales and Scotland, we have made this clear.

Q: After the announcement on 16 March to avoid pubs and clubs, do we legally need to close?
England, Wales & Scotland

At this stage, there is no legal mandate to force the closure of licensed premises. The Prime Minister has advised people to avoid pubs and clubs which may have the same practical effect in that you may be open when there are no customers.

Q: What does this mean for my insurance policy?
England, Wales & Scotland

We are aware of a large number of different policies so there is no “one-fits-all” answer on this. It is likely that your policy does not cover you for a voluntary closure but you must review the terms of your own policy and contact your insurance provider immediately. The position is changing rapidly so further advice on this may follow.

Q: We are about to complete on an acquisition which is conditional on the grant of a licence – what happens now?
England, Wales & Scotland

The reality is that decisions may be delayed and all parties to contractual matters will need to be sensible and flexible in these unprecedented times. A contract which is tied to a licence being granted may not be crystalised where the decision on the application is delayed. Parties need to speak to each other and their representatives and find a sensible, pragmatic solution. This is especially so now that licensing hearings are being cancelled across the country.

Q: What about payment of Sky and BT sports whilst there is no football on?
England, Wales & Scotland

That is a contractual issue with your providers. Unless or until they make any announcements as to what they propose to do to help customers likely to be experiencing cash-flow problems, we cannot anticipate what, if any, support they would look to give. However, in times where cash-flow is likely to be strained, then you may want to speak to them as soon as possible if you feel that this is going to be an issue. This is the same for any licence fee you pay, such as PRS/PPL etc.

We have been informed that SKY have cancelled all commercial contracts from 14/3/20.

Q: Will the government announce a full shutdown of all licensed premises?

England, WALES & Scotland

We will hear about this at the same time as you do. We will endeavour to react and offer the best advice we can on a daily, ongoing basis. Our licensing solicitors are still working and available to discuss all of your concerns and we will continue to support our clients through this difficult period.

Q: We have taken the decision to close our premises now. What happens to the licence?

In our view, nothing. Whilst the Act does contain provisions about licences ceasing to have effect where alcohol sales cease, that wording was clearly not drafted with such unprecedented measures in mind and in our view the purpose of those provisions is to strike at a permanent closure where the use of the premises changes. If you close voluntarily under the current circumstances, we say your licence is safe. In addition, should the government move to a mandatory close down of all premises, your licence would remain in place for when the close down period ends.

Q: We have chosen to stay open but this morning my DPM/DPS has called in sick and has to self-isolate. Do I need to do a minor variation to name a new manager?

In our view, no. The situation is no different to a DPM taking a holiday. If a person were off sick long term, then a decision might have to be made to replace them. At this stage our view is that you can leave the DPM on the licence.

Q: My business is cash driven and closure means likely insolvency. Will I lose my licence?

Insolvency does not affect personal licences. Your personal licence is safe if you are personally insolvent e.g. if you are sequestrated. The premises licence is another matter. If the premises licence is held by a person or entity which experiences an insolvency event then the 2005 Act requires the appointed insolvency practitioner to apply to transfer the licence within 28 days or the licence lapses. We are advising insolvency practitioners on these issues separately to make sure as many people as possible know what steps are needed to save a licence.

Q: I have an application pending – what happens now?

Local authorities are likely to be severely under resourced and you can expect delay even if the application is something like a minor variation which might be uncontentious. We are speaking with Scottish government and various bodies to see if licensing boards can move to make all decisions under delegated powers – without having to have a hearing – and we will advise as soon as we can. Licensing board hearings are now being cancelled across Scotland.

Q: We run a bar and restaurant. We have had calls about home deliveries, is this allowed?

In our view, an off sale licence is of itself explicit permission to allow home deliveries of alcohol. Many licences have explicit wording which also allow for home deliveries of food, and if your licence has this, then you are certainly good to go. Many licensing boards take the view that home deliveries of food need to be listed as a separate activity on the licence which can only be added by way of a major variation. In these unprecedented times we find it difficult to imagine that a restaurant delivering food to people who are self-isolating and in need of sustenance would be challenged if the wording on the licence was absent and are actively speaking with the Scottish government and other bodies to agree a national relaxation on this bespoke issue. We will update as soon as we can.

Q: We run a grocery shop. Our elderly customers have asked us to open early and give them a chance to shop. I have an off sale licence from 10am to 10pm. What is the position?

There is no doubt that you can only sell alcohol during your licensed hours so you must stick to those times. In relation to general opening to allow groceries, in many cases a licence will contain wording such as “the premises may open from 6am to allow for general retail” or similar. If your licence is silent on this, then some licensing boards take the view that you cannot trade prior to your licensed hours because the licence will not allow it and this can only be added by way of a major variation. However, as with the last question, in these unprecedented times we find it difficult to imagine that a supermarket or local shop opening at 6am to sell general groceries to vulnerable people would be challenged if the wording on the licence was absent but that being said we are speaking with Scottish government and other bodies to agree a blanket relaxation of this point.

Q: I have to pay my annual licence fee and Late Night Levy next month. Do I get any dispensation if I cannot open for a period of time?

All licensing fees in Scotland fall on 1 October each year so this is not presently an issue. There is no Late Night Levy or similar arrangement in Scotland so this does not apply.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Stephen McGowan: Coronavirus and licensing

Stephen McGowan is a partner at TLT LLP

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