Distribution of scarce permits

Scarce permits in the Netherlands may be distributed according to specific regulation. For example, a lottery of scarce permits can determine who is eligible for a permit, however, the lottery should be done according to a fair and clear procedure.

Scarce permits in the Netherlands may be distributed according to specific regulation. I’ve For example, a lottery of scarce permits can determine who is eligible for a permit, however, the lottery should be done according to a fair and clear procedure. Case law shows that the Services Directive imposes requirements on almost all scarce permits for services, including the requirement that these permits may not be granted for an indefinite period. You may find it helpful when a lawyer assist you to protect your interest in this procedure. In my book Business Licences in the Netherlands you can read more about this topic. 

RESTRICTION ON SCARCE PERMITS 

There must be an urgent reason of public interest to limit the number of permits available. This limitation is often the subject of litigation for administrative lawyers. Aggrieved applicants often do not accept what is put forward as a reasonable reason for limiting the number of permits. For example, the restriction of permits for canal boats of a certain length in Amsterdam was declared to not have an urgent reason of public interest, justifying the restriction (Council of State, 7 June 2017, ECLI:NL:RVS:2017:1520). An urgent reason is for example, the restriction of permits for games of chance in order to curb (the chance of) addiction, to protect the consumer and to combat criminality and illegality. If the permit allocation procedure has been adequately and timely announced, the following requirements apply to the application process. Also check out the top 5 of scarce licences

PROCEDURE FOR DISTRIBUTING SCARCE PERMITS 

1) The Licencing authority must apply the distribution criteria for scarce permits equally to all applications and may not deviate from the criteria in individual cases. Not even if these criteria are formulated in a policy for the allocation of permits. This requirement stems from the principle of equality.

2) Even if the choice of a particular allocation procedure has been announced in good time, it is no longer possible to switch to another allocation procedure once an application procedure has started. This requirement also stems from the principle of equality.

3) In principle, the licensing authority cannot grant scarce permits for an indefinite period of time. This requirement stems from the equality principle and prevents the "chosen" permit holder from being disproportionately advantaged. Deviations from this requirement are not very likely in the case of scarce permits for an economic activity. In the case of other scarce permits, deviations may be justified by the principle of legal certainty, under certain circumstances.

4) Restricting real competitive opportunities for applicants in the distribution of scarce business permits is only possible if it is sufficiently justified by an overriding reason in the general public interest as referred to in Article 4 of the Services Directive. Here too a lawyer can provide assistance as there is plenty of case law from the European Court on this method of restricting permits. 

GRANTING A PERMIT IN THE ORDER OF RECEIPT 

The 'order of receipt' criterion fits in with the municipality’s lack of concern regarding (the quality of) the activity to be carried out, as long as the legal conditions protecting a public interest are met. As a distribution mechanism it therefore fits well with a licensing system in which the government is also neutral towards the activity to be performed, and only interferes to protect a specific public interest. First come, first served only becomes a distribution mechanism if the step is taken from one-for-one processing to processing in which the order of entry is a selection criterion for the distribution of permits among all (potential) applications that are treated equally and impartially. Someone who is already a permit holder should not be favoured, therefore the period of validity should be limited. In the case of a permit for services, no exception is possible for this limited period of validity. 

COMPARISON OF APPLICANTS FOR A PERMIT 

In a comparative test, the municipality directly asserts a public interest in the activity to be performed. With the comparative test, the municipality conducts a comparative judgment of the most favourable applications, in the light of the chosen selection criteria, announced in advance. This is more in line with the classic concession, where the municipality itself recognizes the public interest in the activity to be performed and therefore considers it desirable, for example, when approving the exploitation of scarce natural resources in the public interest. 

WAITING LIST FOR SCARCE LICENSES 

Regardless of the distribution mechanism, one can work with a waiting list. The legal design of the waiting list can differ, but often requires regulation. Three variants of a waiting list for permits are possible:

i.                    an application is held until a new permit becomes available (for example, due to the end of the validity period of a granted permit), or

ii.                  a permit is granted but under a condition of availability within a certain period, or

iii.                the waiting list of applicants may function as a "reserve list" to use any unused permits already issued, or as a way of accommodating a rolling system of application and granting.

An important consideration in such mechanisms is the period of validity of the permits, as this should not be unlimited. In addition, current permit holders should not be given preferential treatment over others. 

OBJECTING TO PERMIT REFUSAL 

If the requested permit is denied, the applicant may object to the decision denying the permit. If the objection procedure does not bring a good result then you can appeal with the court. More on litigation on licences you will find here. One of Blenheim’s permit lawyers will be able to determine the chances of an appeal against the decision to refuse a permit.

Ask Mark van Weeren, for free advice on issues with permits, such as the lottery for scarce permits explained above.

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