Licensing / Pubs / 22 July 2016

Despite new pub codes, self-regulation still plays a key role

After many years of select committee inquiries, reports, super-complaints, consultation and extensive parliamentary debate, we now have a statutory code of practice and independent adjudicator overseeing the tied pub sector.

Those companies covered by the statutory code are committed to implementing it in the best way possible and working with the Pubs Code Adjudicator to ensure that the new code functions fairly for both companies and their tenants and lessees. As with any piece of legislation, and perhaps even more so as this regulates the commercial elements of a complex industry, we will have to wait and see how this affects the British pub sector and for all involved it will be a learning process.

At the same time, the implementation this week of three evolved codes of practice clearly shows that self-regulation is in fact stronger than ever.

Thirty-three companies in England and Wales (operating over 4,000 tied pubs) are signed up to the system, with a further six companies covering the majority of tied pubs in Scotland also on board. These include not just members of the British Beer & Pub Association and the Independent Family Brewers of Britain – who have been involved in the self-regulatory system for many years – but other operators who have now firmly endorsed the idea of robust codes backed by independent, low-cost dispute resolutions for rent issues and other matters.

There is no other business sector that operates such a system, with the codes covering every element of the relationship between the landlord company and their tenant. This includes obligations for both parties before an agreement is signed, pre-entry training to explain how the business model works and what the tenant can expect at the final interview for the pub – before moving on to key points in the ‘life’ of the agreement such as rent reviews, insurance, machines and general interaction with the pub company or brewery.

The codes are designed to be as clear and straightforward as possible, with a separate code for tenancies and another for leases, further highlighting that these are practical and workable documents that have been developed over many years of experience and designed specifically for the tied pub sector. For the first time, Scotland has its own code which takes into account legal differences in property law in Scotland and makes it clear that tied tenants have access to PIRRS (rent disputes) and PICA-Service (other disputes) through those with specific Scottish expertise.

The new codes are an evolution of the Industry Framework Code and replace the myriad individual company codes with one set of definitive codes. Lessees and tenants will continue to have access to low cost arbitration of rent and other disputes, through PIRRS and PICA-Service, which have operated successfully and are flexible enough to adapt to a sector where there is constant change. The codes are overseen by the Pub Governing Body which includes both company and tenant representatives and has an independent chair in the form of ex-BIS Select Committee chairman Sir Peter Luff who oversaw a number of Parliamentary hearings involving the tied pub sector.

Self-regulation in the pub sector works – as evidenced not just by the latest developments in the system but also by the fact that the dispute resolution procedures have been used in practice to solve and give redress to tenants, as part of a tailored and low-cost service of benefit to the thousands of pub operators across England, Wales and Scotland which will continue into the future.

Written by

Jim Cathcart

Further Reading