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Licensing news England and Wales - August 2017

This month in summary:

Institute of Licensing and TLT to provide training for councillors and licensing officers on licensing hearings

Dates in September have been announced for the Institute of Licensing Hearings Training courses. We have worked with the IoL to put together a day's training, culminating in a 'mock hearing', designed to benefit all parties involved in licensing hearings.

A link to the course brochure can be found here.

The courses are still available on the following dates:

13 September – Solihull

14 September – Ely

More information and details on how to book can be found here.

Supreme Court rules on 'Hemming' case

The Supreme Court handed down its ruling on 19 July in relation to whether local authorities and other regulated bodies could charge licence holders for administrative and enforcement fees in relation to any licences they administer. The case related to a number of sex shops in Westminster who had brought proceedings against the local authority in relation to the high fees they were charged annually for their licences to operate. It was argued by the council that they were entitled to charge high fees as although the administration of the licences may not be expensive, enforcement action taken against unlicensed operators was, and as it benefited the licence holders, the cost should be theirs.

It was argued by the operators that only a reasonable fee for administering the process could be charged by the authority and that under Provision of Services Regulations that were brought in following an EU directive, any fees charged for enforcement against unlicensed operators were illegal. When the Court of Appeal found in favour of the operators, Westminster Council were forced to make repayments of over £1 million to them. However, they appealed the ruling.

The Supreme Court disagreed and determined that the council was entitled to charge a fee for both the administration of the licensing regime, but also for enforcement against unlicensed operators if the enforcement element was only charged to applicants who had been successful with their licence applications -  i.e. the fee was itemised and paid in two distinct parts. Both parts of the fee had to be reasonable and the council had to calculate the actual costs they incurred and levy the fee accordingly.

However, the Supreme Court asked for a ruling from the European Court of Justice whether it would be lawful for a council to ask for the total fee for administration and enforcement up front, when an applicant applied for a licence, on the basis that the enforcement part of the fee could then be refunded to unsuccessful applicants. The Court of Justice ruled that this would be illegal.

When remitted to them, the Supreme court determined that whilst the Westminster scheme, which had for years demanded the payment for administration and enforcement in full prior to the licence being granted, the illegality of doing so was of very little practical importance. The sex shop operators bringing the case all had licences, and therefore were all obliged to pay the enforcement part of the fee in any event on grant of their licences. The fact that they had been charged a little early in the process really had very little consequence. Only those applicants who had been refused a licence, or had not had it renewed, but had paid the enforcement part of the fee would be entitled to a refund.

Moving forward, however, applicants for licences for sex shops, street cafés, sexual entertainment venues, marriage licences or any form of licence where a local authority or similar body sets the fee and includes an element of enforcement action within it, can expect to have to pay both on application or renewal of their licence for the administering of the process and then make a second payment on grant of the licence prior to the licence being deemed valid to cover enforcement. Hopefully any delays in having to invoice applicants twice and process payment won't create an unnecessary frustration for operators of businesses waiting for their often very expensive licences!

Gambling News

Gambling Commission consult on updated guidance on anti-money laundering and financing of terrorism for casinos

The Gambling Commission has announced a consultation to run until the 8 September on proposed changes to their guidance issued to casinos relating to preventing money laundering and the funding of terrorism. The guidance applies to both 'bricks and mortar' and online casinos. It follows changes to the Proceeds of Crime Act 2002 and the introduction of The Prevention of Money Laundering, Terrorist Financing and Transfer of Funds (information on the payer) Regulations 2017.

Proposed key consultation points in relation to the guidance are:

  • Changes to the customer due diligence (CDD) threshold, where any transaction of €2,000 or more, whether as a single transaction or via several operations that appear to be linked trigger the CDD requirement. The rules already apply to established business relationships, suspected money laundering or terrorist financing or doubt as to the veracity or adequacy of documents or information previously obtained but now add the €2,000 threshold in relation to CDD. The measures will apply to wagering of stakes, purchase of tokens, payment for use of gaming machines, the deposit of funds for remote gambling and also to the collection of winnings and withdrawal of funds. 'recycled' winnings, 'turnover' or 'churn', however the operator defines re-invested winnings, are not included in the calculation for the €2,000 threshold.  Existing rules requiring CDD measures to be applied at other times on a risk-based approach and also where the operator becomes aware that the circumstances of existing customers have changed to be retained.
  • Money Service Business activities in non-remote casinos to remain supervised by the Gambling Commission, rather than being jointly administered by the GC and HMRC.
  • The outsourcing of 'nominated officers' will no longer be permitted following changes to the Regulations.
  • Politically Exposed Persons (PEPs) definition has been expanded in the Regulations to include UK individuals entrusted with prominent public functions. Enhanced CDD will be required for UK citizens with such roles as well as overseas citizens.
  • Changes to the guidance and when reliance on third parties and simplified CDD will be permitted.

Details of the consultation can be found here.

Gambling Commission announces release of tool to allow consumers to make complaints online

This new online tool, Resolver, supports consumers making complaints by explaining their rights to them and then assisting in the preparation of complaint emails. The tool also lets the consumer know how to escalate the issue, for example, the option to refer the matter to the operator's ADR entity.

The introduction of such a tool is in keeping with the Gambling Commission's push to put consumers first and is perhaps a reaction to their review that found that the complaints system is not working for consumers with many finding it difficult to access and time consuming. The use of the Resolver system will be welcomed by the industry if it assists consumers in identifying valid complaints and streamlines the process.

Out and About

July, something of a damp month compared to the sunshine of June, had an effect on a number of events in the month. Harbourside Festival in Bristol had a particularly wet Sunday, with attendance down by 40% on last year's figures for the day. Y Not festival was forced to cancel the event when the weather worsened, leading to safety fears. We can only sympathise when so much hard work is ruined by the pernicious British weather. Here's hoping for a better August for all events organisers.

For TLT's licensing team, the weather did not prevent us attending meetings, hearings and events around the country; Milton Keynes, Godalming, Northampton, Bristol, Cardiff and various London boroughs were all visited during the month and applications made for new licences and contentious variations. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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