Occasional licence regime overhaul should be considered in context

Out-Law Analysis | 11 Jun 2019 | 12:38 pm | 3 min. read

Proposed changes to the rules for granting occasional licences in Scotland should be viewed in the context of the alcohol licensing regime as a whole.

The Scottish government is seeking views on whether the current £10 fee for an occasional licence is appropriate, and whether it should impose limits on the number and length of occasional licences a premises licence holder or personal licence holder may obtain. It is doing so in response to concerns that licence holders are using multiple occasional licences as a means of circumventing the principal licensing system, avoiding the cost and scrutiny associated with a full, permanent licence application.

But whilst there must undoubtedly be proper regulation of those genuinely attempting to get round more robust scrutiny of an application, that must be in the context of adequate infrastructure being put in place to allow full applications to be processed effectively, and in a timely manner.

An occasional licence is one of two ways in which a premises can become licensed in Scotland. It lasts for 14 days, and there is a one-off application fee of £10 per application. The cost and process of obtaining an occasional licence is relatively simple when compared to that associated with obtaining a full premises licence. There are no automatic public hearings, and no limits on the yearly number of occasional licences for which a non-voluntary organisation may apply.

By contrast, applicants for premises licences must lodge layout plans conforming to statutory requirements with the licensing board, which themselves are often costly to create. The application is publicly advertised, and a public hearing is required. A premises licence application carries an upfront cost of up to around £2,000, and an annual fee is then payable.

... there is a clear distinction between using a process designed to be temporary to usurp a more costly and involved permanent one, and using it as a 'stop gap' while minor issues are ironed out during the permanent licensing process

The rationale for an occasional licence is to temporarily licence an area which is usually unlicensed. This could be, for example, a marquee on the grounds of a hotel, an external seating area during the summer months or an event-specific area, such as during a food fair at a conference venue or to provide a temporary bar during the Edinburgh Festival. The temporary nature of the licence is reflected in the low cost and minimal administrative burdens involved.

What often happens in reality is the extended use of occasional licences by some operators, with multiple licences lodged to run concurrently over a period of months or even years. Because of the high demand on licensing boards and related authorities, these multiple applications often do not come to light until a significant period of time has elapsed. Where this happens, the latest occasional licence application will be heard by the licensing board and the fate of that and future applications will depend on the factual circumstances behind the application - as well as the composition of the board on that particular day. Because of the timing of board hearings, if an application is refused, a premises may have to stop serving alcohol within hours of the decision.

While the Scottish government is right to flag the potential for abuse in the system, the demand on licensing boards is such that operators often have to rely on multiple occasional licences to avoid potential gaps in trading where the confirmation of a provisional premises licence application is delayed. In the normal run of events, an operator planning to open new premises will apply for a provisional premises licence application, often well in advance of opening date or even construction. If granted, the applicant must then apply for 'confirmation' once the premises is ready to open.

In theory, confirmation is an administrative process, requiring the applicant to obtain relevant forms from building control, environmental health and others with the board. In reality, overburdened licensing boards and relevant related authorities are often so inundated with work that they do not have the capacity to process confirmation applications in line with client expectations. For operators, the opening of new premises can be a major event, particularly in the case of a flagship hotel or new restaurant. In these circumstances, it is common for operators to apply for a back up occasional licence allowing them to trade from opening day, while the main process is being resolved.

The licensing regime in Scotland purportedly operates on a cost recovery basis, with licence and other fees covering the costs to the licensing board. It is difficult to understand how the current £10 application fee can possibly cover the cost of processing an application for an occasional licence, and it could be argued that this low cost has the potential to incentivise applying for multiple occasional licence over a full premises one for some operators.

That being said, there is a clear distinction between using a process designed to be temporary to usurp a more costly and involved permanent one, and using it as a 'stop gap' while minor issues are ironed out during the permanent licensing process. Any increased fees or limits on the occasional licence regime which emerge from the consultation must bear this distinction in mind.

The Scottish government's consultation closes on 16 July 2019.

Frances Ennis is a licensing law expert at Pinsent Masons.