Licensee challenges ‘out of control’ pubs code adjudicator with legal action crowdfund

By Emily Hawkins contact

- Last updated on GMT

Legal action: Gary Murphy hopes to take the pubs code adjudicator to court over big pubcos obfuscating tenants who wish to go free-of-tie
Legal action: Gary Murphy hopes to take the pubs code adjudicator to court over big pubcos obfuscating tenants who wish to go free-of-tie

Related tags: Pca, Mro, Beer tie

A north London licensee has launched a crowdfunding campaign to mount a High Court challenge to pubcos and the pubs code adjudicator over the beer tie.

Gary Murphy, of Ye Olde Mitre Inne, Barnet, also told The Morning Advertiser​ (MA​) he opposed the pub code adjudicator's policy on publishing details of his arbitration award as he disagreed with the underlying legal issues. 

Large pubcos have been allowed to heave their financial power as the adjudicator has not effectively controlled them, the licensee said.

Murphy’s campaign ​aims to raise £10,000, although he estimates such legal action could cost up to £100,000.

“This is a real life David and Goliath [story], of publicans trodden on for decades to make corporate businesses massive profits, a restricted beer market and communities ruined by losing their pubs,” he explains on the crowdfunder.

The opposition comes as the first arbitrations have been made public by the adjudicator​, in relation to both market-rent-only (MRO) option and non-MRO​ issues.

“The [office of the] PCA is out of control and the Government needs to act immediately to check that what they are doing is lawful,” Murphy said.

A spokesperson for the pubs code adjudicator said it was unable to comment upon any litigation that might be contemplated by any interested parties.

They said: "The PCA published an advice note in July 2017 relating to tied rent contractual dispute resolution clauses, and constantly considers what wider clarification may be required in relation to this and other issues, in order to aid industry understanding.

"It is for the reasons of wider public understanding that the PCA is proceeding with the  publication of arbitration awards, which the PCA considers to be in the public interest, and the interests of the industry as a whole."

Confidentiality

Murphy had asked the PCA not to publish details of his arbitration award even if he is anonymised.

However, the PCA informed him they may overrule this wish. The PCA’s policy appeared to be a new principle which has not received consultation, he claimed.

The policy states: “Where the tied pub tenant does not consent to the publication of the award, the PCA may decide to publish this in a redacted form, so that it does not include information that identifies the tied pub tenant or their business, or that which the PCA considers to be commercially sensitive."

Regulation 28

Murphy said he does not want his award to be published as he believes the PCA misinterpreted the pubs code in its issuing, which is an impetus for his desire to seek legal action.

According to the licensee, the process means pubcos benefit from elongating the process as long as they can as cheaper MRO rents are only introduced from the date an agreement is signed.

He believes a correct interpretation of Regulation 28 on rent recovery would leave rent backdating open to negotiation.

“A tied arbitration does not deliver this and is an obstructive tactic to put tenants off applying for MRO,” he told the MA​.

Tenants are put off applying for MRO as they fear expensive arbitrations to calculate backdated rent, he said.

'Level the playing field'

A spokesperson for the pubs code adjudicator said the adjudicator cannot respond to inquiries on individual cases.

They added: “However, the PCA and deputy PCA have clearly stated their intention of publishing arbitration awards in order to level the playing field for tied pub tenants in negotiations with pub-owning businesses and plan to publish the first set of awards shortly."

Pubcos regulated by the pubs code started publishing monthly data​ on the numbers of market rent only (MRO) notices issued, conversion rates into MRO agreements and other trends, last year.

Murphy has raised close to £5,000 at the time of writing.

"The Government has shamelessly sided with pub chains and should simply be doing more to support our heritage," one supporter said. 

Another commented: "It’s about time someone tried to take down this duplicitous charade."

Related topics: Legislation

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