Telecoms Code costs regime 'flawed'

In a recent case in the Upper Tribunal (England & Wales), presumptions about the recovery of professional fees, have been challenged. The case involved roof space of a prominent building on London Bridge and concerned an application for interim Code rights to be imposed on the site provider.

Operator access and right to do works

The tribunal was asked to decide the terms upon which operator access should be allowed and in particular, whether the right to undertake potentially destructive “investigative works” should be granted at this (interim right) stage.

The parties had negotiated a draft Code agreement, but, on the "investigative works" the agreement provided no explanation. Shortly before the hearing, the operator proposed a more detailed works provision.

The site provider was concerned particularly about the building roof space, which it said was coated with a particular proprietary material that would difficult to reinstate if pierced or damaged; and, argued that a visual inspection only was more suitable.

Recoverable costs during access works

A site provider has a right to compensation for expenses which it has incurred, including reasonable legal and valuation expenses. Where a building is of a sensitive nature or has a restricted access policy such compensation may well include the cost of the building owner supervising access.

Witnessing access works is perfectly permissible, but operators will not be expected to write a cheque to telecoms agents who may have no relevant experience of the technical matters which are being investigated.

Reasonable expenses for security guards to accompany contractors around a building, building manager providing a briefing about access routes or services or unlocking secure areas as necessary, may be allowed.

Where non-destructive investigations are being undertaken, professional supervision of professionals is not something which operators should be expected to pay for.

Access only at this stage

Of the site provider's concerns around damage and suitability of the building, the tribunal said that on some occasions these points may not hold weight, but the circumstances here were different. The site provider's concerns could not be dismissed as obstructive or oversensitive.

The tribunal refused to impose an agreement including the proposed "investigative works", stating that the operator should carry out non-intrusive investigations to first establish the suitability of the building for its telecoms kit.

Costs

The site provider sought costs for obtaining advice on the Code and negotiating the agreement in the sum of £11,000 and for advice from a telecoms agent of £875. The operator proposed that reasonable costs would be £750, but had offered the site provider £1,500.

The tribunal awarded £11,000 to the site provider, stating:

"The notion that an operator should be required only to make a contribution towards the legal expenses incurred by a site provider, and that the site provider should thereby be left out of pocket, is flawed. The site provider is entitled to recoup its reasonable legal expenses – all of them – and in this case, on the material before the Tribunal, those reasonable legal expenses are £11,000."

On the final matter of costs in the litigation, the tribunal repeated the warning from previous cases that, no matter the outcome, site providers who refuse access to sites cannot expect to recover the scale of their incurred costs. The site provider here was awarded approximately 40% of its costs.

If you have any concerns or questions about telecoms agreements or how these decisions may impact you or your business, please do not hesitate to get in touch with our Real Estate Disputes team or your usual Brodies' contact.