The paper called The “Code Adjudicator” model: The Pubs Code, statutory arbitration and the tied lease by Jed Meers and Liz Hind, which has been published in Legal Studies, the journal of the Society of Legal Scholars, argues there are a series of limitations with both the function of the Pubs Code Regulations and the code adjudicator model itself.
The paper draws on a database of arbitration decisions, data on the exercise of code rights, interviews with affected tenants and legal analysis of referrals to the High Court.
“We argue the PCA and the operation of the Pubs Code Regulations 2016 suffers from a series of limitations, reflecting both shortfalls in their underpinning regulations and broader issues that arise in the code adjudicator model,” the paper said.
It added: “Delaying tactics, the lack of realisation of Market Rent Only rights and concerns raised about referral windows, suggests that more should be done to reform the arbitration processes and underpinning regulations of the PCA.”
It said that the PCA should identify problems and resolve them, and be able to change future behaviour or systems based on problems its users encounter.
“We argue that the current operation of the PCA and the Pubs Code Regulations 2016 currently fails on both counts, offering lessons for both the design and powers of the PCA and the code adjudicator” model more broadly,” it said.
However, it said that notwithstanding limitations, the “code adjudicator” model had exerted a positive effect on the market and shows promise as a form of regulatory intervention.
Responding to the report Campaign for Real Ale chairman Nik Antona said this evidence shows that the pubs code needs substantial changes to make sure it is “fit for purpose”.
“Tied pub tenants need proper reform of the Pubs Code to make sure that they are property supported as they recover from the impact of the pandemic, rather than subjected to unfair or potentially unlawful treatment,” said Antona.
“Ministers are currently consulting on small changes to the code and must, as this research suggests, make improvements to the arbitration process.
“However, the upcoming second statutory review of the code must make more widespread and meaningful change to make sure the code’s principles of ‘no worse off’ and ‘fair and lawful dealing’ are applied in practice.
The PCA responded to the report: "The PCA notes with interest this latest research into the Pubs Code Adjudicator model, which covers the period from the start of the Code. To gain an insight into how the MRO process is working now, the PCA is currently analysing independent research into tenants’ experiences since April 2019. This will be published shortly."