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Wed 12th Aug 2020 - Legal Briefing

Putting in the effort by Michelle Hazlewood

Having advised operators across the hospitality sector throughout the covid-19 crisis, it’s clear they’re doing their best to follow official guidance, whether that’s social distancing, live music performances or alfresco dining.

It’s often easier for larger operators to implement measures than it is for independents but, large or small, our sense is everyone is trying their hardest. 

The sector clearly remains on a learning curve – operators are coming to us every day for clarification of rules and guidelines – and we must work through this most difficult time if we’re to keep hospitality thriving into the future.

During the past few weeks the three issues that have been raised most often concern the impact of insolvencies, live performances and outdoor seating areas on premises licences.

With so many other things to think about right now, operators could be forgiven for forgetting basic requirements. Add insolvency to the mix and they can go out the window entirely.

Under Section 27 of the Licensing Act 2003, a number of things cause a premises licence to lapse, with all licensable activity having to cease immediately. One of those is the licence holder, whether an individual or business, becoming insolvent. This is not only the event of bankruptcy or liquidation but also voluntary arrangements and administrations.

The pandemic has already led to significant numbers of personal and corporate insolvency in our sector but, in the fallout, operators must not lose sight of the need to take immediate action to protect the premises licence, which enables the buyer of an insolvent business to benefit from that existing licence.

Operators should take one of two actions within 28 days of becoming insolvent – submit interim authority or transfer the premises licence – a process that costs relatively little. Both actions immediately bring the lapsed licence back into existence. No action within 28 days would mean a new licence being required – a potentially costly, lengthy and complicated process during which the premises wouldn’t be able to trade, virus or no virus.

Of course you could apply for temporary event notices (TEN) but the annual allowance won’t cover the whole 28 days, which is the minimum period to obtain the new licence assuming there are no complicating factors.

And, because not everyone will be aware of it, it’s worth pointing out that once granted, premises licences last indefinitely, subject to payment of an annual fee, and don’t come to an end unless for a specified reason.

Live entertainment
Guidance on live entertainment, essentially live music, is specific and, at the moment, quite clear – operators shouldn’t permit live performances or play loud background music.

However, we (and other advisers to the sector) have taken the view those guidelines apply to indoor settings and it’s acceptable to stage live performances in outdoor spaces such as pub gardens.

Indeed, we’ve answered lots of questions about the guidance from operators wishing to clarify certain points before they put on an outdoor event.

A couple of interesting aspects of such events have emerged, including where exactly performers should be situated in an outdoor setting and the matter of atmosphere.

We’ve suggested a band, for example, should perform as far away from the (socially distanced) audience as possible, ideally on a temporary stage or partitioned-off area. While we understand live music and alcohol make for a heady mix, we strongly advise that, wherever possible, operators do their best to control the atmosphere – no DJs or MCs whipping-up the crowd please.

There’s actually a third issue to consider here. Many pubs with outdoor spaces and gardens won’t have used them for live entertainment – or at least not as intensely – before the virus struck, which means those near housing should consider the impact a live music event and larger numbers of customers would have on their neighbours. Pubs planning such events would do well to make those living nearby aware of an event in advance and, where necessary, apply for a TEN in plenty of time. 

Social distancing
Inevitably there have been lots of questions concerning social distancing and it’s this issue more than any other that has shown us how hard operators have worked to adhere to guidelines.

What they can’t always control, though, are the natural instincts of the average customer, in particular the pub-goer.

Some pubs that have brought forward closing time have reported a pinch point at the bar at last orders, even at those venues with table service only or that have put order-and-collect systems in place.

As if they hadn’t got enough to worry about, operators now face having to ‘train their customers’.

One licensing authority recently wrote to operators praising them for their work in making customers feel safe while at the same time reminding them of the importance of adhering to official guidance, including having social distancing measures and a ‘robust’ track and trace procedure in place.

As I’ve already said, we’re all on a learning curve, including customers. Operators doing the best job of ‘training’ those guests in necessary behaviour are the ones that will help the sector get through this and thrive once more. Sadly, far too often this massive effort by operators goes unreported and unrecognised.
Michelle Hazlewood is a partner at John Gaunt & Partners
John Gaunt & Partners is a Propel BeatTheVirus campaign member

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