Guidance

PCA Advice Note: Timing of referral for arbitration by tied pub tenants (non-MRO disputes)

Updated 8 June 2023

Applies to England and Wales

1. What does this advice address?

This advice note is about the time limit for a Tied Pub Tenant (TPT) to refer for arbitration any dispute, other than one about the Market Rent Only (MRO) option ^{[footnote 1]}.

Time limits for referring a dispute which is directly about the MRO option are different and information about them can be found here.

The time limit to make a non-MRO referral to the PCA for arbitration is set out in statute and has been the subject of differing interpretations by tied pub industry stakeholders, including in some Pubs Code arbitrations. Interpretations of the time limit have included that:

(1) The TPT may make a referral within four months of a dispute arising about an alleged breach of the Pubs Code

(2) The TPT may make a referral within four months of giving notice to the pub-owning business (POB) of an alleged breach (where such notice can be given at any time)

(3) The TPT may make a referral within four months and 21 days of a dispute arising.

The purpose of this statutory advice is to assist the industry by setting out the PCA’s view on the time limit for referring a non-MRO dispute to the PCA for arbitration. This advice will be subject to review from time-to-time as appropriate.

In summary, the PCA’s view is that a TPT has four months and 21 days from when a dispute arises to refer the non-MRO dispute to the PCA for arbitration.

2. Referring a dispute for arbitration

A TPT may refer a dispute for arbitration if it relates to an allegation that the POB has failed to comply with the Pubs Code ^{[footnote 2]}. There are strict deadlines connected with rights under the Pubs Code and for making arbitration referrals.

3. Giving notice to the POB

Before a TPT can make a referral to the PCA, they must notify the POB that they think the POB has breached the Pubs Code. This notice is important because the POB is expected to try to resolve the issue. The parties should do all they can to remove the need for the dispute to be referred for arbitration. If the dispute has not been resolved after 21 days beginning with the day the TPT gives notice to the POB, then the TPT may make an arbitration referral to the PCA ^{[footnote 3]}.

4. Referral period

In all cases, the TPT may not refer a dispute any later than four months beginning with the first date when the dispute could have been referred. In the PCA’s view, the first date when the dispute could have been referred would be after 21 days beginning with the date the dispute arose. This is because notice of the dispute could have been provided to the POB on the same day that the dispute arose. The deadline for referring the dispute is therefore, in the view of the PCA, four months plus 21 days beginning with the date the dispute arose.

5. The dispute

The date on which the dispute arises will depend on the circumstances of each case. The PCA would expect the dispute to most usually arise at the time that the alleged breach of the Pubs Code occurred.

Example

A TPT thinks that their POB has sent them a Rent Assessment Proposal (RAP) which does not comply with the Pubs Code. The POB provided the RAP to the TPT on 1 July.

The TPT must tell the POB that they think the RAP is not compliant and then give the POB 21 days to resolve the issue before the TPT can refer the dispute to the PCA. The earliest date on which the TPT could give notice to the POB is 1 July and so the earliest they could make a referral is 22 July.

The TPT has four months to make a referral beginning with the first day on which they could have made that referral - so the TPT would have up to and including 21 November to make a referral to the PCA.

It should be noted that the PCA’s view as set out in this advice note is not binding on an arbitrator appointed to determine a Pubs Code dispute or on the Courts, and that only the Courts of England and Wales have jurisdiction to reach a binding interpretation of the Pubs Code. Nothing in this advice note should be relied upon as legal advice or is a substitute for a party (or prospective party) to an arbitration taking independent legal advice on their own individual circumstances.

6. Notes

1. This advice note addresses the position for referrals made under section 48 of the Small Business, Enterprise and Employment Act 2015 (2015 Act). ↩

2. Section 48 of the 2015 Act. ↩

3. Section 49(2) of the 2015 Act provides that a tenant cannot refer a dispute until they have given notice to the POB alleging non-compliance, and waited 21 days, beginning with the date on which the tenant gave notice. ↩