Getting behind the PPL's £20m refund row

Businesses that have paid fees to music licensing organisation PPL could be set to receive substantial refunds after a High Court Appeal ruling.

Now a recent appeal case against the PPL has resulted with a High Court decision that they have grossly over estimated their own fees, and a judge has ordered them to process refunds to everyone affected, which could lead to as much as £20million being refunded to affected businesses in the UK. Various types of businesses are affected including large stores, small shops, factories and offices, and typically licensed premises such as bars, restaurants and hotels.

So who are the PPL? The organisation is established under copyright laws, the most recent incarnation being the Copyright, Designs and Patents Act 1988. Their statutory role is, in simple terms, to collect money on behalf of copyright holders and then disseminate that money to them – a royalty payment. The PPL deals with copyright inherent in the sound recording, whereas the other agency (unaffected by this case), the Performing Rights Society (PRS), deals with the copyright held by the author(s) of the material – the two are not necessarily the same! So, for example, PRS would collect money on behalf of Lennon/McCartney, the authors, where the PPL collects money on behalf of Apple, the owner of the sound recording itself.

The level of fee at which a business has to pay is dependent on several factors including the mode of delivery of the copyrighted material (is it a jukebox, live band, TV, radio, and so on), the size of the premises where the material is performed or played, and other factors. In some cases the fees can be pretty eye-watering and it is no surprise that many businesses have refused to pay. Those who do refuse, of course, are taken to court and invariably lose.

But now there is some excellent news for PPL fee payers – you could be due a refund! At an appeal case heard in February 2010 – Phonographic Performance Ltd v British Hospitality Association – the judge determined that the fee increases introduced in 2005 had “no justification”.

The judge, the Hn Mr Justice Arnold, imposed a reduction of each of the tariffs from 2006 to 2010, back to the 2005 tariff. This will result in refunds for many operators, who can claim any payments they made in 2006 to 2010 over and above what they would have paid had the continue to pay at the level of 2005 tariff. There is an excess rule that any refund owed must be over £50 but the good news is that you can add up any monies owed from each of the affected years to get over the £50 hurdle.

I understand that PPL will be contacting every affected business with instructions on how to claim the refund although that will probably not happen until May 2010. If you believe you may have been affected and could be due a refund you can visit www.ppluk.com for more information, or seek legal advice.

Stephen McGowan is a licensing law specialist at Scottish law firm Tods Murray LLP. He is a member of the Law Society Licensing Committee, a Council Member of the BII in Scotland, and author of “Licensing and Gambling Law in Scotland” (2009). Email Stephen by clicking here.

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