Decision

Award summary – August 2020 – 1

Published 12 April 2022

Applies to England, Northern Ireland and Wales

Publisher’s Note: The Pubs Code Adjudicator encourages openness and transparency in the operation of the Pubs Code etc. Regulations 2016. Publication of awards made in Pubs Code arbitrations, or summaries of those awards, enables the industry to better understand previous decisions and consider how the Pubs Code is being applied in individual cases. Neither the Pubs Code Adjudicator nor an arbitrator is bound to follow published awards in applying the law, but such awards can be used to support the industry’s consideration of the proper interpretation of the Pubs Code. Parties are encouraged to take independent professional advice about their situation.

The outcome of an arbitration is based on its own facts and the evidence produced in the case and is not binding in other cases where the landlord and tenant are not the same. The Pubs Code Adjudicator does expect a regulated pub-owning business to consider its understanding of the law in light of each award that makes a finding on the interpretation of the statutory framework and to adjust its behaviour towards tenants as appropriate. The publication of an arbitration award or an award summary does not mean the Pubs Code Adjudicator endorses the decision and it does not form legal advice about any issue.

This summary is provided to assist in understanding the arbitration decision. It does not form part of the decision or reasons for the decision.

1. Summary of Findings

In determining a preliminary issue, the arbitrator held that the complaint of the tied pub tenant (“TPT”) about the conduct of a Business Development Manager (“BDM”) was in time and the alleged conduct did not predate the coming into force of the Pubs Code etc. Regulations 2016 (“the Pubs Code”). The issue could therefore be the subject of a Pubs Code arbitration referral. A complaint about the conduct of the Pub Owning Business (“POB”) which occurred before the Pubs Code came into force could not however in this case be the subject of an arbitration.

2. Background

The TPT entered a lease of a pub in 2015.

The TPT made a referral to the Pubs Code Adjudicator (“PCA”). The referral included an alleged breach of regulation 10 of the Pubs Code (a POB must ensure that a TPT has a sustainable business plan before entering into an agreement with them) and Regulation 41(1)(c) (a POB’s should ensure that its BDMs deal with a TPT in accordance with the principle of fair and lawful dealing). The alleged breach of regulation 41(1)(c) related to a complaint made by the TPT in 2019 about a BDM’s conduct in allegedly failing to properly communicate with the TPT in a manner consistent with the principle of fair and lawful dealing.

This award related to a preliminary issue which had to be satisfied before the substantive arbitration could proceed, that being whether the referral had been made in connection with an issue which pre-dated the coming into force of the Pubs Code.

3. Arbitrator’s Findings

The arbitrator held that the Pubs Code is not capable of applying to acts that took place before it became law from 21 July 2016. Unless the Pubs Code applied retrospectively (which the arbitrator considered it did not) only the POB’s dealings from 21 July 2016 were capable of being caught by the Pubs Code.

As the Pubs Code is prospective only and the lease was entered into in 2015 (predating the Pubs Code) the referral about the alleged breach of regulation 10 could not succeed as this related to events pre-dating the start of the tenancy. However, as the alleged breach of regulation 41 related to conduct of the BDM that the TPT first complained about in 2019, well after the legislation had come into force, this complaint about the BDM’s conduct could proceed to arbitration.