Application of the Pubs Code 2016

The Pubs Code came into effect on 21 July 2016. The Code only applies in England and Wales and affects approximately 11,500 tied tenants of the six largest pub owning companies.

The legislation creating the Pubs Code was contained in the Small Business, Enterprise and Employment Act 2015. The Code was laid before Parliament in July 2016 in the form of two Statutory Instruments and came into force then.

It was thought necessary to introduce the Legislation creating the Pubs Code and its Adjudicator following several Select Committee investigations over a number of years. This was mainly due to the perceived disparity in negotiating power between individual tenants and the major pub groups. As the Bill progressed through Parliament Members succeeded in increasing the scope of the proposed powers of the Code. Probably the most important change to the Bill was to introduce the Market Rent Only (MRO) option. This gives tenants greater flexibility in how they operate their pubs by allowing them greater choice on the level of their ties to the pub owners.

The operation of the Pubs Code is overseen by the post of the Pubs Code Adjudicator (PCA). With a long history of distrust between some tied tenants and the pub owning companies it was recognised that the perceived impartiality of the PCA was crucial for the Code to operate successfully. Concerns were raised by some tied tenants and organisations when it was announced that Paul Newby had been appointed as the first PCA.

During his career as a Chartered Surveyor Mr Newby has personally worked on a number of projects with several of the major pub companies. Furthermore the partnership he worked for, and continues to have some financial links to, is likely to continue to work closely with these companies. Concerns were expressed at his appointment that this will create conflicts of interest in his role when acting as an arbiter between tenants and these companies. With the Pubs Code having been in operation for well over a year these concerns do not seem to have been completely addressed.

Both the MRO and PCA issues featured extensively in a Westminster Hall debate on 14 April 2016 and when the PCA appeared before the Department for Business, Innovation and Skills Committee on 10 May 2016. The most recent substantive debate took place in the House on 26 January 2017, and has been the subject of written questions in Parliament and press interest over the last 18 months. Over the course of 2017 the first Pubs Code Adjudicator Annual Report was released and a Deputy Pubs Code Adjudicator appointed to help deal with increasing case load. However, towards the end of the year Mr Newby had to write to update the Chair of the BEIS Committee on the operation and effectiveness of the Code. Recent press articles