“I’ve been in various industries over the years which were unregulated and when I was a younger person I was annoyed when government and departments started to poke their nose in and regulate it but when I look back I realise that it was the correct thing to do.” Lord Alan Sugar
‘Self-Regulation‘ is a phrase many know from the epic failure it has been proven to be for both the banking industry & the media. Well, with a lot less publicity & media hype the pub industry has been left with this legal side-step to resolve it’s well recognised problems with PubCo’s behaviour…
This ‘self-regulation’ in pubs takes the form of a body called Pubs Independent Conciliation & Arbitration Service (PICAS) & is the ONLY option available to tied publicans to get some form of redress for PubCo. breaches of their Codes of Practice…
So how is ‘self regulation’ working out for PubCos and their tenants? Below is the press release of the most recent PICAS case, that of Val & Gavin Spencer, Licencees Supporting Licensees (LSL) members.
PICAS complainant decides to waive anonymity to expose the fundamental flaws of the biased, opaque and inadequate self regulatory system for PubCo’s
The latest Pub Independent Conciliation and Arbitration Service (PICAS) case of Val & Gavin Spencer of the Cock at Lavenham, Suffolk, has exposed the fundamental flaws inherent in the so called ‘self regulatory’ system for tied lessees and tenants. Val and Gavin have decided to waive their anonymity to be able to shed light on the woefully inadequate, biased and opaque system established by the PubCo’s in an attempt to stave off a statutory code of practice as proposed by the BIS Select Committee.
Despite being presented as a quasi legal arbitration process, the reality is that PICAS not only fails to meet the general provisions of the 1996 Arbitration Act, it is a divisive smoke screen that ignores basic principles of any fair quasi-legal process and could actually undermine the rule of law by simply side stepping it, but then, being able to press release a ‘ruling’ to suggest action is being taken.
Most licensee organisations rejected self regulation and the self regulatory bodies because they were established to avoid real reform.
Worse still, the self regulatory bodies, PICAS and PIRRS, were established without being able to actually deal with the key overriding concern of successive select committee reports and BIS instructions – to ensure that the tied licensee is not worse of than the free of tie licensee.
Many in the industry regard PICAS as little more than a kangaroo court, set-up by the PubCo’s and their lobbyists, the BBPA (the British Beer & Pub Association) in a way to look at superficial issues and by design avoiding the central issue of the endemic overcharging by the leased PubCo’s.
It is also notable that despite the endemic over-renting and over-charging that is going on in the sector, only 5 cases have been ‘heard’, each one has taken a long time to get to a PICAS hearing, elements of the cases have not been dealt with and all the detail of the decisions made have to be kept secret, so there is not accountability of the process.
PICAS hearings clearly fail on several counts to abide by basic standards and norms that would be expected in any genuine arbitration process and system.
As it stands PICAS would not even conform to the General Provisions of the Arbitration Act. Nor would the process stand any real scrutiny in legal terms. In a Court of law, a reasoned decision or judgment would have been made leaving both parties in full possession of the facts & in clear understanding of the future validity & purpose of The Codes of Practice they, & the industry, rely on. This does not happen in a PICAS case.
With an open mind Val and Gavin approached ‘low cost’ PICAS with their ‘high value’ complaint against Enterprise Inns. However, all through the process, they were dismayed by the lack of clarity, culminating in a feeling of a process weighted against them. The latter was typified by the hearing being held, wholly inappropriately, in Enterprise Inns’ trade association offices, BBPA headquarters, something that Val and Gavin objected to but without success. This was made worse with Enterprise being very obviously ‘at home’, simply using the BBPA offices as their own including going off to receive emails during the hearing whilst the tenants, on the other hand, had to use their smart phones outside on the street.
Four clear & specific complaints, both Code of Practice & Industry Framework Code Breaches, were levelled at Enterprise Inns by Val & Gavin, accepted by the PICAS panel & were in question on the day at the hearing.
Only one complaint has been mentioned in the response from the PICAS panel leaving the Val & Gavin without any clear judgement and no opportunity for closure or to move forward.
The PICAS panel have been asked several times since to give clear guidance on whether the complaints have been upheld or not upheld but have refused to do so. A letter has been received by the Spencers from PICAS, dated 17th July, signed by Bernard Brindley as ‘Independent Chairman of PIRRS’ that provided not one single answer to questions asked of them about the case.
The PICAS panel did find that Enterprise Inns had breached the ‘Spirit’ of the Code of Practice, in relation to concerns over Enterprise’s failure to demonstrate that its communications with The Spencers were to the standards expected when undertaking a rent review.
What interests Val & Gavin, and all who have used or may want to use the scheme, is that the pub owning companies have claimed that their Codes of Practice are legally binding on both parties, and, therefore, have contractual effect. The Codes were apparently designed to balance the risk and reward relationship between the pub-owning companies and their tenants & provide a platform for the survival of BOTH businesses. However, in other more formal proceedings Counsel for Enterprise has told the Court that the code of practice does not have any binding effect in statute.
If the cornerstone of democracy is an independent judiciary then a hearing by tribunal funded by one side of the argument and effectively in their own offices is unlikely to be that cornerstone for the pub sector.
This decision illustrates that the current PICAS system is no substitute for the application of real law and this case makes clear, as do others, the real need for a statutory code and a truly independent tribunal.
Val Spencer of the Cock has commented on this case:
“We feel wholly disappointed & let down by the system & the ‘findings’. With 15 months of battling through the internal procedures of Enterprise Inns & PICAS own procedures we expected to find something of value to resolve the past & improve the future but have been left in limbo”.
“Our 4 clear complaints are based in the detail of the much lauded Code of Practice and Industry Framework Code & we anticipated that those complaints would be upheld, not upheld or partially so, as the PICAS service offers to do, but even after repeated asking we are still waiting for these answers”.
“It is not fair or reasonable to find yourself sitting in a pub waiting for you call back to BBPA offices while the person you know has caused you years of heartache & stress sits in the personal office of a very senior BBPA member. So, comfortable with this situation was the Enterprise Inns representative that he confirmed his use of this office in front of us all, no shame involved.”
“Our feeling of receiving a ‘reactionary’ ambiguous Award aside, we are saddened by the fact we took part in a tokenistic pantomime process that appears to show a tacit acceptance of bad business practice with little attempt to enforce the principles of self-regulation. Is wrong to have expected PICAS & Enterprise Inns to do what they say they will?”.
Greg Mulholland MP, Coordinator of the Fair Deal for Your Local campaign and Chair of the Parliamentary Save the Pub Group commented:
“This latest PICAS case exposes the sorry reality of the so called self regulation of the large pubcos. PICAS is presented as a quasi-legal process of genuine arbitration and it is neither.
“With this account of the process, PICAS has been exposed as being a waste of time, utterly opaque, even to the licensees taking cases and clearly biased. The fact that this hearing was in the pubcos’ lobbyists offices, the headquarters of the BBPA – who Enterprise Inns provide considerable funding to – is extraordinary and disgraceful”.
“Considering how many lessees have grievances with their pubco and are being overcharged, it is clear that having a pitifully small number of cases being ‘heard’ is helpful to brushing the many cases of real injustice and exploitation under the carpet.
“With a few petty ‘awards’ handed out without actually even properly dealing with the real grievances and then trying to silence the licensees involved, even when they have not been told why their real and serious grievances have been ignored, people should now see ‘self regulation’ for what it really is which is a fig leaf specifically devised by the pubcos and the BBPA to avoid Government intervention.
“No wonder the majority of licensee organisations – the ones who don’t receive pubco funding – refused to having anything to do with PICAS or PIRRS. Pubco licensees simply will not trust these bodies in their current guise, nor can they deal with the chronic overcharging, which is the real problem.
“We need a statutory code of practice for the large companies including a market rent only option so at last we can have a fair deal for licensees and local pubs. Self regulation hasn’t and can’t deliver so BIS now need to act”.
Notes to editors:
http://www.legislation.gov.uk/ukpag/1996/23/contents Arbitration act link.