Home Office and police pay out after admitting guidance on closure notices was unlawful

The Home Office and West Yorkshire Police have agreed to pay “substantial undisclosed damages” to a bar owner after acknowledging at the High Court that guidance on closure notices was unlawful.

The guidance, Practical Guide for Preventing and Dealing with Alcohol Related Problems: What You Need to Know (Third Edition), was issued by the Home Office in November 2010.

It was used by the Home Office and the Police to justify the immediate closure of premises trading in alleged breach of conditions of their licence.

An appendix to the guidance stated:

• “Q. What is the effect of a closure notice? A. As soon as the closure notice has been issued all licensable activity must cease immediately (i.e. no sales of alcohol, no regulated entertainment).
• Q. What can I do if the premise continues to sell alcohol after I have issued it with a S19 closure notice? A. Anyone who sells alcohol after a closure notice has been issued and is in effect can be arrested or summonsed for the criminal offence under s.136 of unlicensed activity.”

West Yorkshire Police relied on the guidance when in February 2011 it launched five enforcement actions against The Bank, Wakefield. The Police were either accompanied by Home Office officials in the actions or handled them after receiving Home Office training.

The Police served s. 19 closure notices and then forced the claimant – after threats to arrest the designated premises supervisor – to close the bar. The bar was closed on each occasion, leading to the claimant losing profits on the night of the closure and on subsequent trading nights.

The claimant – advised by Michael Kheng of Kurnia Licensing Consultants and counsel Philip Kolvin QC of Cornerstone Barristers and Sarah Clover of No. 5 Chambers – brought judicial review proceedings, arguing that the guidance was wrong in law.

This was on the basis that closure notices served under s. 19 of the Criminal Justice and Police Act 2001 are not closure orders. Instead, such notices warn the licensee that if the breach is not rectified within seven days the policy may apply to the Magistrates’ Court for a closure order pursuant to s. 20 of the 2001 Act.

The claimant’s lawyers also argued that while a breach of a licence condition is potentially a criminal offence under s. 136 of the Licensing Act 2003, this does not automatically give rise to a power of arrest.

It was pointed out that under s. 24(5) of the Police and Criminal Evidence Act 1984, strict conditions have to be satisfied before a person can be arrested without a warrant. The claimant’s lawyers argued that it would only be in very rare circumstances that such conditions are satisfied in the case of breach of licence conditions by licensed premises, and none of them were satisfied in The Bank’s case.

It was also submitted that threats to arrest the designated premises supervisor amounted to an unlawful interference with the claimant’s human right to trade and rely on its licence.

The bar owner, who claimed lost profits on the nights of closure and damage to the goodwill of business, sought damages pursuant to s. 8 of the Human Rights Act 1998 and/or s. 31(4) of the Senior Courts Act 1981.

West Yorkshire Police conceded that the Home Office guidance was unlawful, that its actions had been illegal and that it was liable to pay damages. The Home Office also withdrew the online version of the guidance and wrote to chief constables highlighting the legal errors.

But the claimant chose to continue with the claim to ensure a public acknowledgment of the effect of the Criminal Justice and Police Act 2001.

Mr Justice Edwards-Stuart has now ruled in the High Court that the claimant was entitled to have recorded in a court order that the guidance was unlawful.

The consent order requires West Yorkshire Police and the Home Office to pay The Bank damages for loss of profit. They will also pay the claimants’ costs.

It also says they accepted that: “The service of a Closure Notice pursuant to section 19 of the Criminal Justice Police Act 2001 does not:

(a) Require the premises to close or cease selling alcohol immediately; or

(b) Entitle the Police to require it to do so; or

(c) Entitle the Police to arrest a person on the sole ground of non-compliance with the Notice.”

Michael Kheng of Kurnia Licensing Consultancy said: “This was a clear case of over-enforcement causing damage to the goodwill of a business, not to mention the intimidation felt by the licensee confronted by police officers requiring him to close there and then. My client and I felt it right to pursue this matter to a judgment, so that the legal position is clearly established, to protect future licensees from similar conduct.”

A Home Office spokesman said: “The Government encourages licensing officers to use the full range of powers available to them under the Licensing Act to tackle irresponsible premises that flout the law.

“Closure Notices are a useful tool in encouraging premises to comply with their licence conditions and provide powerful evidence for use in reviews of problem premises. The issuing of a Closure Notice does not require premises to close and licensees should not be threatened with arrest for refusing to take immediate action.”