Paul Newby

"You can't win, can you?": Pubs Code Adjudicator grilled about conflict of interest

10-May-2016 - Last updated on 11-May-2016 at 08:41 GMT

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The Pubs Code Adjudicator was grilled about his ability to be impartial in his new role at a Business, Innovation and Skills select committee yesterday (May 10).

Paul Newby has come under scrutiny for his former role as director of Fleurets - where he worked as a chartered surveyor acting for pubcos and their tenants - and yesterday attempted to allay fears of tenant groups.

MPs questioned how effective Newby would be in his role if tenants believed he had a conflict of interest.

MP for Hartlepool, Iain Wright, said: “Perceptions are really important, you have to be seen as impartial. You can’t win, can you? Whatever you do your decision will be questioned."

Conflict of interes

But Newby said a specific set of procedures would be established to avoid any conflict of interest problems.

“Perception of conflict of interest is something I need to address. One of my duties will be to put in place a conflict of interest policy, ” he said.

“If I have acted with them [a pubco or tenant] in a case I would expect that to be an example of a conflict.”

Newby also supported his integrity with support he has gained from the Association of Licensed Multiple Retailers and the British Institute of Inkeeping.

Fairness

“With regards to fairness - I’m not sitting in some all-powerful role,” he continued.

“Two people would come down on me like a tonne of bricks – the secretary of state and the Royal Institute of Chartered Surveyors.

“It will be implemented responsibly with duty to the secretary of state. It’s my personal duty as a chartered surveyor.

“It’s paramount that fairness and transparency goes through the whole thing.”

Background

Newby explained that when he left Fleurets, he had 67 activities which he needed to complete or hand over.

He said of those 67 activities, six involved big pub companies and seven involved tenants.

The panel asked what percentage of turnover at Fleurets came from large pubcos, and Newby estimated approximately 20-23%.

Newby was then asked if he still had any invested interests in Fleurets, such as shares, which could be considered to create a conflict of interest.

He explained that seven years ago the company completed a financial rearrangement and he supplied the business with a long term loan, and is still receiving repayments, but claimed this would not influence his role as adjudicator.

But there were lingering concerns about tenants' perceptions of the links with his former company.

Opposition

The British Pub Confederation has refused to meet with Newby due to their concerns about his role at Fleurets, and the group has considered calling for a judicial review of the appointment.

But Newby called out to stakeholders to meet with him.

“I’m so keen to meet all the stake holders because I want to hear what they have to say. If there are unfair practices I want to know,” he said.

“I’ve thrown my previous hat away and have a new hat with new responsibilities."

Newby said he aimed to bring about ‘behavioural change, to make the market work better’.

Pubs code

The panel asked Newby about his perceptions of the strength of the code, and whether clauses allowing tenants to waive their right to MRO could lead to blackmailing.

“There has undoubtedly been a dysfunctional relationship that has left us where we are now, an imbalance, and the pubs code is here to address that,” the adjudicator continued.

“There’s a problem with a lack of consistency. I want to address the inconsistencies and make a level playing field.

“Aspects of what some companies are doing, I have seen it for myself, some things need to be much better.

Disputes

“It can be horrible for tenants to go through dealing with big companies. We recognise that a lot of people don’t have huge wallets or a lot of income. This is about making the market work better and more fairly.”

Newby was asked if he witnessed any unfair practices in his time working for the pubcos.

He said he had witness bullying tactics and selective use for information between big landlords and tenants.

A dysfunctional relationship can lead to a ‘spiral of decline’, according to the new adjudicator, but he argued the code goes a long way to address issues about rent disputes, systematic abuses and unfair market practices.

Guidance

When the code comes into force there will be a helpline available for guidance, and Newby is working on a ‘sign posting’ flow chart, which will be available online, to explain the code to tenants and pubcos in the simplest terms possible.

The website should break the code down into ‘understandable steps’ with regards to MRO. But he could not give a deadline as to when the guidance will be active.

“The large pub companies are well organised, but the individual tenants need plain language and guidance. There are 12,000 or so tenants and a substantial number don’t have knowledge of what the code means to them,” he said.

Newby admitted the current version of the flow chart is “almost unintelligible” to the everyday tenant, and needs much work before it can be published.

'All-round view'

Newby stressed his background of working with both sides of disputes.

“I’ve had a lot of work with landlords and tenants, particularly in rent reviews,” he said.

“I have an all-round view of the pub market. I genuinely believe I have seen it from all angles. I felt that was part of the reason to apply for the job, because of my experience.”