Ei appeals pubs code adjudicator decision at High Court

In relation to the appeal, a spokesman for Ei Group said: “We believe it is in the interests of all parties that there is certainty.”

The Morning Advertiser​ believes the case is based on the clarification of whether market-rent-only (MRO) option tenancies should be a deed of variation (DoV) or a brand new lease.

On the appeal, a spokesman for the PCA said: “The PCA is aware of an appeal against an award. The PCA as the statutory regulator has requested to become a party.”

Chair of the British Pub Confederation, Greg Mulholland, said he is worried tenants now face having their legal right to the market-rent-only option "thwarted due to even more delays" due to this legal case.

"It was always the intention of Government and Parliament when bringing in legislation to give tenants the right to an independently assessed market rent and to opt to pay that amount to their pubco and be free of tie, with all other terms remaining constant, so the MRO option must be allowed via deed of variation," he said. 

Significant barrier

At the end of August 2017, the PCA issued a report that said pubcos were blocking tied tenants' access​ to MRO and "going against the spirit of the pub code".

The report said the most "significant barrier" stopping tenants from exercising their MRO option was the "insistence" by pub-owning businesses (POBs) that a brand new tenancy agreement was required rather than a deed of variation.

The report explained that costly terms can be inserted into a new agreement, but DoVs mean tenants can be released from tie, fully and partially, without changing the other terms, making DoVs the preferred option for tenants.

However, POBs' preference for new tenancy agreements over DoVs is "corroborated by the POBs'" own benchmarking data, the report continued.

And while British Beer & Pub Association chief executive Brigid Simmonds refuted the allegations in the report​ at the time, stating said all pubcos were determined to make the legislation work, she agreed it was "crucial" this area was resolved.