Judge blocks new Scottish government pub laws

A senior judge has passed an order preventing the Scottish government from introducing a law to promote fairness between tied pub tenants and landlords.

Lord Malcolm issued an interim interdict preventing ministers enacting The Tied Pubs (Scotland) Act 2021.

The members bill was brought forward by Neil Bibby MSP and supported by the government through parliament.

Mr Bibby said it was "shameful" that pub companies were attempting to block fairer laws and an "insult" to tenants.

A Scottish government spokesperson said it remained "fully committed" to implementing the act.

A spokesperson for the pub companies welcome the decision of the courts and described the legislation as "wholly unnecessary and punitive".

Pubs code

Mr Bibby, a Scottish Labour MSP, had argued tenants of pubs tied to a particular brewery were obliged to buy alcohol from them at inflated prices.

The act intended to establish a more equal relationship between such tenants and pub company owners, creating a "Scottish pubs code" and an adjudicator for disputes.

Pub owners previously lost a challenge at the Court of Session to stop it being enacted into law.

But on Monday, lawyers for Greene King and Punch Taverns returned to the Court of Session seeking an interim interdict against introducing the legislation.

The firms, represented by advocate Aidan O'Neill KC, asked for an order to be passed, which Lord Malcolm agreed to.

Mr Bibby maintained the Scottish government was right to implement the legislation.

"It is shameful that the big pub companies are attempting to block fairer pub laws in the courts because they lost the argument in Parliament," he said.

"These companies are hell-bent on denying their own tenants in Scotland new rights and protections.

"These are the same company bosses who have failed to properly support small businesses during Covid and the recovery.

"It is frankly an insult to their tenants that they are now spending their rent money on legal action to stop those tenants getting greater rights and fairness."

The pub companies had previously claimed the act was outside the legislative competence of the Holyrood parliament and was "not law".

They maintained that provisions of the act related to competition, which was a matter reserved for the Westminster parliament.

The move was opposed by Scotland's senior law officer, the Lord Advocate.

Lawyers acting for the landlords argued that the legislation interfered disproportionately with their property rights, was not evidence-based and posed a danger to investment in the sector.

It was argued that tied pub tenants already enjoyed significant protection through a voluntary code of practice for the sector that included access to a dispute resolution mechanism.

The Lord Advocate, Dorothy Bain KC, maintained the act did not relate to the reserved matter of competition. She argued it was not concerned with the competitive structure of the market but with the terms of individual agreements between landlords and tied pub tenants.

'Fully committed'

On that occasion the judge, Lord Harrower, rejected the landlords' arguments and refused their petition.

He said they had "confused legislation whose purpose is to regulate competition with legislation which may have an impact on competition".

But the legislation cannot now be brought into force in the wake of the interim verdict.

It comes ahead of an appeal which will be heard later this year.

A Scottish government spokesperson said it noted the outcome of the latest interim hearing "with regret".

"Ministers recognise this is an extremely difficult time for the sector and the ongoing uncertainty created by the legal challenge continues to be problematic for both tied pub tenants and pub-owning businesses," the spokesperson added.

"The Scottish government remains fully committed to implementing the act and will continue to take the necessary steps to provide clarity for the sector by implementing the act as soon as possible, within the terms of the interim interdict."

'Unnecessary and punitive'

A spokesperson on behalf of the pub companies said they were pleased by the decision of the courts ahead of their appeal.

"We believe there remains no evidence to support the introduction of this wholly unnecessary and punitive legislation, which would arrive in the midst of an economic crisis, and at a time when the Scottish government is also considering potential restrictions to alcohol advertising and promotion, and pubs in Scotland also face further increased financial pressures with the introduction of a deposit return scheme.

"We also have an obligation to clarify that during Covid-19, pub companies in Scotland contributed tens of millions of pounds of financial aid to help sustain pubs through extended periods of closure, support which other commercial businesses did not receive from landlords.

"The combination of the impending act alongside inflationary pressures and increased energy costs is creating a significant threat to the future of the tied pub sector in Scotland, and is continuing to negatively impact investment in pubs and the benefits that this brings."