Scottish Tied Pubs Adjudicator's investigation policy: consultation analysis

Executive summary

The Tied Pubs (Scotland) Act 2021 (the Act) introduced the Scottish Pubs Code (the Code) and the Scottish Pubs Code Adjudicator (the Adjudicator). The Adjudicator’s role is to ensure compliance with the Code, provide arbitration expertise, and resolve disputes between tenants and pub-owning businesses. The Adjudicator has the statutory power to investigate suspected breaches of the Code and impose enforcement measures, including financial penalties, if a breach is confirmed.

The Code is due to be in place by April 2025, and work is now underway to establish the Adjudicator’s investigation policy. As part of that work, the Adjudicator has undertaken a public consultation on the approach to be taken to investigation and enforcement.

The consultation, which ran from 16 October to 27 November 2024, aimed to engage both pub-owning businesses and tenants in considering the Adjudicator’s investigation and enforcement powers regarding compliance with the Code. A total of eight responses were received: four from pub-owning businesses, three from organisations, and one from an individual. The responses to the consultation can be found on the Scottish Government Citizen Space portal^[1].

Going forward, the views expressed will inform the development of the Adjudicator’s investigation policy, and help shape fair practices within the Scottish pubs industry.

This summary presents main findings from the analysis of responses to the consultation.

Investigations (Q1 and Q2)

Half of the total respondents agreed that the proposed criteria for commencing or continuing an investigation and the proposed practices and procedures for investigations provided clarity (in both cases 4 respondents agreed, 2 respondents disagreed, and 2 respondents selected ‘don’t know’).

The formality of the investigation process was considered by several respondents. This process could incur cost and generate delays, and responses from some pub-owning businesses and organisations suggested that investigative action should be considered a last resort, with a more collaborative approach taken initially. Greater clarity could be provided in the approach for less serious breaches of the Code. However, one organisation was concerned with the proposal that, for isolated or inadvertent suspected and/or alleged breaches, the Adjudicator may discuss the matter with the relevant pub-owning business initially.

Other issues raised included ensuring equality of treatment between pub-owning businesses of differing sizes; potential inclusion within the Scottish regulators' strategic code of practice developed under the Regulatory Reform (Scotland) Act 2014; clarity about which stages in investigations factual or legal submissions could be made; and ensuring that conflicts of interest issues are avoided.

Enforcement (Q3a and Q3b)

Most respondents agreed that the provisions regarding whether to use enforcement powers provided clarity (7 respondents agreed; 1 respondent selected ‘don’t know’). The majority of respondents also agreed that the provisions regarding which enforcement powers to use provided clarity (6 respondents agreed and 2 respondents selected ‘don’t know’).

Concerns were expressed by pub-owning businesses about the potential costs related to the investigation and enforcement process, and the threat these posed to the viability of smaller businesses; it was also suggested that financial penalties needed to be sufficient to deter Code breaches.

Financial penalty criteria (Q4)

Views were mixed on whether the proposed approach to financial penalty criteria provided clarity (3 respondents agreed, 3 respondents disagreed, and 2 selected ‘don’t know’).

Pub-owning businesses suggested that the upper limit for financial penalties was disproportionate; however, as this has already been set by regulations, this falls outside the scope of the current consultation.

One organisation also queried whether any or all of the sums raised through financial penalties will be provided to the tenants affected (note that under section 10 of the Act, financial penalties are paid into the Scottish Consolidated Fund).