Introduction

The fit and proper test has been the central pillar of decision making in taxi and private hire licensing for decades. This is the case whether you are, or are to be, licensed in London, outside of London, Scotland and Plymouth (who have its own licensing legislation). 

Despite the importance of the fit and proper test, it has never officially been defined in primary legislation or official government guidance.  Instead, what constitutes “fit and proper” is something that has developed over time through court judgements that looked at the issues and each adding a piece of the puzzle to formulate a workable set of criteria as to what is relevant when considering fit and proper. 

The lack of any statutory definitions and national minimum standards has left it to licensing authorities to use their discretion in cases where an applicant or licence holder’s fitness has been called into question. 

However, this is due to change in the near future with the fit and proper definition proposed by the Department for Transport in the statutory taxi and private hire licensing guidance. 

In this article I will look at the current position with regards to fit and proper and then how this will change in the near future once the statutory guidance is adopted.

Fit and Proper

As I mentioned, the fit and proper test has been the central pillar of decision making in taxi and private hire licensing for decades irrespective of where you apply for, or hold, a taxi or private hire licence. 

Local Government (Miscellaneous Provisions) Act 1976:

  • 51 in relation to Licensing of drivers of private hire vehicles (England and Wales outside London)
  • 55 in relation to Licensing of operators of private hire vehicles (England and Wales outside London)
  • 59 in relation to licensing of drivers of taxis (England and Wales outside London)

Civic Government (Scotland) Act 1982

  • 13 in relation to licensing of drivers of taxis and private hire cars in Scotland

Despite the importance of the fit and proper test, it is not officially defined in primary legislation.  This, coupled with the absence of minimal national standards, has created a situation where individual licensing authorities have set their own fit and proper assessments and criteria, sometimes relying on the “any other reason” provisions in legislation to capture elements of fit and proper that are not explicitly referenced such a medical issues or offences. 

The void left by the absence of any definition in primary legislation has been filled by a body of case law that has developed over the years.  This body of case law is today accepted as the statutory definition against which the fitness of an applicant, or licence holder, is tested.  In essence, common law has established that fit and proper is concerned with the personal qualities and professional qualifications of an individual. 

Several attempts have been made by licensing authorities to “stretch” the fit and proper definition to address concerns around, for example, cross-border hiring, such as in the case of Delta Taxis & others v Knowsley Metropolitan Borough Council and Uber Britannia Limited v Brighton & Hove City Council. In these cases where authorities have attempted to stretch fit and proper beyond personal characteristics, the courts have consistently quashed these policies and decisions.

Fit and proper redefined

 

Against this backdrop, the Department for Transport has recently put forward proposals to redefine the fit and proper test and to put it on a statutory footing.  

The definition of fit and proper proposed by the Department for Transport is: 

Without any prejudice, and based on the information before you, would you allow a person for whom you care, regardless of their condition, to travel alone in a vehicle driven by this person at any time of day or night? 

Whilst it is the case that the proposed redefinition by the Department for Transport has not changed the fundamental principle that fit and proper should be concerned with promoting public safety, the application of the proposed definition will have a future impact. 

Before I consider this, it is also worth saying that whilst the Department for Transport is yet to publish the final version of the statutory guidance, it is not anticipated that any material changes to the proposed definition of fit and proper will be made.  The proposed definition is not very dissimilar to the one proposed by the Institute of Licensing its “Guidance on determining the suitability of applicants and licensees in the hackney and private hire trades” published in April 2018.  Furthermore, the Government has also stated that “The Department therefore expects these recommendations to be implemented unless there is compelling local reason not to.”

Criteria

It is of course the case that in order for licensing authorities to assess whether they will allow a “loved one” to be driven in a vehicle driven by a new applicant for a licence or an existing licence holder, it is necessary to set the standards against which they will measure this. 

As I previously mentioned, there are no national minimum standards for taxi and private hire licensing (yet) and this has left licensing authorities to set their own standards. 

Soon however, the fitness of an applicant or licence holder will be judged against national minimal standards.  We already know from the Department for Transport’s response to the Taxi and Private Hire Task Group report it said that its statutory guidance will ultimately shape the content of the minimum standards: 

“There is consensus that common core minimum standards are required to regulate better the taxi and PHV sector, and the recommendations in this document [Taxi and Private Hire Licensing – Statutory Guidance] are the result of detailed discussion and consideration. The Department therefore expects these recommendations to be implemented unless there is compelling local reason not to.” 

The point of this is that unless an applicant or licence holder can demonstrate that they comply with all of these, they will be deemed to be unfit to be granted, or hold, a licence.  In practical terms, some of these can be described as mandatory grounds for refusal.  These include matters such as the requirement to undertake a criminal records check, have a medical check done or pass a driving assessment.  If an applicant or licence holder refuse to undertake these, their licence application will be deemed invalid and therefore in effect be refused. 

Other assessments can be described as discretionary grounds.  These are assessments where the fitness of an applicant or driver is subject further scrutiny and involves a greater level of discretion.  These would be matters such as applicants or licence holders with a relevant criminal record, complaints or medical conditions. 

I make the distinction between assessments that can be described as mandatory or discretionary because it is only really discretionary assessments that will, on the whole, be relevant to the new fit and proper test.

Benefit of the doubt

Earlier on in this article, I mentioned that whilst the fundamental principal of fit and proper will remain the same (i.e. public safety), the practical application of the new approach has the potential to be substantially different for the trade.  

The Department for Transport’s has raised the decision-making bar much higher in the draft statutory guidance: 

Licensing authorities have to make difficult decisions but the safeguarding of the public is paramount. All decisions on the suitability of an applicant or licensee should be made on the balance of probability. This means that an applicant or licensee should not be ‘given the benefit of doubt’. If the committee or delegated officer is only “50/50” as to whether the applicant or licensee is ‘fit and proper’, they should not hold a licence. The threshold used here is lower than for a criminal conviction (that being beyond reasonable doubt) and can therefore include information that goes beyond criminal convictions. 

The Government’s expectation is clearly laid out here; if a licensing authority has any doubt as to the fitness of the applicant or licence holder (bearing in mind the new fit and proper test), the application should be refused or licence revoked. 

This advice has been bolstered in the statutory guidance: 

“Although it remains the case that licensing authorities must reach their own decisions, both on overall policies and on individual licensing matters in light of the relevant law, it may be that this Guidance might be drawn upon in any legal challenge to an authority’s practice, and that any failure to adhere to the Guidance without sufficient justification could be detrimental to the authority’s defence.” 

This will give licensing authorities further confidence in their decision making. 

My concern with the new proposed definition of fit and proper is that it will inevitably lead licensing authority decision makers to consider matters in a much more subjective manner.  It is hard to see how this can be avoided since the phraseology used includes such things as “would you” and “whom you care”. 

The concern is whether such an objective assessment will be made at the expense of objectively assessing the information and evidence before it and making a judgement based on this rather than feelings.  

There is a whole host of practical difficulties with a more subjective approach to decision making.  For example, every individual in the decision-making process will have their own views and feeling on the matter.  Licensing hearings can often be emotive and at times feelings can run high.  There is the potential for licence refusals, suspensions and revocation where an applicant or licence holder lose their temper at a hearing – which of course may have nothing to do with the substantive reason for them being there. 

People’s right of appeal will not be affected by any of these changes.  I anticipate that, unless licensing authority decision makers gets this right, there will be an increase in licensing appeals.  What is fundamentally important in my mind is clear and robust training so that licensing authority decision makers understand that they remain quasi-judicial, notwithstanding the redefined fit and proper test, and as such their responsibility to objectively assess evidence and, based on this, make their decisions remains unchanged.

Stephen McCaffrey

Regulatory defence barrister specialising in taxi and private hire licensing law, appeals and defence.

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