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Wed 10th Jun 2020 - Legal Briefing

Due diligence by Michelle Hazlewood

As licensing and regulatory lawyers, we regularly deal with the defence of enforcement actions by upholders of the licensing regime. As the country slowly emerges from this extended period of lock-down, and the sector starts to reopen, operators will have to contend with potential claims from not only the enforcement agencies (police, environmental health and licensing authorities) but also the general public.

In our experience, litigation in all forms generally increases when people feel a heightened risk and in periods of economic downturn. Therefore, this coming period as lock-down eases and people attempt to return to some semblance of normality has the possibility of creating a perfect storm for the sector in relation to enforcement activity.

Most pieces of legislation and the common law that covers claims on nuisance and negligence allows for the defence of due diligence to be raised. But what exactly is due diligence? We generally describe the principal as someone trying to do their best in such a way it would be inappropriate for them to be prosecuted. Some legislation actually prescribes what would constitute “due diligence”, in other cases it is a question of risk assessment and actions taken.

For example, if you have undertaken induction training of your team on the Challenge 21 or Challenge 25 schemes and repeated that training every six months – but an individual team member still sells alcohol to an underage person, you have executed due diligence in trying to prevent that happening. But here’s the thing – as a responsible operator, you have to be able to show that. It is so much better to have evidence of proactive steps being undertaken to try to avoid or significantly mitigate against a possible risk and if a claim is brought, there needs to be some evidence of the steps or action being put in place. In the case above it would be the training records.

Operators have a great deal to contend with at the moment but now is the time to start to collate the evidence of the risk assessment and the steps taken when it comes to staff training, in particular in relation to implementing physical distancing in venues. There are many useful documents being produced by trade associations, in particular the protocols produced by UKHospitality and BACTA, which are essential reading.

We would suggest these documents should be used as a starting point for each operator and their individual sites. Of course, every business and every site is different and there needs to be evidence of consideration as to how each of these sites will trade – and their own particular risks. Having undertaken many defence actions, a judge is quick to spot a template document and question its value. They can also be quick to spot a genuine document and in many cases the extent and quality in relation to the production of any paperwork is not critical. What is key is providing evidence of direct application in relation to the day-to-day operation of the business. For example, diary records of team briefings signed by the team and with notes of actions or developments that came out of the briefing will carry additional weight. The key point being: did that team member clearly know what they were supposed to do?

This is far more important than a glossy 50-page document on the shelf or saved on a laptop that no team member had access to or the chance to read. Furthermore, as the sector starts to fully reopen and the guidance changes, no doubt operational tweaks will be required and these also need to be documented.

It may be an operator prepares small guideline documents dealing with occupancy and monitoring the movement of furniture; we are aware of an increase in review actions against premises where members of the public have purchased food and drink to takeaway but have in fact consumed very close by and (in the view of the local police) formed a sufficient gathering to be contrary to the covid regulations. Six chairs pulled together for a family household may be acceptable when they are using them, but when the next customer arrives and it is three groups of two people the required spacing will have to be reinstated. If on occasion this doesn’t take place, evidence of staff training on this vigilance may be invaluable. 

I do not wish to cast gloom over what should be an optimistic time for the sector, but at some point, somewhere, something will go wrong and may lead to some kind of enforcement action. It may well be no fault of the operator, so investing time now working out how you can demonstrate due diligence in dealing with the unique challenges this crisis presents will be time well spent.
Michelle Hazlewood is a partner at John Gaunt & Partners
John Gaunt & Partners is a Propel BeatTheVirus campaign member

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