Are you advising on Cumulative Impact Zones?

Most lawyers working with the licensed trade will by now be familiar with the concept of Cumulative Impact Zones (CIZ), which apply to town and city centres across the country. Within such areas, the possibility of extending licensing hours, let alone gaining a new licence, is remote. The impact of such zones, however, may not only be an issue for those seeking to extend their business operation, or even develop a new one, but also those with an existing business, for which they may have potentially ?disastrous consequences.

Operators are aware that once objections have been raised and such policies are applied, applications for the grant or variation of premises licences will normally be refused, unless the applicant can demonstrate that there will be no negative cumulative impact on one or more of the licensing objectives. This approach is in stark contrast to the general scheme of the Act, which entitles applicants to the grant of a new licence or variation unless those raising objections can establish that the new licence will compromise 'the prevention of crime and disorder', 'public safety',?'the prevention of public nuisance'; or ?'the protection of children from harm'.
In practice, proving there will be no negative is likely to be extremely difficult. In such circumstances even the proffered surrender of an existing licence is likely to be of no avail, unless the premises are proximate, of equivalent size and trading, see The Queen on the Application of A3D2 Limited (t/a Novus Leisure) v Westminster Magistrates' Court, Westminster City Council [2011] EWHC 1045 (Admin).
It is clear then that such policies can have very serious consequences for certain individuals. What steps should they be taking to protect themselves? First, operators should consider taking out a loss of licence insurance policy which may provide valuable cover. Next, just as every operator would be very well advised to seek the advice of a solicitor or barrister immediately if there is a hint of a licence review being brought by the police or others, that rule applies with even more force in the case of premises within a CIZ. Advice taken early might cost little and retrieve the situation; taken later it may well be unable to achieve a similar effect.

Similarly, such zones may have a significant impact upon the many freeholders who decide to let their properties for a licensed use. The first practical step for such a party with a relevant interest to protect might be for them to register their property interest with the licensing authority. Once done, key changes made to the licensing register which relates to the relevant premises at a time when the notice has effect, must be notified forthwith by the licensing authority to the person who gave the notice. The (28) matters to which that person is entitled to ?be notified are set out in full in schedule 3, but include (critically): notices of the surrender and review of premises licences. Currently the cost of such annual registration is just £21.

An additional step taken by some operators has been to seek a second premises licence for the property, there being no provision corresponding to that found in section 152(1)(b) Gambling Act 2005, which prohibits the grant of two licences for the same premises. There may, however, be an argument in a particular case as to whether such an application is consistent with the 2003 Act, which sets out the categories of persons who may apply for licences. See also Hall & Woodhouse Ltd v Poole Borough Council [2009] EWHC 1587 (Admin), [2009] LLR 78. The issue may shortly be considered by the High Court in a current judicial review.

Finally, what general advice might operators expect from their property lawyers before the grant of such a lease? With the increasing prevalence of such difficulties in recovering licences in CIZs, solicitors may at some stage be held to be on notice as to the reasonable prospect of such a problem. The next question might be 'Would the client have proceeded differently had it received more comprehensive advice?'. That, with the benefit of hindsight of the particular difficulties that did emerge, will always be the £64,000 question! To date no such actions are known to have been brought, much less been successful. It may be that a court would hold that to offer such advice would go beyond that which might be expected of a 'reasonably competent practitioner, having regard to the standards normally adopted in his profession'. Nonetheless, to minimise any such possibility and, not least, save their clients considerable anxiety, property solicitors might be well advised in future to advise landlords of the significant additional risk of letting licensed properties within any CIZ and of the precautionary steps that they can take to protect themselves.