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Pubs Code Adjudicator Conflicts of Interest Policy and Process

Updated 16 January 2024

Applies to England and Wales

1. Introduction

1.The Pubs Code Adjudicator’s role is to enforce the Pubs Code. In doing so the Adjudicator has various powers and functions, including to resolve, or appoint another person to resolve, individual disputes through arbitration in relation to breaches of the Pubs Code etc Regulations 2016 (‘the Code’) and to investigate a suspicion of breaches of the Code. This guidance reflects the activities and work carried out in support of these statutory powers and functions.

Not all outside interests will preclude participation in a particular activity, arbitration or investigation. The Adjudicator and Compliance Officer will look at all potential conflicts of interests and ensure that no conflict arises from either the dual role of the Adjudicator as arbitrator and regulator or otherwise in the performance of the Adjudicator’s statutory functions. The Adjudicator is the decision maker in the key activities of arbitrations and investigations, and therefore the emphasis of this guidance concerns the Adjudicator.

2.This note explains how conflicts of interest will be handled by the office of the Pubs Code Adjudicator (the PCA office) to ensure that no conflict arises, or could reasonably be perceived to arise, between the official position of the Pubs Code Adjudicator and private interests, financial or otherwise arising from outside interests. Reference to the PCA applies to any Deputy or Acting PCA in post. This note also explains how the PCA team and external advisers’ conflicts of interest will be handled.

3.The policy note complies with the obligation placed on the Adjudicator under paragraph 10(1) – (3) of Part 1 of Schedule 1 to the Small Business, Enterprise and Employment Act 2015.

4.The Adjudicator and PCA team will behave in accordance with the Seven Principles of Public Life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership (see Annex A for full details). The approach to dealing with the outside interests of the Adjudicator and PCA team is founded on these principles.

5.The Adjudicator and PCA team will prevent conflicts of interest by disclosing potentially relevant outside interests for inclusion in the PCA register of interests. A template of the register is contained in Annex B below. Details from the register will inform decisions about how to handle any conflicts or potential conflicts. The principle ‘if in doubt, disclose’ is applied. A Compliance Officer, the PCA Director, is responsible for ensuring the register is reviewed to remain current.

6.The procedure applies to the Adjudicator and all other members of the PCA team and any external advisers. Each case will be considered proportionately and on its merits having regard to the particular circumstances.

2. Conflicts of interest

7.A conflict may arise whenever an outside interest might influence, or be perceived to be reasonably capable of influencing, a person’s judgement. Some outside interests will create a clear conflict. Others will not do so but may nonetheless prompt action on a prudential basis.

8.The most common ways in which impartiality can be put at risk can be categorised under 4 headings:

• financial interests;
• organisational relationships;
• personal relationships; and
• prejudgement.

9.Potential conflicts may be identified at the outset of an activity, arbitration or investigation; others may only become apparent as the work develops, and circumstances change (e.g. because of the involvement of a new party, or a change in the personal circumstances of the Adjudicator). If any doubts arise as to the propriety of an outside interest, or as to the compatibility of a relationship with the Adjudicator or member of the PCA team, the Compliance Officer should be informed of all relevant facts and appropriate advice given.

3. Role of the Compliance Officer in PCA operations

10.A Compliance Officer, the PCA Director within the PCA office, is responsible for ensuring that this policy on conflicts of interest is applied and enforced on a day-to-day basis. If a member of the PCA team is in any doubt about the significance of an outside interest at any time, he or she may consult the Compliance Officer, who will advise on appropriate action.

11.The Compliance Officer is responsible for advising and reviewing the consequences for the PCA office arising from any disclosure. The Compliance Officer will consider and advise on all necessary steps to ensure that no ‘apparent’ bias – the perception of bias – exists in order to mitigate a basis for a challenge to a decision of the Adjudicator on the grounds of bias.

The test for apparent bias the courts apply is ‘whether the fair-minded observer, having considered the facts, would conclude that there was a real possibility’ of bias. The Compliance Officer will apply this test to ensure that an undue concern for appearances is not allowed to interfere unnecessarily with the functioning of the PCA office. The Compliance Officer may advise that in some cases an outside interest is sufficiently minor that it warrants no action at all. In some circumstances it may be that the Compliance Officer advises that an outside interest should be disposed of or severed.

12.In this guidance an outside interest that normally requires some prudential action on it, such as advising on the participation of the Adjudicator or member of the PCA team in an investigation or disclosing the interest to a person affected by an investigation, is described as a ‘notifiable interest’.

4. Handling interests of the Adjudicator

4.1 Arbitrations

13.Acting as arbitrator is a personal appointment. It is for the Adjudicator to consider whether any conflict of interest might arise in each case. Where the Adjudicator considers that there is a notifiable interest, the details should be disclosed to the parties and their comments invited before considering whether a potential conflict of interest arises that may warrant further action. Where representations are received the Adjudicator should inform the Compliance Officer and seek advice in relation to any further action.

14.In the case of an arbitration where a potential conflict of interest may occur, the Adjudicator may appoint another person to arbitrate the dispute. This person will be bound by this policy and expected to provide a declaration of interests in advance of commencing the arbitration.

4.2 Other functions

15.When undertaking functions other than arbitrations, the Adjudicator should inform the Compliance Officer of any notifiable interests at the outset of the activity or as soon as possible after the interest arises. The Compliance Officer should advise on any appropriate action according to the particular circumstances which have given rise to disclosure. The Adjudicator must consider that advice in determining appropriate action.

16.The risk of potential conflicts as a result of the Adjudicator’s wider interests will be assessed against the following criteria:

• financial interests;
• organisational relationships;
• personal relationships; and
• prejudgement.

17.Where the Adjudicator (or a person with whom they have a personal relationship referred to in paragraph 29 below) has a financial relationship with or interest in (‘a financial interest’ in) a person^{[footnote 1]} whose interests may be affected by a possible decision by the Adjudicator, resolution will depend on the type of activity undertaken.

18.Such persons may include companies which are the subject of an investigation as a well as companies which are likely to take a significant part in arbitration proceedings before the PCA.

19.Financial interests will generally arise from ownership of assets (or other investments or sources of income) such as shares (whether bearing a right to vote or not), stock or debentures and options and similar rights. However, they may also arise from liabilities to a person.

20.Where a financial interest belongs to a person with whom the Adjudicator or has a personal relationship identified below, the Compliance Officer when consulted, will have regard to the nature of the personal relationship, in advising whether the interest is a notifiable interest, and, if it is, advice on appropriate action.

21.Where assets are held by discretionary managers or in a trust, a prudential approach will be adopted in deciding whether the assets should be treated as a notifiable interest. Relevant matters may include the duties to which a trustee or manager is subject and the degree of knowledge a person has or may acquire of the particular assets held by a trust or manager.

22.Where assets are held by the Adjudicator as trustee for or otherwise on behalf of another person, these will normally be treated as if they were assets of the Adjudicator respectively.

4.3 Interests which are unlikely to cause concerns

23.The following will not normally be considered as giving rise to a notifiable interest:

• assets whose value is too low to be material;
• goods and/or services bought on the open market on normal commercial terms available to other buyers (e.g. banking or insurance services, telephone services, travel, accommodation, meals, drinks and tangible assets purchased on normal terms on the open market); and
• assets held on collective investment schemes^{[footnote 2]} where the investor has no control over individual investment decisions and has no ownership of the underlying investments.

4.4 Organisational relationships

24.Organisational relationships between the Adjudicator and organisations which are or may be affected by the work of the PCA are normally regarded as a notifiable interest. The most likely such relationships are:

• directorships or equivalent positions with high-level responsibility for governance and performance;
• elected positions in government at local or national levels:
• senior paid or unpaid roles with charities and not-for-profit organisations; and
• consultancy or advisory roles, whether remunerated or not.

25.The provision of advisory or other services potentially relevant to the activities of the PCA will normally be considered a notifiable interest.

26.Ordinary membership of charities or not-for-profit organisations where no role in governance or management is undertaken will not normally considered a notifiable interest (although some activities, such as lobbying on matters of national interest or debate relevant to an activity, arbitration or investigation, may raise concerns).

27.The significance of organisational relationships diminishes over time. In the absence of complicating factors, persons who were formerly partners or directors in firms providing professional services to any party to an activity, arbitration or investigation are not considered to have a notifiable interest if two years have elapsed since they left the firm, provided that they have no continuing financial interest in or relationship with the firm.

4.5 Personal relationship

28.Personal relationships may be notifiable interests where there is a real risk that they will affect an individual’s judgement. Close relationships, such as with spouses, civil or cohabiting partners, and minor children, are normally regarded as giving rise to the possibility of a notifiable interest. However, other relationships may also do so: for example, those with adult children (particularly those living at home or financially dependent); and those with close friends or individuals where there is a close financial link.

The fact that the PCA and/or members of the PCA team may socialise in pubs in their personal capacity is not a notifiable interest. However, consideration will be given on a case by case basis as to whether such matters give rise to a notifiable interest in the particular circumstances in the exercise of a particular activity or function.

4.6 Prejudgement

29.The Adjudicator will approach decision-taking with an open mind. The ability to consider a particular case might be compromised or might appear to be compromised, for example, if the Adjudicator had written an article or made a speech expressing strong views about a particular issue or case.

30.The Compliance Officer will consider any evidence of prejudgement that would give rise to a reasonable concern on the part of an informed observer as to the Adjudicator’s impartiality and independence on a case by case basis and advise the Adjudicator accordingly. However, prejudgement will not lightly be inferred. The important question is not whether the Adjudicator may have an initial view on a particular issue, but whether the Adjudicator will bring an open mind to bear in any activity. In those cases where the Compliance Officer has a concern these should be discussed with the Adjudicator and advice given on appropriate action.

5. Handling PCA team interests

31.This policy also applies to the PCA team.

32.The PCA Compliance Officer will consider the risk of conflicts arising from the notifiable interests of the PCA team involved in relation to an activity, arbitration (when called upon) or investigation. When the notifiable interests of the PCA team are being considered, their role, and in particular the degree of influence they could exert on an activity, arbitration or investigation, will be relevant factors in determining what action, if any, should be taken. Their roles are varied; while some may enable them to influence the thinking and decisions of the Adjudicator, others – for example, those working within administrative support teams, acting in a purely supervisory capacity or just providing services – do not give them such influence.

33.The PCA team will also have regard to the risk of conflicts of interest arising when conducting procurement exercises on behalf of the PCA, and when considering external employment, appointments or consultancy work. The need to consider the risk of conflicts arising is one of the reasons why the PCA requires civil servants who are members of the team to disclose the nature of any external work and obtain prior consent from the Compliance Officer to external employment, appointments or consultancy work with organisations involved in the sector. The office will require this of any future members of the team who are not civil servants. Where the conflict arises in relation to the Compliance Officer, consideration of its handling will be passed to the Adjudicator and the sponsor department informed as may be appropriate.

6. Interests of advisers, consultants and contractors

34.During the course of an activity, arbitration or investigation, the PCA may instruct consultants and other external advisers to assist with aspects of its work. The roles played by consultants, advisers and contractors may vary considerably, and the appropriate approach to their outside interests will be determined according to their role. However, where consultants act as the equivalent to the PCA team, their outside interests will be disclosed and assessed as if they were members of the PCA team.

35.Where the PCA is considering whether to instruct a consulting firm to advise it on a particular issue, the PCA will take account of the interests of both the staff of the consulting firm and of the firm itself. In considering the interests of the firm, the PCA will take account of all relevant matters, which may include:

• the present and future clients of the firm (in so far as they can be ascertained),
• the nature of the work for those clients, and
• the extent to which the firm is independent of parties which may be affected by the work of the PCA;
• the degree to which the staff of the firm engaged on behalf of the PCA are protected from improper influence (for example, being ring-fenced from other staff of the firm);
• any professional conduct rules which apply to the firm and its staff; the record of the consulting firm in providing impartial advice to the PCA; and
• the nature of the project to be undertaken; its importance in the deliberations of the PCA.

7. Appointment of an Independent Assessor

36.Any Independent Assessor appointed by the PCA under reg 36(4)(a) of the Code is required to act in accordance with the PCA guidance issued pursuant to reg 37(4)(b).

8. Notification of conflicts of interest and handling

37.If the Adjudicator, member of the PCA team or external consultant or adviser consider they may have an interest which could put them into conflict, it must be disclosed to the Compliance Officer as soon as possible for consideration as to what, if any, action should be taken. A template is enclosed at Annex C below.

9. Final compliance steps

38.The role of the Compliance Officer is to ensure this policy is appropriately applied. If, following advice on notifiable interests, a concern remains over the management of that interest, the PCA office may consider whether to terminate a secondment, appointment of consultant or external adviser in respect of whom the interest relates.

39.The Adjudicator is a public appointee appointed by the Secretary of State. Where the Compliance Officer has concerns over the actions of the Adjudicator in managing a notifiable interest in respect of its impact on the PCA office, the Compliance Officer should consider the appropriate course of action with the PCA sponsor Department to manage the situation.

10. Membership of professional bodies

40.Where the appointed Adjudicator, member of the PCA team or external consultant or adviser is a member of a professional body which has its own conflicts of interest policy, it is accepted that the individual will retain an obligation to uphold such standards while fulfilling the role to which the professional standards apply. In the case of the Adjudicator the overriding policy will be that governing the public appointment and the policy of the public body to which that appointment has been made.

11. Public records

11.1 The register of interests

41.The Register of Interests is a public document recording the organisational interests of all members. It is updated from time to time and reviewed annually. The PCA register of interests is published on the PCA website. A template is included at Annex B.

11.2 Audit

42.The PCA carries out an annual audit of the conduct of the PCA’s conflicts of interest policies and a report is published in its Annual Report.

12. Annex A: The Nolan Principles

12.1 The Nolan Principles of Conduct Underpinning Public Life

Selflessness

Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or other friends.

Integrity

Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

Objectivity

In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

Accountability

Holders of public office are accountable for their decisions and actions to the public and must submit to whatever scrutiny is appropriate to their office.

Openness

Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

Honesty

Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Leadership

Holders of public office should promote and support these principles by leadership and example.

13. Annex B: Register of Interests template

Position held Organisation	Type of Interest	Start date	Expire date	Explanatory note

14. Annex C: Declaration of Interests Form

Name of person making this declaration
Position

Nature of declaration (Summary of any information that provides additional context to the declaration)
The potential conflict and the parties involved (Describe why there may be a conflict and name the individuals or organisations involved)
Likely duration of conflict (Explain if this could be an ongoing conflict or specific to a particular activity, arbitration or investigation)
I have read and understand the Pub Code Adjudicator Conflicts of interest Policy. I declare to the best of my knowledge that the information given within this form is correct.
Signature of person making this declaration
Date
Managing the potential conflict (The Compliance Manager to provide details of how the potential conflict will be managed)
Signature of Compliance Manager
Date

1. See s 48(5) of the Small Business, Enterprise and Employment Act 2015; reg 58(2) of the Pubs Code etc. Regulations 2016 ↩

2. For example, unit trusts, investment trusts, unit linked policies, pension schemes, or stocks and shares ISAs. ↩