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Brighton & Hove City Council (20 010 294)

Category : Other Categories > Commercial and contracts

Decision : Upheld

Decision date : 19 Oct 2021

The Ombudsman's final decision:

Summary: Mrs X complained the Council took too long to complete her licence and charged her for legal fees the amount of which she was not informed about at the outset. The Council has already admitted it was at fault when it delayed and failed to keep her informed of progress. It was also at fault for delaying in providing Mrs X with clear information about the amount of legal fees she needed to pay. The Council has already apologised and offered Mrs X £300 for the delays and failure to keep her updated. It has also agreed to apologise for its failure to provide timely information about the legal costs she would incur.

The complaint

  1. Mrs X complains the Council:
    • delayed in finalising her street trading licence;
    • failed to provide her with realistic timescales;
    • charged her £350 for legal fees which were not detailed in the advertisement; and
    • told her she could not open for reasons related to COVID-19 even though other food outlets were trading.
  2. Mrs X says this caused her frustration because it meant she experienced delays in setting up her business which led to lost earnings.

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The Ombudsman’s role and powers

  1. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
  2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  3. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

  1. I spoke to Mrs X and considered her view of her complaint.
  2. I made enquiries of the Council and considered the information it provided.
  3. I wrote to Mrs X and the Council with my draft decision and considered their comments before I made my final decision.

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What I found

What happened

  1. In February 2020, the Council placed an advertisement in a local newspaper for a refreshment facility in a recreational area the Council owned. The Council appointed third party commercial estate agents to manage the process.
  2. At the beginning of June, Mrs X submitted an application. The estate agents forwarded Mrs X’s bid to the Council on 15 July.
  3. Between June and August Mrs X chased the Council and the estate agents for a response. The Council advised Mrs X on 19 August that it had decided to proceed with her application and it would instruct solicitors to draw up the contract for her licence. The Council said it would check the legal fees and forward the costs “for your approval”. Also on 19 August the estate agents submitted draft terms for the licence to the Council.
  4. On 25 August, the Council emailed Mrs X and said it had not yet had confirmation of the legal fees and her application had been slightly delayed whilst the Council dealt with queries from ward councillors.
  5. On 2 September, the Council emailed Mrs X and said it would now proceed with her application. Mrs X emailed on 7 September again asking how much the legal fees would be.
  6. On 8 September the estate agents chased the Council for a response to its draft terms. The Council approved them the same day. On 17 September, following discussions with the Council, the estate agents contacted the Council’s legal section and asked it to draft the licence as the Council had not drafted one of this type before.
  7. On 12 October the estate agents contacted the Council and asked it to update Mrs X because she was unhappy she had heard nothing further from the Council. The Council responded and stated it was sorry but it was busy and had little capacity.
  8. At the beginning of November, the case was reassigned in legal services. Emails between the new solicitor and the estate agents indicate no substantive work had been started prior to then.
  9. On 30 November, the estate agents emailed Mrs X to inform her that her contribution to the legal costs would be £350. It attached a list of licence fees to the email which was for the year 2015/16. It did not specify which of the licence fees in the list applied to Mrs X’s type of licence.
  10. Mrs X queried the legal fees the same day. A Council officer responded and said “I must admit that there is not much information on application process... You will be paying a very small fee and legal fees are standard as set out by our in-house solicitors... Although this is the first trading licence for the parks we are issuing licences for other Council property and the fees are uniform".
  11. Mrs X paid the legal fees.
  12. The Council completed the draft licence on 1 December which Mrs X approved by email on 8 December. The Council drafted a final copy of the licence which Mrs X returned on 16 December. At this point Mrs X also raised issues about how to access the site because the height barrier was too low to allow her vehicle through. The Council arranged for Mrs X to have a key to the barrier.
  13. On 6 January, Mrs X emailed the Council and said “I have paid the legal fees and now I can’t gain access because of a blooming padlock!...this is just unacceptable!”
  14. A Council officer responded the next day and stated “Please refrain from threats to vandalise Council’s property or I will have to report the matter to my internal client and recommend that they consider your licence carefully. We expect a professional business relationship... Exclamation marks and threats rarely achieve good outcome from my experience”.
  15. Mrs X responded and denied her mail contained any threats.
  16. The final licence was completed on 18 January 2021.
  17. On 19 January Mrs X emailed the Council to clarify she could begin trading. A Council officer responded and said “I was now advised that the licence is completed. Please ensure you follow the terms of the licence whilst trading”.
  18. Mrs X queried why she would not follow the terms of the licence. The officer responded and stated “The reason that I requested yet again that you follow the terms is because I received reports that someone accessed the car park at [the site] on 14th January. You assured me that you will not trade without the licence and I do hope this is the case”.
  19. Mrs X responded and strongly denied having traded at the site before the licence was approved.
  20. Mrs X was unhappy with the Council’s handling of the process and complained.
  21. The Council responded and stated “Whilst it is challenging to assign timescales for issuing a property licence we have identified two occasions in which we should have been more transparent throughout the process but unfortunately, our service fell short of your expectations.  We also accept we should have taken further steps to explain the difference between a Street Trading Licence and [other] Licences and how they work”. The Council said:
    • there were delays in approving Mrs X’s application and it should have managed the process better although officers had responded to her emails in a timely manner;
    • there was an unreasonable delay following instructions to legal services to draft the licence. The Council stated it should have kept Mrs X updated and explained why the delays were occurring. It acknowledged its actions had caused her frustration;
    • the marketing advertisement did not mention there would be legal fees. However the Council had kept Mrs X informed of the fees and it needed to raise funds to be reinvested in the service. The Council said the legal fees had been incurred for drafting and negotiating the licence.
  22. Mrs X remained unhappy and complained again. In its response the Council said:
    • it had not delayed in drafting and issuing a new licence as this process could take between three and six months. However, it then went on to say “I can see that [in our stage 1 complaint response we gave] a good explanation as to why there were delays in finalising the draft licence”;
    • it had failed to keep her informed of the progress and timescales. The Council offered Mrs X £300 for the avoidable distress this caused her.
  23. Mrs X remained unhappy and complained to the Ombudsman.

My findings

Delays in the process

  1. The Council has already admitted it took too long to issue the licence. It also admitted it failed to keep Mrs X informed of timescales and progress. Some of the communications from the Council to Mrs X were also unhelpful and exacerbated an already difficult situation.

Legal fees

  1. Councils are allowed by law to charge for the fees incurred in drawing up a licence. However, we expect councils to act transparently and to provide in a timely manner the information necessary for members of the public to make informed decisions.
  2. The Council did not state in its advertisement that applicants would have to pay legal fees. When this was first mentioned, in mid-August, Mrs X asked for clarification of how much these would be. Despite her asking on a number of occasions, the Council failed to provide a response until the end of November. This was poor administrative practice and is fault.

Injustice

  1. Where there has been fault causing injustice, we try to put the person back in the place they would have been had the fault not occurred. The Council was entitled to charge legal fees. Therefore, Mrs X would always have had to pay them. And it is likely that Mrs X would have proceeded with her application if she had been informed earlier of the amount of the fees. The injustice from the fault identified, therefore, is the frustration Mrs X was caused by the Council’s delay in providing the information she required. This added to Mrs X’s already existing frustration caused by the delays in processing her application.
  2. Where we find a complainant has experienced frustration or distress because of fault in the Council’s actions, we will recommend a small symbolic payment, usually between £100 and £300, to acknowledge that injustice. The Council’s offer of a payment of £300 for the frustration it caused her is appropriate to remedy the injustice Mrs X experienced from the delays in issuing the licence, the failure to keep her updated and the delay in providing information about the legal fees.
  3. Mrs X wants the Council to repay her for lost earnings. We do not recommend compensation payments in the same way as the courts. We can remedy quantifiable losses or recommend symbolic payments to acknowledge injustice. Where larger sums of money are claimed it is more fitting for the courts to consider the matter, particularly where the losses are not certain and need professional consideration.

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Agreed actions

  1. Within one month of the date of the final decision the Council has agreed to apologise to Mrs X for the frustration caused by the delays in issuing the licence and its failure to inform her in a timely manner how much the legal fees would be. It has already offered to pay her £300 which is appropriate and in line with our Guidance on Remedies.
  2. Within three months of the date of the final decision the Council has agreed to:
    • remind relevant staff of the need to keep applicants informed of progress and timescales; and
    • ensure that where legal fees are to be incurred, applicants are informed in advance there will be a charge and are advised of the amount as soon as possible.

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Final decision

  1. There was fault leading to injustice. The Council has agreed to my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman

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