Limited life licences: the verdict

As every licensing practitioner knows, a licensing sub-committee hearing a premises licence application has a range of powers. It can modify the proposed conditions, or exclude particular activities or even bar the DPS. But can it, or should it, grant a shorter licence than that applied for on a probationary basis? That was the question before District Judge Alison Rose in AEG Presents Limited v London Borough of Tower Hamlets.

AEG are one of the largest events promoters in the world and the operators of the O2 and Wembley Arena. They sought a licence to run the All Points East festival in Victoria Park for five years, to correspond with the period of their contract with the London Borough of Tower Hamlets. An objection was lodged by a group of councillors and the licensing sub-committee decided to grant the licence for two years on a probationary basis, subject to conditions which it described as "robust."

It was not impressed with the submission that the review mechanism provided the correct remedy if there proved to be harmful to the licensing objectives, considering that the review process was not so easy or straightforward. It added that the two year period would allow AEG the opportunity to demonstrate their event management plans and they would then be able to apply for the remaining term of the contract.

AEG appealed to the Magistrates' Court. By the time of the appeal, the first festival had passed off successfully. But the Council stuck to its guns.

On the appeal, two arguments were advanced. The first was that as a matter of statutory policy, granting licences for a shorter period than that applied for was not intended to be part of the armoury of sub-committees. The second was that in any case curtailing the licence was wrong at the time and was even more wrong in the light of the experience of the first festival.

As to the first of these, in summary, AEG argued that:

• It was a key aim of the Licensing Act 2003, to reduce bureaucracy.
• The White Paper Time for Reform: Proposals for the Modernisation of our Licensing Laws (Cm 4696) stated a licence should be issued for the life of the business or until such time as it is revoked or suspended.
• The power of review was a key protection for communities, as set out in the White Paper and in section 182 guidance.
• The principle of light touch regulation on grant, so reducing the burden of unnecessary regulation, with the correlative power of the licensing authority to take remedial action on review, was reaffirmed in the Explanatory Notes to the Act.
• Where a discretion is conferred by the receipt of relevant representations, the authority has to decide what steps, if any, are appropriate for the promotion of the licensing objectives. This is a decision made on balance. No authority can ever be certain about the future, or sure that events will prove that the balance has been struck correctly. For that very reason, Parliament put in place the safeguard of a review, so that any party can ask the licensing authority to re-strike the balance in the light of experience.
• Neither the Act nor the Guidance contemplates a probationary licence. Neither envisages that the authority, having struck the licensing balance, will then grant a probationary licence. That is to impose the very bureaucracy which the Act was designed to abolish. Rather, if the licence is operated without harm to the licensing objectives, the licence is not then subjected to the needless bureaucracy of a renewal application. If, however, there is harm to the licensing objectives, then anybody can make an application for review, enabling the licensing authority to intervene if and to the extent required.

District Judge Rose stated:

"I am persuaded by the arguments advanced by the appellants that it was wrong in principle for the committee to grant a licence for a lesser period than that requested. Section 18(4) sets out the options available to the licensing committee. The committee had determined that it was appropriate to grant a licence with the conditions attached and in making that decision must have been satisfied that those were the conditions that were necessary for the promotion of the licensing objectives. That licence ought to have been granted for the five years that was sought. It would then have been subject to the statutory review procedure in the Act if a review were sought by an interested party or a responsible authority. What the committee sought to do was to grant a 'probationary' licence for which there is no specific provision in the Act and which is contrary to the scheme of the Act. There is no power to extend a licence as asserted by [the Council]."

The District Judge did not accept an argument that little reliance could be placed on the success of the first festival since that was itself down to the fact that AEG knew the licence was probationary. She said:

"If [the] reasoning about human nature were to be followed, no new licence for any premises would ever be granted for more than a year or two whilst applicants proved themselves. That is not consistent with the scheme under the Licensing Act."

As to the licensing merits, District Judge Rose commented adversely on the Council's failure to call any officer to justify the decision, even though the festival records showed that officers were satisfied with the management of the event. She accepted the argument that if the licence was good for two years it was good for five. She concluded:

"Despite describing the conditions in the licence as 'robust' the committee appears to have attached insufficient weight to those controls in the licence conditions that would ensure that the licensing objectives were complied with throughout the term of the licence without oversight by the licensing committee. The committee appears to have attached insufficient weight to the quality and huge experience of the applicant company. For [the Council] to now describe them as 'untried and untested' is frankly ridiculous as is the suggestion that it would be 'reckless' to grant a company with such extensive experience a licence for five years.

It is understandable that local councillors were nervous at the prospect of a new operator taking over the organisation of events in Victoria Park given that there have been difficulties with previous operators but this appellant should have been judged on the merits of its own very detailed application. If the conditions on the licence are such that the sub-committee concluded that the company could be granted a premises licence for two years, that licence should have been granted for the full period sought, until December 2022. The way in which the operation of the licence will be monitored by the licensing sub-committee is under the statutory review process set out in the Act if there is any request for such a review."

While not binding future courts, this is a lengthy and well-reasoned decision on an important point of principle. It is of particular relevance to event promoters who need the security of a longer licence to make future arrangements for events, including the ability to book top performers and securing favourable rates from contractors.

Philip Kolvin QC acted for AEG, instructed by Simon Taylor, solicitor, now of Bermans Solicitors.