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Masthead Local Govt - Licensing

Capping the number of hackney carriages

Taxi 146x219A Yorkshire council has fought off a Crown Court challenge to the limit it placed on the number of hackney carriage licences. Gary Grant explains how.

In a relatively rare Crown Court appeal, Calderdale Metropolitan Borough Council has successfully defended their policy of capping the number of hackney carriage licences permitted to operate in Halifax at 37. A challenge to the council’s policy was brought by Mr Geoffrey Fielden, a former Deputy Mayor of the Council, who wished to operate a fleet of 8-seat “taxi-buses” into and around Halifax town centre. The buses would follow an established route of stops but could deviate from it and accept passengers who hailed the taxi-bus.

Significant unmet demand

Mr Fielden’s original application was considered by the council’s Licensing & Regulatory Committee in January 2017. However, on that occasion they adjourned the application in order to commission an up to date report to establish whether there was any “significant unmet demand” (or “SUD”) for hackney carriage licences in Halifax. (The last survey dated back to 2010 and had not been updated within the recommended three years because the council, in line with others, were awaiting the Law Commission’s report on taxi licensing before reviewing their policy).

Nationally, caps on the number of hackney carriage licences are now the exception rather than the rule. The Department of Transport’s “Taxi and private hire vehicle licensing: Best Practice Guidance”, re-issued in March 2010, provides a heavy steer to licensing authorities to eschew such caps, viewing them as anti-competitive and unlikely to benefit the public. However, they remain lawful so long as they can be justified.

The law provides that a council may refuse the grant of a hackney carriage licence for the purpose of limiting the numbers of licensed taxis if, but only if, the council is satisfied that there is no “significant unmet demand” : see s.37 Town Police Clauses Act 1847 read together with s.16 Transport Act 1985.

To this end, the council commissioned a new independent survey. Mr Ian Millership of LVSA carried out a comprehensive study of the current position in Halifax, which included some 156 hours of taxi rank observations and over 200 interviews with members of the public, trade representatives, and stakeholders (including supermarkets, hotels, pubs and nightclubs). He concluded that although there was some negligible evidence of unmet demand it was very far from being “significant” by the generally accepted industry index. He advised that the existing cap of 37 hackney carriage licences was “defensible”.

Council’s decisions

In possession of this new report the licensing committee re-convened in August 2017 and adopted its recommendations. The cap on hackney carriage licences would remain at 37 and all of those 37 licences were already in use. The council moved on to consider Mr Fielden’s specific application for five more hackney carriage licences to enable his taxi-bus scheme to operate. The committee was advised that they were entitled to depart from their policy and grant the additional licences to Mr Fielden if they provided reasons for doing so.

Following a somewhat heated committee hearing, which included regrettable accusations of bad faith directed at council officers and members, Mr Fielden’s application was refused.

Crown Court appeal

He appealed directly to the Crown Court at Bradford arguing that the SUD report was flawed and biased, the council’s policy of capping licences was unsound and supported an anti-competitive taxi cartel in Halifax and, in any event, his specific application for licences to operate taxi-buses should have been granted as an exception to the policy cap.

Mr Recorder Jamie Hill QC, sitting with two justices considered the appeal on 5 April 2018.

Council submissions and “public benefit”

The council submitted that the SUD report was sound and the policy cap justified. Indeed, given the particular circumstances in Halifax town centre, the cap served to benefit the public because:

  1. The cap, and inevitable premium on the licences, incentivised operators to utilise the 37 hackney carriages 24 hours a day, 7 days a week to justify their value. This meant passengers could expect a full service at all times of the day.
  2. The value of the plates encouraged operators to invest significantly in their vehicles and this meant that all could comply with the Council’s requirement that they are wheelchair accessible and maintained to the highest standards.
  3. Given the geography of Halifax town centre, additional licences would lead to more congestion and problematic contests for the very limited number of rank spaces.
  4. Evidence established that there was currently healthy competition between taxi operators in Halifax and the cap had not proved to be anti-competitive in effect.

Appeal determination and Hope & Glory test

Mr Fielden’s appeal was dismissed. In the course of the judgment, the Court accepted that the proper approach to taxi licensing appeals was that set out by the Court of Appeal in Hope and Glory [2011] EWCA Civ 31. The test, familiar to all those involved in appeals under the Licensing Act 2003, places the burden firmly on the appellant to establish that the decision being appealed against “is wrong” at the time of the appeal hearing in light of the evidence before the Court.

Having considered the evidence, the Court found that Mr Fielden had, on the balance of probabilities, failed to establish that: (1) the SUD report was unsound in its methodology or conclusions; (2) the council’s decision to introduce a cap of 37 licences in reliance on the report was unjustified, or (3) the refusal of Mr Fielden’s application for additional hackney carriage licences to operate a taxi-bus scheme was wrong.

The Court ordered Mr Fielden to pay the council’s costs of £14,000 in full.

Conclusion

This case demonstrates that the dwindling number of taxi licensing policies that place a cap on the number of hackney carriage licences can be robustly defended in the appeal courts, providing the evidence to justify the cap is sound and the potential benefit to the public can be identified.

Gary Grant of Francis Taylor Building acted for Calderdale MBC instructed by Elina Eady (Legal Services Department), Sarah Richardson (Acting Assistant Director of Customer Services) and Fiona Goldsmith (Principal Licensing Enforcement Officer).

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