Guidance

Regulating Compliance with the Pubs Code

Updated 25 March 2024

Applies to England and Wales

Regulating Compliance with the Pubs Code

The Pubs Code Adjudicator (PCA) requires regulated pub companies to self-report any failure to comply with the Pubs Code (referred to as ‘a breach’). The PCA may also become aware of a suspected breach of the Code through information that tied tenants and others provide.

The PCA has adopted a modern regulatory approach which reflects the principles of the Regulators’ Code. Where there is a reasonable suspicion that a pub company has breached the Code, the PCA has legal powers to investigate with enforcement measures ranging from recommendations to imposing financial penalties on a pub company. The PCA will also work collaboratively with pub companies to respond to Code compliance issues, where appropriate.

In considering when and how to exercise regulatory powers, the PCA will take a targeted and proportionate approach, and must take account of PCA published guidance. More information about the PCA’s powers, tools, and use of intelligence (including the self-reporting of breaches) can be found here.

1. PCA response to Code breaches

Where there is a suspected or admitted breach of the Code, the PCA will consider what, if any, further information or action is required to:

• prevent repetition of the breach

• identify any actual or potential detriment to tenants

• remedy any detriment to tenants to, as far as reasonably possible, put the tenant in the position they would have been in had the breach not occurred

In deciding on its regulatory approach, the PCA may consider a number of factors, including (but not limited to) the following:

a) Severity of the breach

b) Whether the breach was a one-off occurrence or part of a pattern of breaches and behaviour

c) Whether the pub company proactively identified the breach, and if so, whether it reported the breach to the PCA in a timely manner

d) On identifying the breach or becoming aware of it, whether the pub company has:

• been transparent with affected tenants about the breach

• carried out an appropriate internal investigation and identified the root cause of the breach

• taken, or is proposing to take, appropriate remedial action that will prevent repetition of the breach

• demonstrated that the breach has not caused any detriment to tenants, or that it has taken steps to identify tenants who have suffered detriment

• taken appropriate steps to put tenants, as far as reasonably possible, in the position they would have been in had the breach not occurred.

There may be circumstances where, taking all relevant factors into account, the PCA decides to take no further action. Where this is in relation to a self-reported breach by a pub company, the PCA will confirm this to the pub company in writing. The PCA will always keep such decisions under review taking a risk-based approach. This includes where new information is received that is relevant to the breach, its impact on tenants, or actions taken in response.

Where the PCA considers that further action is necessary, the PCA may take one or more of the following approaches.

2. Regulatory Approaches

2.1 Informal Interaction with the pub company

This approach is more likely where the PCA requires further clarity or information on an admitted breach. This may be to better understand the extent of the breach, whether there is a pattern of behaviour, or the scope of the pub company’s internal investigation and proposed remedial action.

No further action may be appropriate after considering all relevant factors. Alternatively, the PCA may decide to take further steps, including, but not limited to, those outlined below.

2.2 Supervised inquiry

This is a more structured intervention where the PCA oversees the pub company’s inquiry into an admitted or suspected breach. Where the PCA offers this approach, it is voluntary for the pub company and the detail, scope and expectations will be discussed beforehand.

This approach is designed to ensure the PCA has the full facts to establish whether a breach has occurred and the impact on tenants to decide on appropriate outcomes. The PCA will consider engaging in such an inquiry where it is proportionate to do so, and in the interests of tenants, to address a suspected or actual breach of the Code without resorting to a formal investigation. It is more likely to be appropriate where:

• the pub company has admitted a breach of the Code, but the PCA is not satisfied or has insufficient information to conclude that a self-reported breach has been handled in an appropriate manner; or

• it is a more proportionate way of establishing whether a breach of the Code has occurred and / or its impact on tenants.

An inquiry is likely to involve the PCA requesting more detailed information and evidence from the pub company about the circumstances of the admitted or suspected breach, the impact on tenants, and remedial actions identified. This may result in the PCA agreeing with the pub company actions it will take to prevent the breach occurring again and to address any detriment to tenants. The nature of the steps taken will depend on all the circumstances.

The agreed inquiry will be subject to the ongoing and reasonable co-operation of the pub company. The PCA may at any time consider it more appropriate to manage the matter in another way, including formal investigation. The PCA will maintain fairness and transparency when making any necessary adjustments to its regulatory approach.

2.3 Formal investigation

A decision to launch a formal investigation under s.53 of the Small Business, Enterprise and Employment Act 2015 will be taken in accordance with the PCA’s published guidance on investigations and enforcement, which can be found here.