Beware The (New) Transfer Traps

I was brought up to believe that if a job was worth doing, it was worth doing properly. From the time that the bill which became the Licensing (Scotland) Act 2005 was published, licensing lawyers unanimously condemned the transfer provisions as unworkable. This flaw was shamefully overlooked in both of the subsequent acts and, astonishingly, was omitted from the Air Weapons and Licensing (Scotland) Bill. The Law Society’s Licensing Sub-Committee is not fobbed off lightly and continued to press the point. For once there is some good news; however, before we start the dancing in the streets of Raith and elsewhere, read on.

Let us begin with the positive. Section 34 is repealed, removing many anomalies surrounding insolvency and business transfer. It will still be necessary to make an application within 28 days of insolvency, death etc, but this may be made by anyone. Section 33 is largely amended under the heading Application for transfer of premises licence. The starting point will be that any person of 18 or over may apply for the transfer of a premises licence. Protections for the licence holder are provided. All applications must be accompanied by a written statement signed by the holder consenting to its transfer to the transferee or, if that is not practicable, a statement of the reasons for failure to obtain such written consent. There seems to be no provision for the consent to be signed by an agent, or for an electronic consent, which could pose problems where the licensee has left the country. What of a blanket consent obtained at the beginning of a lease? Must the precise identity of the transferee be specified?

There will be a new section, 33A, which fails adequately to deal with the absence of consent. Section 33A(4) allows the Board to dispense with consent if satisfied that the transferee has taken all reasonable steps to contact the premises licence holder but has received no response (my emphasis). This is thoroughly unsatisfactory. What if an evicted tenant who clearly has no further right to occupy the premises simply refuses his consent? Or if an insolvency practitioner demands a premium for a consent? Or if, most frustratingly of all, the licensee sends an email saying, “fine by me”, but not a signed consent? In these circumstances the transferee has indeed received a response, but some boards may feel themselves obliged to refuse the application. In the absence of consent, a board must hold a hearing. That is reasonable, but no time limits are given. One can imagine significant delays.

A further problem is that, even if a board decides to exercise a common sense approach, an existing licence holder will have a right of appeal against the decision to transfer his licence. All he will have to show is that he responded to the request to consent. While a licensing board may well be prepared to take a pragmatic approach, a Sheriff may well consider herself obliged to take a literal interpretation.

In non-controversial cases the problems of timing have not been addressed. Section 33(5) will remain in force, allowing the police 21 days to respond to an application for transfer. Where there is a conviction to be notified, the board must hold a hearing, even if there is no recommendation for refusal. That will apply even if there is a minor or irrelevant conviction (for example, a conviction under Health and Safety legislation where there is strict liability). Even if the applicant has an unblemished record, there is no provision for an instant, temporary transfer of licence. The new section 33(1A)(a) will allow the applicant to specify the date upon which the transfer is to take effect, but I do not read this as allowing a transfer to take place in advance of receipt of the police report. Commentators have highlighted the huge practical issues in the sale of packages of licensed premises. In Scotland, even in the days of a unified police force, the time taken to process applications varies widely. Where the package is a cross border one there will be stark contrast with the position in England, where an interim transfer is possible.

The Law Society’s proposed further amendments which would have dealt with these problems have been ignored. Conclusion? Some credit to the Government for agreeing at last that the job needed doing: a crying shame that it has failed to do it properly.

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