Investigations by the adjudicator
Section 8: Power to investigate
22.This section enables the adjudicator to investigate whether a pub-owning business has failed to comply with the code, but only after the adjudicator’s statement of investigation policy has been published (under section 13, see below).
Section 9: Enforcement action
23.If the adjudicator concludes following an investigation that a pub-owning business has failed to comply with the code, the adjudicator may do one or more of the following: direct the pub-owning business on how it should comply with the code; direct the pub-owning business to publish information; and/or impose financial penalties on the pub-owning business (section 10 says more about financial penalties – see below).
24.Failing to comply with a direction under this section will be a breach of the code (see schedule 1, paragraph 2). If, at the conclusion of an investigation, the adjudicator directs a pub-owning business, the adjudicator must then monitor the business’s compliance with those directions (under section 9(2)). If the adjudicator finds that the directions have not been complied with, the adjudicator may impose a financial penalty. The decision about what enforcement action to take at the end of any investigation will be for the adjudicator to take in light of all the facts and circumstances of the case.
25.If the adjudicator directs a pub-owning business to publish information relevant to the investigation then the adjudicator can specify in writing to the pub-owning business what the information is, how it should be delivered or presented, and by what deadline the information should be provided.
Section 10: Financial penalties under section 9
26.Under section 9, the adjudicator may impose a financial penalty on a pub-owning business if, following an investigation, the adjudicator concludes that the business has failed to comply with the code. The business becomes liable to pay the penalty when the adjudicator sends a notice under section 10 confirming that a penalty has been imposed, setting out the reason for the penalty, the amount, and when and how it is to be paid. The amount of the penalty may not exceed whatever maximum penalty is fixed by the Scottish Ministers (subsections (2) to (4)). The imposition and amount of the penalty may be appealed to the sheriff. Under existing legislation, the sheriff’s decision may be further appealed to the Sheriff Appeal Court.
27.Any money received from financial penalties must be paid into the Scottish Consolidated Fund (subsection (5)) rather than being kept by the adjudicator.
Section 11: Investigation report
28.This section requires the adjudicator to publish a report at the end of an investigation.
29.Subsection (2) specifies that an investigation report must set out and explain any findings and any actions taken or proposed.
30.Under subsection (3), the report does not have to disclose the identity of the pub-owning business in question (for example, because the adjudicator considers that the objectives of the code can be effectively achieved whilst dealing with the relevant pub-owning business privately). If the adjudicator does choose to identify the pub-owning business in an investigation report, the business must be given an opportunity to comment on a draft before it is published (subsection (4)).
Section 12: Recovery of investigation costs
31.The adjudicator may require a pub-owning business to pay some or all of the costs of an investigation if the adjudicator finds that the pub-owning business has failed to comply with the code.
32.Subsection (2) states that where a person (for example, a tenant) has made a complaint which was found to be vexatious (intended to frustrate or delay without any chance of success) or wholly without merit, the adjudicator may require that person to pay some or all of the costs of the resulting investigation.
33.Subsection (3) provides that the business or person required to pay costs becomes liable to pay those costs when they receive a notice in writing informing them of the requirement; the reasons for imposing the requirement; the amount; and when and how it must be paid. The adjudicator cannot seek to reclaim in this way more than the total cost of the investigation (subsection (4)). The imposition and amount of the costs being recovered may be appealed to the sheriff. Under existing legislation, the sheriff’s decision may be further appealed to the Sheriff Appeal Court.
Section 13: Investigation policy
34.This section requires the adjudicator to publish the details of its investigation policy. Such a statement must include the criteria that the adjudicator will use when deciding whether to investigate and set out the practices and procedures that will be followed by the adjudicator when investigating. The statement must also set out criteria relating to enforcement decisions and actions and setting levels of financial penalties (see paragraphs 69 to 73). In drawing up the criteria (other than those relating to practices and procedures) the adjudicator must have regard to the impact the behaviour of tied-pub tenants may have on compliance with the code by pub-owning businesses. The criteria (which the adjudicator will adopt in relation to whether to carry out an investigation under section 8 of the Act) must also include time limits within which an investigation may be initiated (therefore ensuring that tenants and pub-owning businesses do not remain subject to, and the adjudicator is not able to take action under, the code indefinitely including, for example, after the tied lease comes to an end).
35.Subsection (2) confirms that the adjudicator must be guided by the statement when investigating and subsection (3) confirms that the adjudicator can amend the statement at any time. As the statement must be published, any changes made to it will therefore be available for all to see. Subsection (4) requires the adjudicator to consult before preparing or amending the statement.