The Scrap Metal Dealers Act 2013 created a new (and rigorous) statutory framework for individuals and companies dealing with scrap metal imposing significant criminal penalties for any breaches; more local authorities are becoming aware of the additional options for dealing with sites where unauthorised activities are leading to complaints and pressure from residents (and councillors).
Who is covered?
The Act is deliberately wide ranging and requires anyone carrying on “business as a scrap metal dealer” to be licensed (section 1), this includes anyone who;
(a) carries on a business which consists wholly or partly in buying or selling scrap metal, whether or not the metal is sold in the form in which it was bought, or
(b) carries on business as a motor salvage operator (so far as that does not fall within paragraph (a)). (section 21(1)).
A motor salvage operator includes anyone who recovers salvageable parts from cars for sale or re-use and sells or disposes of the remainder of the car or who repairs and re-sells write-offs.
A key element is the fact that the person (which includes a company) is carrying on a business but this does not necessarily require there to be a profit element.
It is an offence (punishable by fines) for a scrap metal dealer not to be licensed (section 1(3)) and they must
- notify the licensing authority of any change in circumstances (section 8),
- display their licence (section 10(5)),
- verify the identity of any supplier of scrap metal (section 11),
- not pay for scrap other than by cheque of bank transfer (i.e. no cash transactions) (section 12),
- keep records of the receipt or disposal of scrap metal (section 15) and
- not obstruct the inspection of the site or any records by a police or local authority officer (section 16).
In addition, liability for many of these offences extends to individuals working for the dealer as well as the dealer themselves.
The local authority are not permitted to grant a licence unless the applicant is deemed to be a suitable person; when considering whether a person (including the site manager and any director, secretary or “shadow director” of any company) is suitable the authority is required to have regard to any previous convictions, enforcement action, previous refusal, or revocation of any relevant licence and whether adequate procedures will be in place to ensure compliance with the legal requirements of the Act (section 3(2)).
Schedule 1 of the Act sets out the procedure for applying for (and retaining) a licence, including the requirement for the authority to notify the Applicant if it is minded to refuse or revoke the licence and to allow an opportunity to make representations. There is a right of appeal to the Magistrates’ Court against a refusal, revocation or the imposition of any conditions on the licence and from there to the Crown Court.
Closure Notice and Orders
Schedule 2 of the Act provides the framework for enforcement and allows a local authority (or police officer) who believe a site is operating without a licence to issue a closure notice specifying steps to be taken to ensure that the site ceases to be used as an unauthorised site (para 2).
If the use continues, or is likely to resume, the authority (or police officer) can, after 7 days but not more than six months after the issue of the Closure Notice, apply to the Magistrates Court for a Closure Order under paragraph 4 of Schedule 2. The matter will be treated as a “complaint” (i.e. civil proceedings in the Magistrates Court).
A Closure Order can be made by the Court if it is satisfied that the Notice was served and that the use is continuing or is likely to resume. If made,
(3) A closure order may, in particular, require–
(a) that the premises be closed immediately to the public and remain closed until a constable or the local authority makes a certificate under paragraph 6;
(b) that the use of the premises by a scrap metal dealer in the course of business be discontinued immediately;
(c) that any defendant pay into court such sum as the court determines and that the sum will not be released by the court to that person until the other requirements of the order are met. (paragraph 5)
The Closure Order can also impose requirements as regards access to the site (or part of the site, including premises unconnected with the use as scrap yard) and there is, again, a right of appeal to the Crown Court.
Obviously the requirement for payment of, in effect, a sum as security for compliance can have a serious effect on the finances of the business and, conceivably, could lead to a situation where the business no longer has the wherewithal to pay to clear the site.
In short, the 2013 Act has created a very robust and strict regime for the operation and control of scrap metal dealers and, therefore, scrap yards. A number of local authorities have already secured closures of sites and significant penalties for non-compliance with the new regime; I suspect more will be following suit.
Members of Becket Chambers can provide expert detailed advice for local authorities, businesses and individuals involved in disputes about the operation of scrap metal yards; please do not hesitate to contact the clerks for more information.