Selection Processes and the Services Directive
The rules that determine the circumstances in which a local authority may grant a casual trading licence to one market trader and not to another, via a selection process, are found in the Services Directive and the "Ennis" case.
Whether a casual trading licence in valid for one year or for an indefinite period is also related to whether a selection process is being employed.
When a Selection Scheme Cannot be Used to Grant or Refuse a Casual Trading Licence
When market trading is licenced in a casual trading area that covers a whole town or in the functional area of a local authority, the number of potential trading spaces is always greater than the number of applicants. In such circumstances licence applications can not be subject to a selection process that results in a licence being refused.
When a Selection Scheme Can be Used to Prioritise the Allocation of Trading Spaces
However in such circumstances a local authority may use a selection scheme to prioritize the allocation of trading spaces, as a local authority has the right to say where trading will occur. That being said, there are some limitations in this area that prevent a local authority from moving a market to a peripheral location, at the expense of allowing trading to continue in a towns’ retail center. (See "The Area Reserved for Casual Trading".)
When market trading is licenced in a casual trading area that covers a whole town, or in the functional area of a local authority, a casual trading licence can only be granted for an unlimited period or be subject to automatic annual renewal.
Guidelines, EU Services Directive, Notice for Local Authorities
Article 11 of the Services Directive states that authorisation (the granting of a casual trading licence) shall not be for a limited period (one year). The exception for local authorities that do not designate casual trading areas, refers to the licencing of casual trading in the functional area of a local authority.
These guidelines issued in 2009 predate the judgement in the "Ennis case" of 2012. That judgement determined that where trading is licenced in the functional area of a local authority or where a casual trading area covers a whole town, Article 11(1) would apply and licences cannot be issued for a limited period.
Section 4(8) of the Casual Trading Act 1995 states that a licence shall continue in force for such period not exceeding 12 months and shall then expire. Section 4(8) limits the duration of a licence to one year and does not apply in these circumstances.
EU Services Directive 2006/123/EC
Article 11
Duration of authorisation
Article 11(1) An authorisation granted to a provider shall not be for a limited period, except where:
S.I. 533 European Union (Provision of Services Legislation) Regulations 2010
Duration of authorisations
When a Selection Scheme Can be Used to Grant or Refuse a Casual Trading Licence
Guidelines, EU Services Directive, Notice for Local Authorities
Guidelines, EU Services Directive, Notice for Local Authorities
Article 12 pertains to the designation of a casual trading area of a limited size. A casual trading area of a limited size can only be designated in circumstances where market rights exist in a specific location, such as a town square, or in circumstances where a town has no market rights at all.
In circumstances where a casual trading area is designated in a town square, the number of applicants may be greater than the number of available trading spaces. In such circumstances a selection scheme must be used to determine which traders will be granted licences. In this context a casual trading licence may only be granted for a period of one year, with new licences being applied for and issued annually.
A Casual Trading Licence cannot be automatically renewed when a selection scheme is being employed. Section 4 (8) of the Casual Trading Act 1995, states that a licence shall continue in force for such period not exceeding 12 months and shall then expire. Therefore Section 4(8) does apply in these circumstances.
The Criteria for a Selection Scheme
Article 12(1) states that any selection procedure has to be transparent and impartial and conform to the criteria set out in Article 10(2). This prevents a local authority from implementing a selection scheme in an arbitrary manner.
For a selection scheme to be impartial, one trader cannot be favoured over another. Consequently a selection scheme cannot ordinarily favour food traders over traders selling other vendible commodities.
(For a description of ‘goods’ or ‘Commodities’, see Definition of a Market Right)
There is a a caveat to the impartiality of any selection scheme, as Article 12(3) allows other considerations to be taken into account, when determining the criteria of any selection process. These considerations are cited in the Services Directive legislation as ‘social and cultural policy objectives and overriding reasons relating to the public interest’.
‘Social policy objectives’ translates as ‘social inclusion’ or ‘social cohesion’ objectives which simply means promoting a sense of community and providing employment. A local market is intrinsically a social experience and often engenders a sense of belonging to a local community as well as creating employment, diversification and second income opportunities. In fact the low costs associated with market trading can act as a magnet for start up business, in many ways a market may be thought of as an entrepreneurs’ convention as it inherently facilitates job creation.
Prioritising Local and Artisan Traders
A local authority may therefore promote social cohesion by prioritizing traders that live within a certain distance or radius from where a market is being held. A local authority may therefore prioritize traders that are ‘Local’.
Cultural policy objectives translates as supporting local food and craft producers. These types of traders are commonly referred to as ‘artisan producers’. A local authority may therefore prioritize traders that it classes as being ‘Artisan’.
Prioritising Traders by Time Trading in a Market
A local authority may also facilitate entrepreneurship and job creation by prioritising the time a trader has traded in a market.
To properly support a local market, it is essential that traders who have been trading in a market for one year are prioritized over new traders entering a market for the first time. New ‘small to medium enterprises’ need to know that they will be able to continue trading in the same market after their first year. Similarly it is essential that traders who have been trading in the market for three years should be prioritised over those that have only traded for one year.
As most new businesses fail in their first or second years those traders that have traded for three years or more can be seen as the established heart of a market. They will have honed their product offering and developed a solid customer base. The customers they attract are crucial to the overall viability of the market and as such they should be prioritized over one year traders.
A local authority may prioritize ‘time trading in a market’ in terms of new traders and those that have traded for one year or three years. A local Authority may therefore prioritize traders by their ‘time trading in a market’.
Selection Schemes Based on a Point Based System
A local authority may extend the impartiality of any selection scheme by prioritizing for ‘time traded in a market’ and whether a trader is ‘local’, or an ‘artisan’ producer. Traders are then prioritized via a selection scheme that is based on a points based system.
The selection scheme in the table below was devised by Bantry Market Working Group and includes all the selection criteria previously mentioned. This selection scheme was judged to be lawful when challenged in the Bantry District Court and forms part of the bye-laws for Bantry Market.
[For the definitions of Permanent, Regular and Temporary Traders at Bantry Market see bye-law 4.7(b) ]
However the selection scheme is only used to prioritize the allocation of spaces at Bantry market. The selection scheme cannot be used to refuse an application for a casual trading licence on the grounds that there are no further trading spaces available. This would run contrary to the judgement in the ‘Ennis’ case.
(See the last paragraph of this article, and Market Property Rights and the Common Good)
Selection Point System for Licence Applicants
EU Services Directive 2006/123/EC
Article 12
Selection From Among Several Candidates
S.I. 533 European Union (Provision of Services Legislation) Regulations 2010
Power of competent authority in the State to apply a selection procedure in certain cases
(3) In the circumstances referred to in paragraph (1), the responsible competent authority in the State—
EU Services Directive 2006/123/EC
Article 10
Conditions for the Granting of Authorisation
(e) objective;
S.I. 533 European Union (Provision of Services Legislation) Regulations 2010
Criteria and Conditions for Granting an Authorisation
(e) objective,
Simmonds & Anor -v- Ennis Town Council (2012) IEHC 281 (10 February 2012)
Section 6, Discussion & Determination
When a whole of a town is designated as a casual trading area, the number of possible trading spaces may be said to be unlimited. The natural size of a towns market reflects the natural carrying capacity of the town. The ratio of traders to customers determines the viability of trading and therefore the natural size of town’s market. The ratio of traders to customers is related to the facilities that provide public parking and public access to a town’s market.
Simmonds & Anor -v- Ennis Town Council (2012) IEHC 281 (10 February 2012)
Section 6, Discussion & Determination
A local authority’s right to refuse a licence because “There are not sufficient trading bays available in a casual trading area” was assessed in the ‘Ennis’ case. It was determined that a market that is not confined by metes and bounds, does not, in practice, present a problem in terms of it’s size and scale. It is therefore inappropriate to make a decision limiting market rights in these circumstances.
A Local authority cannot refuse to grant a casual trading licence to an applicant wishing to trade a franchise market, (not contained by metes and bounds), on the grounds that there is not a trading space available.