CAMRA laid out its argument for a Government review in its submission to the Business, Energy & Industrial Strategy (BEIS) Committee ahead of the committee’s evidence session with the pubs code adjudicator on Tuesday 26 June.
“Key to the failure of the code to provide fairness is that while the pubs code adjudicator’s (PCA's) office struggles to provide clarity on key aspects of the relationship, some pub owning businesses (POBs) have continued to act as if the code had simply never existed; and typical complaints in everyday business practice have continued unabated,” CAMRA’s submission read.
“It is also of concern that POBs are challenging some decisions made by the PCA through the courts in a manner that breaches Chartered Institute of Arbitrators (CIArb) rules, using their disproportionate legal powers to overrule the code in a manner that is intimidating and removes the code’s protection from the tied pub tenant (TPT).”
'Clarity and increased fairness'
In contrast, a number of pubcos have said the code is providing clarity and increasing fairness in their written submissions to BEIS.
Ei Group said: “Pubs code is providing clarity and increasing fairness across the industry”, while Greene King said the code had “increased transparency and improved communications.
But both pubcos highlighted issues with the way the code works with Ei recommending that the period for tied tenant to challenge the terms of an MRO-compliant agreement should be extended from 14 days to “enable both parties to engage and seek to resolve differences rather than resorting to costly and time-consuming arbitration proceedings”.
Ei also urged the PCA to consult on guidance which will set out the “golden threads” of common themes and conclusions that have come out of MRO arbitrations by the PCA and Deputy PCA.
Greene King also criticised the code for specifying “quite tight timescales for steps to be taken”, while there is “no ability for the parties to extend these deadlines by agreement between themselves”. It said: “A review of the various timescales in the code would be welcomed, for example the 14-day window for tenants to refer issues regarding the MRO lease to the PCA does not allow adequate time for negotiation – increasing the PCA workload and causing the tenant to pay an unnecessary fee.”
However, while Greene King said it supported the greater clarity on MRO, it said: “We do not consider that waiving confidentiality or the publication of the Advice Note (on 2 March 2018) are appropriate means of delivering this. We are unable to comment on these issues further because the Advice Note is the subject of a judicial review by both Greene King and Ei Group.”
'confusion, cost and complexity'
In its submission, Star Pubs & Bars wrote that the code shouldn’t be judged on the number of market rent only agreements, however, it also said: “While we see positive aspects to the code we are concerned that the PCA is creating confusion, cost and complexity for all parties with its incorrect interpretation of key elements of the code.”
Star said: “Rather than providing the necessary certainty for licensees and pub companies by accrediting standard MRO agreements as compliant, the PCA is choosing to take a subjective view of what is reasonable for the individual pub and licensee including their personal circumstances and the terms of their existing tied lease.
“That means standard MRO terms can be compliant in one pub but not another. This creates confusion and conflict. Fundamentally, we do not believe that the issue lies with the code itself but rather its interpretation by the PCA.”
All 36 written evidence submissions are available on the committee’s website.