The High Court has recently ruled that there is a power under the Licensing Act 2003 to order non-party costs.

The cases involved a decision by Cornwall Council to revoke a premises licence held by a limited company whose sole share holder was not a resident of the UK. The DPS owned the property but not the premises licence. It was the DPS who was present at the initial hearing and the subsequent appeal.

The Magistrates’’ Court made a cost order against the DPS not the premises licence holder. This was the principal grounds for an appeal to the High Court.

Mr Justice Swift hearing the case in the High Court ruled that the power at section 181(2) of the 2003 Act includes the power to make a costs order against a non-party.

However, he was clear in his ruling that an application for costs against a non-party was a course of action that was out of the ordinary and could, as was the case here, lead to significant financial consequences. “It is important that such an application is heard and determined in accordance with a fair procedure.”

Swift J stated that the principles of natural justice must be observed in cases where non-party cost order are issued saying: “The person against whom the application is made must have fair notice of the application and the grounds on which it is made, and a fair opportunity to respond to the application. I do not consider those principles were observed in this case.”

He concluded by saying that when the applications are reconsidered they should be determined in accordance with the principles formulated by the courts in the context of non-party costs applications under section 51 of the Senior Courts Act 1981.

Legal comments

Licensing sub-committees do not have the power to issue cost orders in as part of licensing reviews. A Magistrates’ Court however can on appeal as was confirmed in this case. Whilst non-party costs orders within the context of licensing hearings are unusual, the High Court has confirmed the correct approach to be taken with fairness as a central pillar in any such case.

For example in this case, it was the DPS rather than the premises licence holder that was subject to the cost order. Although the case was remitted back to the Magistrates’ Court in this case, it was done so with confirmation that cost orders can be made in relation to persons or organisations that were not explicitly party to the proceedings.

If you are facing legal or licensing issues with your premises licence, contact us today for expert legal advice and representation.

Stephen McCaffrey

Regulatory defence barrister specialising in alcohol and entertainment licensing law, appeals and defence.

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