The Lands Tribunal for Scotland has now published one of their first written judgements of 2024 involving issues in relation to the Electronic Communications Code ("the Code"). The decision goes into significant detail analysing a number of provisions which frequently arise in Code Agreements entered into against the background of the Shared Rural Network ("SRN") programme.

Case Details

The facts in this case are that the operator, Hutchison 3G UK Ltd, wished to install a telecoms mast within subjects at Loch Assynt Estate which would be shared under the SRN programme between the operator, Vodafone Ltd and Telefonica UK Ltd. The specific site proposed by the operator was located to the north of the Estate lodge.

As part of the process of securing a Code Agreement in relation to the site, the operator applied for interim rights under paragraph 26 of the Code, which would allow them to progress development of the site until such time as a permanent Code Agreement is either agreed between parties or imposed under paragraph 20 of the Code.

Whilst the Estate conceded that an interim agreement was required in this instance, parties were unable to agree on a number of drafting points and this referral to the Lands Tribunal was intended to guide parties in relation to the contentious points so an interim agreement could be reached.

Decision

The full judgement can be accessed here, but a summary of the substantive contentious provisions and the Tribunal's decision follows below.

Notice Requirements

Whilst parties had agreed on a length of notice required before the operator could take access, there was dispute in relation to the landowner's requirement that details of the access being taken would be disclosed by the operator prior to access being taken. The Tribunal considered that this requirement would not be necessary and notice provisions would themselves be sufficient if the definition of the area over which the operator has access could be sufficiently restricted.

Site Payment

There was further dispute between parties in relation to the value of the site payment and the compensation provisions within the agreement. It is notable that the Tribunal opted to impose the operator's lower proposed figure for the site payment on the basis that this figure was unlikely to be reduced once the permanent Code Agreement was agreed. With regard to compensation, the Tribunal noted that the draft agreement included provisions for future compensation but parties were unable to agree the wording, particularly in regard to the foreseeability of the loss that would be compensable. Given the Code includes provisions for future compensation at paragraph 25, the Tribunal's solution at this stage was to propose that all future compensation wording should be deleted and parties could then seek to rely on the rights granted by the Code.

Maintenance

Parties disputed the provisions in relation to maintenance of the shared access route that would be used by the operator and the landowner. The Tribunal highlighted their concern that a proposal for maintenance contributions to be made on a per-user basis could be difficult to estimate in practice, and therefore proposed that parties should seek to agree an estimate of the cost of the work (assuming it is carried out by the landowner) and this could then just be included within the site payment.

Upgrading of Equipment

The landowner sought to remove the ability for the operator to add to their equipment on the site and also sought to caveat the operator's ability to upgrade the equipment. Referring to previous case law and the provisions of the Code, the Tribunal agreed that the words "add to" could be deleted from the draft, but were not persuaded that upgrades should be limited. The Tribunal's view was that the number of operators entitled to share the equipment should be limited to those involved in the SRN project, which would in turn restrict the requirement for any new equipment or upgrades.

Interference

The draft agreement contained provisions for the landowner to take "reasonable precautions" to ensure that no person within the landowner's reasonable control would interfere with, tamper with or obstruct the operator's equipment. This wording was objected to by the landowner and the Tribunal agreed that it should be deleted on the basis that the operator would be likely to take their own practical precautions such as the installation of signage which would mean further "policing" of the site by the landowner would be unnecessary.

There were a number of additional points which the Tribunal also considered in their judgement, but were either disposed with in a straightforward manner because the parties had come to a compromise position, or where the Tribunal indicated that they would revisit the point as part of any application for a full Code Agreement under paragraph 20 of the Code.

Conclusion

Given the deadlines which Code operators are working toward in relation to funding available under the SRN, we anticipate that some operators may be more willing to consider the possibility of referring questions to the Lands Tribunal in order for them to continue progressing site development.

With that in mind, parties should continue to engage from an early point in the process with the intention of achieving a consensual Code agreement, thereby minimising the risk of time-consuming and costly litigation, as well as the possibility of a Code Agreement being imposed which conflicts with the ongoing use of the property.

Our Sector Expertise

Brodies has a long track record in the telecommunications industry, supporting operators in relation to their infrastructure requirements right across the UK, as well as institutional landowners.

Our sector expertise with specialist lawyers means that we regularly advise on issues involving the negotiation and preparation of Code Agreements, including applications made for interim rights under the Code, alongside renewal and termination of existing Code Agreements.

If you have any concerns or questions about the Electronic Communications Code or how this decision may impact you or your business, please do not hesitate to get in touch a member of our Telecoms team or with your usual Brodies' contact.

Contributors

Simon Boendermaker

Senior Solicitor

Scott Logan

Legal Director

Graeme Leith

Partner