Guidance

Regulatory Powers, Tools, and Intelligence

Updated 25 March 2024

Applies to England and Wales

Regulatory Powers, Tools, and Intelligence

The Pubs Code Adjudicator (PCA) uses a range of legal powers and tools to make sure regulated pub companies comply with the Pubs Code. The PCA also works collaboratively with pub companies and others to address compliance issues and promote best practice.

The PCA’s work is wide-ranging. It includes raising awareness of tied tenants’ Code rights through channels such as social media and industry events and publications. The PCA also gathers information about how the Code is working in practice through research, surveys, and engagement.

The following explains the PCA’s legal powers, the duties on pub companies to monitor and report their own compliance, and the PCA’s use of intelligence to understand compliance issues.

1. PCA legal powers

The PCA’s legal powers include to:

• issue Advice and Guidance

• investigate suspected breaches of the Code

• report to the Secretary of State if a pub company has an unfair business practice that is designed to avoid the Pubs Code and is detrimental to tied tenants.

The PCA can also do anything appropriate to help carry out their functions.

1.1 Issue Advice and Guidance

The PCA may give advice on any matter relating to the Pubs Code to tied tenants and regulated pub companies, and any organisations who represent their interests.

Advice may be issued where, for example, the PCA wishes to clarify their view to help the industry understand how they may approach a particular matter.

The PCA may also publish guidance about:

• applying the Pubs Code

• steps pub companies need to take to comply with the Code

• practices and procedures the PCA intends to adopt in carrying out its functions

• any other matter relating to the Code.

The PCA is required by law to consult with anyone they consider appropriate before publishing guidance, The PCA must also take published guidance into account in carrying out their functions. This includes in investigating Code breaches and taking enforcement action as a result. The PCA (and any appointed arbitrator) must also take it into account when arbitrating Code disputes.

Pub companies must always comply with the Pubs Code. Statutory guidance does not change the law. In order to ensure clarity and consistency of approach, pub companies should follow the guidance unless they have, and can demonstrate on evidence, a very good reason not to. Where guidance was not followed, the PCA would expect the pub company to justify and evidence why that was appropriate in the circumstances and how the approach taken was Code-compliant. Where appropriate, guidance will make clear where there are steps that pub companies need to take in order to comply with the Pubs Code.

1.2 Investigate suspected breaches of the Pubs Code

The PCA may investigate where they suspect that a pub company has not complied with the Pubs Code. As a result of an investigation, the PCA can impose a fine, require information to be published and / or make recommendations (and investigate if the pub company fails to follow a recommendation).

More information about the PCA’s approach to breaches of the Pubs Code can be found here.

1.3 Report an unfair business practice designed to avoid the Pubs Code

The PCA must make a report to the Secretary of State if in the PCA’s opinion, the pub company is engaging in an unfair business practice that is designed to avoid the Code. The PCA does not have legal powers to require the pub company to provide evidence to establish whether a report is necessary.

More information can be found in the PCA’s factsheet on Code avoidance here.

2. Pub company compliance monitoring and reporting

The Pubs Code places legal duties on pub companies to verify and demonstrate their compliance through appointing a compliance officer and annual reporting. The PCA also requires pub companies to self-report any breaches of the Pubs Code.

2.1 Code Compliance Officer

The Pubs Code requires pub companies to appoint a Code Compliance Officer (CCO). This is an employee of the pub company whose job it is to verify their pub company’s compliance with the Code. The PCA has an important relationship with the CCO, and they are the point of contact for the PCA and tied tenants.

The pub company has legal duties under the Code, which make sure the CCO can act independently within the pub company to police Code compliance and interact with the PCA and tied tenants effectively.

More information about the CCO role can be found here.

2.2 Annual Compliance Report

The Pubs Code requires pub companies to submit an Annual Compliance Report to the PCA for the period ending March in each year. The CCO is responsible for making sure this happens.

The Annual Compliance Report must confirm any breaches reported to the PCA throughout the year through the self-reporting procedure and should not be the first notification of a breach. The report also includes other relevant information about the pub company’s tied estate and rights exercised by tenants under the Code. Annual Compliance Reports are published on the pub companies’ websites.

2.3 Self-Reporting Breaches

If the CCO identifies that their pub company has breached the Pubs Code, the PCA expects to be notified as soon as possible. The CCO must complete a standard form to provide the PCA with information about the breach (called a self-report).

The self-report ensures the PCA is made aware of the pub company’s understanding of the breach, how it happened and the impact on tenants. The pub company must also let the PCA know what action it is taking to prevent it happening again and to put matters right for tenants. This should include the steps it has taken or intends to take to tell tenants about the breach, and how they can find out further information if they have been affected.

Self-reporting breaches helps the PCA to trust that a pub company can effectively monitor Code compliance and take appropriate and timely action in response to breaches. The PCA may consider this when deciding what, if any, further regulatory action is needed.

The PCA office publishes a register of self-reported breaches on its website to share information with the industry about how the Code is working and how breaches have been dealt with. The register includes a description of the breach and other relevant information, such as action taken in response.

3. Intelligence about Pubs Code compliance

The PCA office receives and gathers a wide range of information, which is used to decide on the most appropriate measures to regulate compliance with the Pubs Code.

Information may come from a number of sources, including:

• Tenants and others who contact the PCA office

• Industry events and stakeholder meetings

• Annual Tenant Surveys

• Surveys from tenants who have been through the Market Rent Only process

• Other targeted research into the tenant experience

• Self-reported breaches from pub companies

• Pub company Annual Compliance Reports

• Arbitrations

3.1 Information sent to the PCA

The PCA welcomes information from tenants and others about how pub companies are complying with the Pubs Code. This information helps the PCA to build a picture of pub company behaviour and decide what action they need to take as the regulator.

When considering information, the PCA office may ask for supporting evidence, such as notes of conversations with the business development manager which the tenant must be given under the Code, and any letters or emails. The PCA cannot always tell individuals what they are doing with information received, as it may hinder action the PCA is taking, or may take in the future. Where possible, the PCA office publishes information about regulatory action on its website.

3.2 Complaints and disputes

If a tied tenant believes the pub company has not complied with the Pubs Code and they have suffered as a result, they may contact the pub company’s Code Compliance Officer to try to resolve this.

The PCA cannot represent individual tenants in complaining to their pub company or in resolving their complaint. Disputes between tenants and pub companies under the Pubs Code that cannot be resolved may be referred to the PCA for arbitration. There are strict time limits for making a referral. More information can be found in the PCA’s factsheets here.

Following a referral, the PCA may appoint an external arbitrator to arbitrate the dispute. If this happens, the PCA requests copies of arbitration awards and other documents to monitor pub company compliance with the Code and conduct in the arbitration.