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Licensing and Registration of Clubs (Amendment) Bill

EXPLANATORY AND FINANCIAL MEMORANDUM

INTRODUCTION

1. This Explanatory and Financial Memorandum has been prepared by the Department for Social Development in order to assist the reader of the Bill and to help inform debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.

2. The Memorandum needs to be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause or schedule does not seem to require an explanation or comment, none is given.

BACKGROUND AND POLICY OBJECTIVES

3. Northern Ireland law on liquor licensing and registered clubs has remained largely unchanged since 1997 despite major changes in expectations, in our environment and in social and economic circumstances during that time. The law needed to be examined to see if and how it should be reformed and updated to reflect developments in that period, good and bad. Unwelcome developments included the rising level of alcohol abuse in our society and related ill-health, disorder, crime, domestic violence and other problems. Policy reviews that were completed considered the key elements of Northern Ireland’s liquor licensing and clubs’ law with particular reference to implications for health and public order. They led to proposals aimed at striking a balance between facilitating the sale of alcohol, public safety and the public interest.

CONSULTATION

4. In November 2005 the Direct Rule Minister for Social Development sought views on a wide range of policy proposals which included the availability of later opening to 2.00am for most licensed premises and all registered clubs, closure powers, penalty points, more flexible accounting for clubs and a voluntary proof-of-age scheme. In December 2006 he consulted on a draft Order which would have introduced later opening to 2.00am, closure powers, penalty points and amended clubs’ accounting requirements. Both the policy and legislative consultations showed overwhelming support for closure powers and penalty points and widespread support from PSNI, health interests, licensees and others for a mandatory proof-of-age scheme. There was considerable opposition to later opening and opinion was evenly split on the clubs’ accounting proposals. In the event, the Order was not enacted due to the restoration of the Assembly.

5. In 2007 the Executive Minister initiated her own review, drawing and building on the work completed by her predecessor. She held a series of meetings with key stakeholders before finalising her own proposals, incorporated in the Bill. These reflect the results of the earlier policy and legislative consultations. Since the time of the 2007 policy review major developments on the local political and economic front were experienced. Growing public concern was also raised about the place of alcohol in modern society and about alcohol-related health and social harms. These developments led to a review of the initial proposals in 2010 to establish if they required updating.

OPTIONS CONSIDERED

6. Three options were considered:

Option 1 - Do nothing. This would leave government open to criticism that not enough is being done to combat the growing problems of breaches of licensing legislation, alcohol-related harm and public disorder. It would not help deter underage would-be drinkers from seeking to break the law or help licensees and registered clubs avoid inadvertently doing so. It would continue to place an unnecessary accounting burden on registered clubs, many of which are already coming under pressure from changing social and economic circumstances.

Option 2 - Develop central practice guidance for the judiciary and the police to promote a co-ordinated approach, consistency of sanctions and greater use of existing suspension powers. Standardising sanctions and removing courts’ discretion in all cases would be draconian, limit sensitivity to individual circumstances, could affect the local economy and employment and would run counter to judicial custom and practice with possible wider legal implications. Similarly, requiring all customers to produce a prescribed proof-of-age card for the purpose of accessing alcohol would be restrictive for customers, add unnecessarily to the existing range of identity documents required for statutory purposes and involve increased private and public expenditure.

Option 3 - Introduce additional enforcement measures and, in relation to registered clubs only, more flexible accounting procedures and a modest increase in the number of late nights available. A scheme of immediate temporary closure powers for police would protect public order and improve compliance with, and enforcement of, the licensing law. The penalty points scheme is nuanced to take account of cumulative guilt and provides discretion for courts, fair warning to would-be offenders and the real prospect of licence holders and registered clubs facing the most severe penalty – suspension of a licence or certificate of registration. Specifying a range of documents acceptable as proof-of-age for the purposes of liquor licensing and registered clubs legislation would be more user-friendly, give customers (particularly from outside Northern Ireland) greater choice, have police and licensed trade support and complement the Challenge 21 initiative promoted by the Federation of the Retail Licensed Trade and the NI Electoral Commission. Relaxing the control environment by replacing the system of control currently prescribed by regulations with best practice guidance, as requested by PSNI, would relieve clubs of unnecessary bureaucracy while maintaining high accounting standards and practices. A modest increase in the availability of later opening to 1.00am (some 2½ hours each week on average) should allow clubs to better meet their members’ expectations thereby helping them to maintain profitability and to continue providing sporting and other diversionary activities, to young people in particular. The introduction of powers in the legislation to prohibit or restrict irresponsible drinks promotions would enable the Department to take action to tackle alcohol promotions which encourage the escalating problem of harmful drinking.

7. The Bill implements Option 3.

OVERVIEW

8. The Bill contains 19 clauses and 4 Schedules which amend and in some places replace the existing provisions of the Licensing ( Northern Ireland) Order 1996 (the Licensing Order) and the Registration of Clubs ( Northern Ireland) Order 1996 (the Clubs Order).

COMMENTARY ON CLAUSES

Clause 1 of the Bill introduces a new part 4A to the Licensing Order containing Articles 69A to 69Jin relation tothe closure of licensed premises.

Article 69A (Orders to close licensed premises in district experiencing disorder)empowers a magistrates’ court within a district that is experiencing or is likely to experience disorder to make a closure order in respect of licensed premises at or near the place where the disorder is occurring or imminent. An application for a closure order must be made by a police officer of the rank of superintendent or above and the closure order must not exceed a period of 24 hours. The Article also introduces a new offence (maximum fine £1000) for knowingly keeping any licensed premises open during the period of a closure order.

Article 69B (Closure orders for identified licensed premises)allows a police officer of the rank of inspector or above to make a closure order in relation to identified licensed premises if it is believed that there is public disorder on or near and related to the premises and closure would be in the interest of public safety. Any such closure order must not exceed 24 hours.

Article 69C (Extension of closure order)allows for a police officer of the rank of inspector or above to extend a closure order prior to the court hearing if it is believed that this is necessary in the interests of public safety. The extension of the closure period must not exceed 24 hours, beginning with the end of the previous closure period.

Article 69D (Cancellation of closure order)providesthat a police officer of the rank of inspector or above may cancel a closure order or any extension of it before a court hearing takes place and must cancel an order or any extension if it is believed there is no longer a threat to public order. The premises must be notified of any such decision as soon as reasonably practicable.

Article 69E (Application to court of summary jurisdiction by police) requires a police officer of the rank of inspector or above to apply to the relevant magistrates’ court to consider the closure order and any extension of it as soon as possible.

Article 69F (Consideration of closure order by court of summary jurisdiction)requires a magistrates’ court, on receipt of an application from the police, to hold a hearing as soon as practicable. The court may revoke a closure order and extension, order premises to close or remain closed for a maximum of 28 days, revoke, modify or make the continuance of an order for additional permitted hours (later opening) subject to such terms as the court thinks fit, revoke any occasional licences already granted or order that no further occasional licences be granted to the premises. A licensee may make representations to the court at the hearing. The Article also introduces a new offence of keeping premises open in contravention of a court order, which will attract a fine not exceeding £5000 and/or up to 6 months imprisonment.

Article 69G (Appeal from decision of court of summary jurisdiction)allows for a person to appeal to a county court against a magistrates’ court decision within 21 days. Any order made by a magistrates’ court under Article 69F will cease to be effective from the time an appeal has been lodged until a decision has been made or the appeal abandoned.

Article 69H (Enforcement of closure order)empowers a constable to use all necessary force in order to close premises that have been subject to a closure order.

Article 69I (Exemption of police from liability for damages)provides that a police constable or a Chief Constable is not liable for relevant damages such as damages awarded in proceedings for judicial review, negligence or inappropriate performance in public office. This is the case unless the action or lack of action by the police is shown to have been in bad faith or was incompatible with section 6(1) of the Human Rights Act 1998.

Article 69J (Interpretation of Part 4A)describes the circumstances in which premises are deemed to be open by listing who may legitimately enter the premises under this part (4A) of the Licensing Order. This will assist the police in determining whether premises which should be closed, are in fact trading illegally. The Article also defines certain other words and phrases used within the Bill and repeals Article 49 of the Licensing Order which made provision for the closure of premises or the curtailment of opening hours for the preservation of public order.

Clause 2 of the Bill introduces new Articles 71A to 71C and Schedule 10A to the Licensing Order in relation to a penalty points system and repeals those existing provisions on suspension of licences which are no longer necessary as a result of the new provisions.

Article 71A (Penalty points to be attributed to an offence) provides for penalty points to be attributed to certain offences. The points attributable to the offences specified in column 1 of Schedule 1 to the Bill are set out in column 3 of that schedule. Where a licensee is convicted of two or more offences committed on the same occasion, a court may, if it wishes, restrict the points attributable to the highest number due in respect of one of the offences. The Article also empowers the Department to amend the penalty points attributable by affirmative resolution procedure whereby the amendment cannot take effect unless the order is affirmed by the Assembly.

Article 71B (Endorsement of licences) makes provision for the endorsement of penalty points on a licence where the holder is convicted of an offence. Where a licensee is convicted of an offence liable to a fine not exceeding £1000 as specified in Part 1 of Schedule 10A, a court may order penalty points to be endorsed on the licence. Upon conviction for the same offence within 3 years a court must order the points to be endorsed on the licence. Where a licensee is convicted of an offence liable to a fine not exceeding £2500 as specified in Part 2 of Schedule 10A, a court must order penalty points to be endorsed on the licence unless for special reasons it thinks fit not to. Upon conviction for a further offence under Part 2 within 3 years a court must order the points to be endorsed on the licence. Where a licensee is convicted of an offence liable to a fine not exceeding £5000 as specified in Part 3 of Schedule 10A, a court must order penalty points to be endorsed on the licence. In addition, it will be an offence liable to a fine not exceeding £2500 and/or up to 3 months imprisonment if a licensee fails to hand the licence into the court for endorsement.

Article 71C (Suspension of licence for repeated offences) empowers a magistrates’ court to suspend a licence for not less than 1 week or more than 3 months where the licensee has accumulated 10 or more penalty points within a 3 year period. A suspended licence remains valid for the purposes of surrender, renewal, transfer and a protection order. The Article introduces Schedule 10A to the Licensing Order to show which offences attract the various levels of penalty points and also repeals some existing suspension provisions in Article 73 of the Licensing Order which are superseded by the Bill.

Clause 3 of the Bill introduces a statutory proof-of-age scheme by amending Articles 58 and 60 of the Licensing Order which deal with the prohibition of young people under 18 from certain premises and the sale or delivery of alcohol to them.

New paragraphs (11A) and (11B) are added to Article 58 and new paragraphs (7A) and (7B) are added to Article 60 of the Licensing Order. These provide that, in court proceedings for certain underage offences, “all due diligence” may be demonstrated by a licensee or member of staff being shown any of the documents specified for the purpose of proof of age by a customer. The documents are a passport, photocard driving licence, electoral identity card and a Proof of Age Standards Scheme (PASS) card. The Department is also given the power to prescribe by regulations such other proof of age documents as may be considered necessary.

A new Article 60A (duty to display notice relating to age) introduces a requirement for all licensed premises to display a notice containing information on underage sales and listing the documents acceptable as proof of age. The Department is also given the power to prescribe by regulations the format and content of the notice which will state that it is an offence to sell alcohol to a person under 18, for any person under 18 to purchase alcohol, for a person to purchase alcohol for a person under 18 and will describe documents acceptable as proof of age. It will be an offence (fine up to £1000) for a licensee to fail to display a notice as required on the premises.

Clause 4 of the Bill introduces new Article 57A in the Licensing Order in relation to the prohibiting or restricting of irresponsible drinks promotions. Article 57A provides a power for the Department to make regulations to prohibit or restrict irresponsible drinks promotion being held on or in connection with a licensed premises. It defines what is meant by a “drinks promotion” and also specifies activities regarded as irresponsible drinks promotions.

The restrictions on irresponsible drinks promotions will apply as appropriate to both on and off-trade premises regulated under the Licensing Order. When making regulations the Department will be able to add to the list of categories of irresponsible promotions, modify them, or extend or restrict their application. The regulations must be approved in draft by a resolution of the Assembly before being made. It will be an offence liable to a fine not exceeding £5000 as specified in Part 3 of Schedule 10A for any premises to hold an irresponsible drinks promotion which contravenes the provisions of the regulations.

Clause 5 introduces new Article 57B in the Licensing Order in relation to the pricing of intoxicating liquor. Article 57B provides a power for the Department to make regulations to prohibit or restrict the varying of the price at which intoxicating liquor is sold for limited periods. It also provides for the Department to restrict, by regulation, price discounts where two or more intoxicating liquor products are included in a package.

Regulations on the pricing of intoxicating liquor will apply to both on and off-trade premises regulated under the Licensing Order. When making regulations the Department will be able to add to the list of specified pricing promotions, modify them, or extend or restrict their application. The regulations must be approved in draft by a resolution of the Assembly before being made. It will be an offence liable to a fine not exceeding £5000 as specified in Part 3 of Schedule 10A for any premises to hold a pricing promotion which contravenes the provisions of the regulations. 

Clause 6 inserts a new Article 2B in the Licensing Order clarifying how the Order applies to limited liability partnerships. The Article provides that a reference to a director of a body corporate is a reference to a member of a limited liability partnership and a reference to the secretary of a body corporate is a reference to any designated member of a limited liability partnership.

Clause 7 of the Bill introduces a new part 4A to the Clubs Order containing Articles 41A to 41J relating to the closure of registered clubs.These provisions are virtually identical to the closure provisions for licensed premises in clause 1. The only exception relates to Article 41F (Consideration of closure order by court of summary jurisdiction) where a magistrates’ court may only revoke a closure order and any extension to that order or order a registered club to close or remain closed for a maximum of 28 days.

Clause 8 of the Bill amends Articles 43 and 44 and replaces Article 45 and Schedule 6 of the Clubs Order which currently provide for a system of penalty pointsfor clubs convicted of accounting offences. The system will now encompass many more offences and is similar to the provisions in clause 2 of the Bill for licensed premises.

Subsection (1) amends Article 43 to create similar provisions to those set out in clause 2 (Article 71A) of the Bill with regard to the penalty points attributable to certain offences. The points attributable are set out in column 3 of Schedule 2 to the Bill.

Subsection (2) amends Article 44 to create similar provisions to those set out in clause 2 (Article 71B) of the Bill which makes provision for the endorsement of penalty points on conviction of an offence. However, unlike clause 2, a court must order points to be endorsed on a certificate of registration where a conviction for the same offence under Parts 1 or 2 of Schedule 6 occurs within 2 years.

Subsection (3)replaces the existing Article 45 with a new Article 45 to create similar provisions to those set out in clause 2 (Article 71C) of the Bill in relation to the suspension of a registration where a registered club has accumulated 10 or more penalty points within a 2 year period.

Clause 9 of the Bill amends Articles 32 and 34 of the Clubs Order to introduce a statutory proof-of-age scheme. These mirror the provisions set out in clause 3 of the Bill in relation to licensed premises.

Clause 10 of the Bill introduces new Article 31A in the Clubs Order in relation to the prohibiting or restricting of irresponsible drinks promotions. Article 31A provides a power for the Department to make regulations to prohibit or restrict a registered club from carrying on an irresponsible drinks promotion on or in connection with the premises of the club. It defines what is meant by a “drinks promotion” and also specifies activities regarded as irresponsible drinks promotions.

When making regulations the Department will be able to add to the list of categories of irresponsible promotions, modify them, or extend or restrict their application. The regulations must be approved in draft by a resolution of the Assembly before being made. It will be an offence liable to a fine not exceeding £5000 as specified in Part 3 of Schedule 6 for any premises to hold an irresponsible drinks promotion which contravenes the provisions of the regulations.

Clause 11 introduces new Article 31B in the Clubs Order in relation to the pricing of intoxicating liquor. Article 31B provides a power for the Department to make regulations to prohibit or restrict the varying of the price at which intoxicating liquor is sold for limited periods. When making regulations the Department will be able to add to the list of specified pricing promotions, modify them, or extend or restrict their application. The regulations must be approved in draft by a resolution of the Assembly before being made. It will be an offence liable to a fine not exceeding £5000 as specified in Part 3 of Schedule 6 for any premises to hold a pricing promotion which contravenes the provisions of the regulations.

Clause 12 amends Article 40 of the Clubs Order to pave the way for regulations and guidance which will make the accounting requirements for registered clubs more flexible.

Subsection (2) amends sub-paragraph (b) of Article 40(1) to remove the requirement to prescribe by regulations the manner in which clubs maintain a system of control of accounts. It also removes the requirement to send a copy of accounts and auditor’s report to the police (in future, the police must ask for the papers) and to notify the police of the address at which accounts-related papers are held. In addition it gives small and medium clubs the option to have their accounts audited by an auditor or examined by an independent examiner.

Subsection (3) introduces a new paragraph (1A) to Article 40 to provide for directions to be given by the Department regarding the system of control for accounts and the selection of an independent examiner. Subsection (4) introduces a new paragraph (2A) to Article 40 which makes contravention of paragraph (1A) an offence which attracts a fine up to £1000.

Clause 13 amends Article 26 of the Clubs Order to increase the number of occasions on which a registered club may apply to the police for later opening to 1.00am (midnight on Sunday) from 52 to 85 in any year. A club must give police at least 7 days notice of the event and may, at the discretion of the police, include a number of occasions on the one application.

Clause 14 amends paragraphs (13) and (14) of Article 32 of the Clubs Order to allow certain persons under 18 to remain in any part of a sporting club premises which contains a bar or is used exclusively or mainly for the supply, consumption or storage of alcohol to 10.00pm in the evening.

Clause 15 (Ancillary provision) provides a power for the Department to make any orders necessary to give full effect to the Act. Clause 16 (Interpretation) provides for the Interpretation Act ( Northern Ireland) 1954 to apply to the Bill. Clause 17 (M inor and consequential amendments and repeals) introduces Schedules 3 and 4 which set out the provisions to be amended or repealed. Clause 18 (Commencement) empowers the Department to make a commencement order naming the day or days on which the Act will come into operation and Clause 19 (Short title) gives a title to the Act.

There are 4 Schedules to the Bill containing tables of penalty point offences and miscellaneous amendments to the Licensing and Clubs Orders including Articles to be repealed.

FINANCIAL EFFECTS OF THE BILL

9. The proposals will not impose compliance costs on licensed premises or registered clubs. The penalty points and closure provisions are enforcement measures which will ensure that breaches of the law by licensed premises and clubs are more effectively dealt with by the police and the courts. The proof-of-age scheme will offer greater protection to premises in relation to underage sales and the accounting provisions will offer a cost saving opportunity for small and medium sized registered clubs. There may be some costs involved in training door supervisors and counter staff and displaying statutory notices in relation to the proof-of-age requirements and for clubs making initial adjustments to their accounting systems but these are unlikely to be significant. The availability of later opening should help clubs to maintain profitability and to continue providing sporting and other diversionary activities, to young people in particular. No significant financial implications were found in respect of the provisions on the promotion and pricing of alcohol. No financial implications were identified for the public sector.

HUMAN RIGHTS ISSUES

10. The proposals have been screened for compatibility with the European Convention on Human Rights. No human rights implications were identified.

EQUALITY IMPACT ASSESSMENT

11. In accordance with its duty under section 75 of the Northern Ireland Act 1998, the Department conducted a screening exercise on the proposals, concluding that they did not have significant implications for equality of opportunity and that an equality impact assessment was therefore not necessary.

SUMMARY OF THE REGULATORY IMPACT ASSESSMENT

12. The Department included its consideration of the potential regulatory impacts as part of the public consultation. It concluded that no Regulatory Impact Assessment was required.

LEGISLATIVE COMPETENCE

The Minister for Social Development had made the following statement under section 9 of the Northern Ireland Act 1998:

“In my view the Licensing and Registration of Clubs (Amendment) Bill would be within the legislative competence of the Northern Ireland Assembly.”