FREE CHAPTER from ‘A Practical Guide to Licensing Law for Commercial Property Lawyers’ by Niall McCann & Richard Williams



The Licensing Act 2003 (the “Act”) is the principal statute covered by this book which came into force on 24 November 2005. Replacing the Licensing Act 1964, this product of the Blair years was designed to reduce regulation and devolve power to local authorities in order that they can shape their licensed economy. Decision making was moved from the Magistrates’ Court to council committees and the rigid approach to the hours when licensable activity could take place was relaxed. No longer did bells in pubs always ring at 11.00 p.m. followed by the daily refrain of ‘last orders please’! The success, or lack thereof, of this new approach has been debated both by academics and the press alike. It is not the intention of the authors to proffer an opinion but, what is clear, is that a considerable amount of regulation still remains and this flexible approach has not resulted in the 24-hour opening culture sometimes peddled by lazy pundits. Only a small percentage of premises have licences which permit alcohol to be sold 24 hours a day and the majority of these are large, out-of-town, supermarkets.

The Licensing Objectives

Four objectives underpin the Act:

  • the prevention of crime and disorder;

  • public safety;

  • the prevention of public nuisance; and

  • the protection of children from harm.

It is these that authorities seek to promote when authorising licensable activities or taking enforcement action. Any issue, concern, opinion or other matter raised by local residents, neighbourhood groups, the police, environmental health, councillors, members of parliament, businesses, trade bodies and the like, which do not relate to one or more of these objectives, is irrelevant under the Act. The wish to create employment: irrelevant. The promise of regeneration: irrelevant. Moral outrage: again, irrelevant.

Are children under the age of 18 ever permitted to consume alcohol in licensed premises under any circumstances?

Yes, but only 16 or 17 year olds, drinking beer, wine or cider, when accompanied by an adult and with a table meal.

What activity needs to be licensed?

A range of activity cannot be carried out in England and Wales unless specific permission has been granted. These activities include:

The Sale by Retail of Alcohol

Whilst seemingly obvious, even those with licensing experience can be confused with this licensable activity. It is the ‘sale’, not the consumption of alcohol, that is the licensable activity. Unless in a club setting, if alcohol is genuinely supplied free of charge a permission is not required: ‘networking events’, private parties and retail shops which supply complementary glasses of champagne to encourage customers to part with their money can all breathe a sigh of relief. Nevertheless, the alcohol does genuinely have to be suppled free of charge. The courts are alive to ‘shams’ whereby the price of other goods is inflated to compensate for the alcohol being free of charge. The most famous recent example was the Innsatiable in Farnham which, posing as a furniture shop, gave away alcohol (supposedly free of charge) but offered customers the chance to purchase beer mats. Following a legal battle, it closed.

Wholesale sales also do not require licensing permission. Therefore, provided importers of alcoholic drinks only supply to the trade and not the final consumer, they do not fall to be regulated as, ultimately, a permission will be required further down the supply chain.

A sale is deemed to have taken place where the alcohol is appropriated to the contract (i.e. the place the drink is taken from to be given to the customer). This could be a fridge or a barrel. Given this, a retail wine delivery merchant would not have to license the call centre but would need a permission for the warehouse from which orders are despatched. In some cases, it is not clear cut as to whether a licence is required or not. For example, what if a company imports Bordeaux directly from the vineyard, stores it in a warehouse in London before onward delivery to retail customers? In such a scenario, arguably a licence will not be required if the cases/bottles are allocated to customers before leaving the vineyard but will be required if the company ‘buys in bulk’ and only allocates the wine when it is in London and an order is placed.

Regulated Entertainment

Schedule 1 to the Act lists eight types of regulated entertainment, namely:

  • A performance of a play.

  • An exhibition of a film.

  • An indoor sporting event.

  • Boxing or wrestling entertainment.

  • Performance of live music.

  • Any playing of recorded music.

  • Performance of dance.

  • Entertainment of a similar description to that falling with performance of live music, any playing of recorded music or performance of dance.

Taking some of the key activities in turn, the following should be noted:

  • A performance of a play

Largely self-explanatory, the definition includes improvised works but not rehearsals. Plays have become less of a regulatory concern as recent deregulation now permits the performance of plays between 8.00 a.m. and 11.00 p.m. with an audience of up to 500 people without requiring a permission or licence.

  • An exhibition of a film

A licence or permission is required for the showing of films, save for education purposes, those on live television, taking place in a place of worship, village hall etc. Incidental films, which could be the screening of silent films in a nightclub to add to the ‘vibe’, do not require a licence or permission.

For premises wishing to show films there are also other considerations (beyond the scope of this book) to consider matters such as copyright and age classification.

  • An Indoor Sporting Event

The definition of a sporting event is one in which spectators are present. Therefore, snooker halls which merely provide tables for people to play against each other do not need to be licensed for indoor sporting events whereas, if they host competitions which attract an audience, this could be licensable. Indoor sporting events are now subject to a similar deregulation as that of plays, albeit that the maximum audience number can be 1000, rather than 500, before a licence is required.

  • Boxing or Wrestling Entertainment

In a category all their own, any boxing or wrestling entertainment requires a licence except between 8.00 a.m. and 11.00 p.m. and for an audience of more than 1000 spectators. Bizarrely, Greco-Roman wrestling is specifically excluded and does not require a licence or permission. For fans of that sport, in the early 2000s things really couldn’t get any better.

  • Live and Recorded Music

The Licensing Act 1964 had a provision known as the ‘two in a bar’ rule which excluded the requirement to obtain a Public Entertainment Licence if two or fewer people were performing. This exemption was not adopted in the Act and, in what was a controversial move at the time, the playing of all live music, regardless of number of performers and recorded music requires a licence or permission. However, there were some concessions.

The definition of live and recorded music excludes live musical performances or the playing of recorded music which is incidental to a non-entertainment activity. What this means is a regular source of debate between operators, environmental health officers and enforcement bodies. Whilst there is no statutory test to determine whether music is incidental, there are two aspects which can be considered, namely, do a couple conversing have to raise their voices to be heard above the music and is the music the focus of the entertainment? If the answer is ‘yes’ to either it is likely that the music is licensable.

As with other forms of regulated entertainment, there has been some recent further deregulation. If a premises is licensed for the sale of alcohol it may play live and recorded music between 8.00 a.m. and 11.00 p.m. to an audience of up to 500 persons without these activities being permitted by the premises licence. This deregulation also suspended any conditions on a licence preventing such activity. A word of caution though; If the playing of music is a nuisance, operators can fall foul of other legislation and receive noise abatement notices or have premises licences reviewed (more of which later) and restrictions placed on a licence.

Late Night Refreshment

Late Night Refreshment is the supply of hot food and/or drink between the hours of 11.00 p.m. and 5.00 a.m. to members of the public. It does not have to be sold and can be for consumption either on or off the premises. This seemingly innocuous activity is licensed in order to bring late night takeaways into the licensing regime. The common belief is their presence can encourage late night revellers to stay out for longer, thus prolonging the risk of anti-social behaviour.

Whilst there are several exemptions (including for residents of hotels, staff canteens etc.), operators trying to argue that the food they supply is not sufficiently ‘hot’ to require licensing will not curry much favour – without a licence, late at night is the domain of the Frappuccino not the Cappuccino.

Decision Making

Whether or not to license or permit the above activities is determined by licensing authorities which, in the main, are district or borough councils, comprising ten to fifteen local councillors. They determine (whether directly or via delegated powers) applications by people or bodies wishing to carry out one or more of the above licensable activities by reference to the provisions of the Act and related statutory instruments, the council or borough’s own licensing policy (which can usually be found online) and national guidance (again online – search for ‘Section 182 Guidance’). More on how decision making works will be dealt with later in the book.

The Different Types of Permission

The Act introduced four types of permission:

Premises Licence

A premises licence attaches to a building or area, is generally capable of transfer from entity to entity, and permits one or more licensable activity, albeit usually with restrictions on hours and various conditions.

Personal Licence

Held by individuals, save for in community premises, only personal licence holders can make or authorise the sale of alcohol. Only personal licence holders can be designated premises supervisors – an individual named on a premises licence as the person authorised to sell or supply alcohol. Without a designated premises supervisor the supply of alcohol is not permitted pursuant to that premises licence. Common sense prevails and personal licence holders can, and do, delegate responsibility to sell alcohol to members of a licensed operation.

Club Premises Certificate

The permission required to supply or sell alcohol to members of a qualifying club and their guests. To be a qualifying club, amongst other things, a premises needs to have rules which determine membership, a two day interval between nomination/application and admittance and at least 25 members.

Temporary Event Notice

Effectively ‘pop up’ premises licences, temporary event notices (“TENs”) can permit licensable activities to take place for up to a week at a time with up to 499 people attending at any one time. In total, a building or space may be covered by such notices for up to 21 days a year with at least 24 hours elapsing between TENs and a maximum of 15 TENs a year per building or space. Only the police or environmental health can object to a TEN. If they do, the notice is considered before a licensing sub-committee in much the same way as a new premises licence or variation application may (more of which later).

With the basic concepts of the Act outlined we move onto a more detailed analysis of the most important permission of them all: the premises licence.