By Stephen McGowan, partner – head of licensing (Scotland) at TLT Solicitors
Q: After the announcement on March 16 to avoid pubs and clubs do we legally need to close?
A: At this stage, there is no legal mandate to force the closure of licensed premises. The Prime Minister has advised people to avoid pubs and clubs which may have the same practical effect in that you may be open when there are no customers.
Q: What does this mean for my insurance policy?
A: We are aware of a large number of different policies so there is no ‘one-fits-all’ answer on this. It is likely that your policy does not cover you for a voluntary closure but you must review the terms of your own policy and contact your insurance provider immediately. The position is changing rapidly so further advice on this may follow.
Q: We have taken the decision to close our premises now. What happens to the licence?
A: In our view, nothing. Whilst the Act does contain provisions about licences ceasing to have effect where alcohol sales cease, that wording was clearly not drafted with such unprecedented measures in mind and, in our view, the purpose of those provisions is to strike at a permanent closure where the use of the premises changes. If you close voluntarily under the current circumstances, we say your licence is safe. In addition, should the government move to a mandatory close down of all premises, your licence would remain in place for when the close down period ends.
Q: My business is cash driven and closure means likely insolvency. Will I lose my licence?
A: Insolvency does not affect personal licences. Your personal licence is safe if you are personally insolvent, eg. if you are sequestrated. The premises licence is another matter. If the premises licence is held by a person or entity which experiences an insolvency event then the 2005 Act requires the appointed insolvency practitioner to apply to transfer the licence within 28 days or the licence lapses. We are advising insolvency practitioners on these issues separately to make sure as many people as possible know what steps are needed to save a licence.
Q: We have chosen to stay open but this morning my DPM/DPS has called in sick and has to self-isolate. Do I need to do a minor variation to name a new manager?
A: In our view, no. The situation is no different to a DPM taking a holiday. If a person were off sick long term, then a decision might have to be made to replace them. At this stage our view is that you can leave the DPM on the licence.