Electronic Communications Code Case Law Quarterly Update Autumn 2021

This edition covers the Tribunal’s approach to the key issues of access, indemnities and the basis of renewal agreements

05 November 2021

Welcome to the inaugural Burges Salmon Electronic Communications Code Case Law Quarterly Update. This newsletter will tell you all you need to know about the key cases involving the Code in the last quarter and why they are important. 

EE Limited and Hutchison 3G UK Limited v London Underground Limited (1 June 2021)

Key points

  • Security concerns which can be dealt with using vetting and supervision were insufficient to prevent interim rights being imposed in respect of a sensitive site
  • However, such concerns might tip the balance in favour of the site provider in relation to attempts by an operator to impose permanent Code rights

In this case, the Tribunal considered that the operators’ requirement for interim rights outweighed the security concerns of London Underground. The case provides helpful insight into how the Tribunal may approach the grant of Code rights in respect of security sensitive premises.

The operators had sought interim code rights to undertake a multi-skilled visit to assess the suitability of a site for the location of a mast site. The site was a flat roof on a London Underground network power control centre. The interim rights sought were to allow the operators to enter and pass through London Underground’s premises to gain access to the site at 48 hours’ notice for three months for an hour at a time.

The operators claimed that they required the site because they were about to lose an existing site nearby which was due to create coverage and capacity difficulties for mobile phone networks in a high demand area. London Underground opposed the grant of the interim rights on the basis that they would pose significant security risks and the access arrangements were inadequate.

As interim rights were being sought, the Tribunal only needed to be satisfied that the operators had a plausible case that any prejudice to London Underground was capable of being compensated in money and was outweighed by the public benefit of the rights being granted.

The Tribunal found that the possibility of a serious security incident was too remote to amount to prejudice. Whilst the Tribunal appreciated that London Underground was extremely sensitive to security issues, these concerns could be dealt with by using prior security vetting and proper supervision at the operators’ expense.

The Tribunal therefore found that there was a good arguable case that the public benefit test would be met. However, the operators were warned that when considering the long-term suitability of the site, London Underground’s security concerns might be sufficient to tip the balance in the site providers’ favour.

EE Limited and Hutchison 3G UK Limited v Mayor and Burgesses of the London Borough of Hackney (15 June 2021)

Key points:

  • The Tribunal considered it appropriate for an indemnity provided by an operator to be limited to third party losses
  • The Tribunal found that it was not bound by the OFCOM model form Code Agreement but should have regard to it in considering what terms were appropriate

The Tribunal has provided guidance on the appropriate scope of indemnities provided by operators to site providers in Code agreements, in what is thought to be the first case in which there has been proper argument about the scope of an indemnity in an interim rights case.

In this case, the operator sought interim rights under Paragraph 26 of the Code to access the roof of a residential tower block in order to assess whether it would be suitable for the installation of electronic communications apparatus.

The operator had agreed all terms with the local authority site provider in respect of the interim rights, save for the extent of a contractual indemnity to be granted by the operator to the site provider. The local authority sought an indemnity against all losses arising out of the agreement, limited to £10 million. The operator sought to limit the indemnity so that it only applied to losses caused to third party and not the local authority itself.

The Tribunal found in favour of the operator and limited the indemnity to third party losses. This was on the basis that the Code provided the site provider with a right to compensation under Paragraphs 25 and 84 rather than a statutory indemnity against all losses. The imposition of only a third-party indemnity was therefore consistent with the structure and expectations of the Code.

The Tribunal also noted that the OFCOM model form of Code agreement included an indemnity limited to third-party claims and concluded that, whilst the Tribunal was not bound by the model form of agreement, it should have regard to it as Parliament had intended OFCOM to influence the terms of Code agreements. The Tribunal was less influenced by the forms of indemnity common in agreements entered into outside the context of the Code, as a statutory right of compensation is not available in those agreements.

EE Limited and Hutchison 3G UK Limited v David Paul Stephenson and AP Wireless II (UK) Limited (14 July 2021)

Key Points:

  • Operators are not required to provide a site specific justification to replace an existing agreement with a new agreement under Paragraph 33
  • Unlike under the 1954 Act, under the Code there is no onus on a tenant seeking a change to an existing agreement in a renewal to justify a departure from the previous agreements

In determining a preliminary issue, the Tribunal provided useful guidance as to what presumptions applied in Paragraph 33 proceedings and what operators are required to prove to enter into a new Code agreement.

The operator’s lease of a mast site pre-dated the introduction of the Code in December 2017. The lease was contracted out of the Landlord and Tenant 1954 Act and expired in 2019. The operators served notices under Paragraph 33 on the site provider seeking to terminate the lease and enter into a new code agreement. The site provider opposed the claim on the basis that the existing agreement should instead be either extended or modified.

The Tribunal was asked to determine whether the operators had to prove a site specific justification to replace the existing agreement with a new one. The Tribunal found that they did not. The Code was intended to confer broader rights and more flexibility on operators in view of the impending arrival of 5G networks and new technology. The additional rights provided to operators by the Code justified a departure from the terms of previous agreements and it was not necessary for special justification to be provided.

Paragraph 34(13) of the Code specifically required the Tribunal to have regard to the operator’s 'business and technical needs' and it followed that Parliament could not have intended to impose a requirement to provide a specific need for the change.

Although parts of the Code were similar to the 1954 Act, the O’May principle (which applies in lease renewals under the Landlord and Tenant Act 1954 and puts the onus on justifying a change to an existing agreement on the party seeking the change) did not apply under the Code.

Cornerstone Telecommunications Infrastructure Limited v St Martins Property Investments Limited and The Mayor and Commonalty and Citizens of the City of London (8 October 2021)

Key points:

  • The Tribunal confirmed that non-intrusive surveys should be carried out before the rights to carry out intrusive surveys are imposed.
  • Operators should not generally be expected to pay for the costs of professional supervision of their own professionals during non-instrusive investigations.

In this case, the Tribunal provided commentary on operators’ rights to carry out Multi-Skilled Visits (MSVs) including on the timing of invasive surveys, the costs of supervision and the costs of agreeing and/or resisting such rights.

The operator sought an interim order under Paragraph 26, granting it access to the roof of 1 London Bridge. The interim order sought by the operator would allow it to carry out an MSV in order to assess the rooftop’s suitability as a mast site. This included 'destructive investigative works' involving taking up parts of the roof to investigate its structure.

The occupier opposed the carrying out of intrusive investigative works, especially as the roof of 1 London Bridge was said to be coated with a particular proprietary material which would be difficult to reinstate. The occupier also did not believe the rooftop would be a suitable site and so should not be subjected to intrusive works until its suitability had been assessed by other means.

The occupier also wanted the operator to pay for the occupier’s telecommunications agent to supervise the operator’s access to 1 London Bridge.

The Tribunal decided not impose an agreement at the first hearing allowing the operator to carry out the contested intrusive works. The Tribunal found that the operators should carry out non-intrusive works to establish the suitability of a site before considering whether further rights to carry out more invasive surveys were required.

The Tribunal further found that, whilst it was common to allow the recovery by the occupier of the expense of a security guard or building manager to supervise access, operators should not be required to pay the cost of professional supervision of other professionals.

The Tribunal awarded the occupier its full transactional costs of c. £11,000 but awarded only £12,500 of the £82,500 the land owner had incurred in the litigation. In doing so the Tribunal warned that parties refusing operators access to their property could expect to recover only a small proportion of their costs where the Tribunal considered these to be excessive.

This update was written by Chris Preston and Robert Bailey. To discuss any of the points raised in this update in more detail, please contact Chris Preston.

Key contact

Chris Preston

Chris Preston Partner

  • Real Estate Disputes
  • Real Estate
  • Retail

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