The Electronic Communications Code: What it is and why compliance with Tribunal procedure & proper conduct during negotiations is vital.
Alicia Jewitt and Sarah Diak, 21st May, 2020
The recent decisions in EE Ltd & Anor v Trustees Of The Meyrick 1968 Combined Trust ( UKUT 105 (LC)) illustrate how the Tribunal takes a dim view of parties raising issues in dispute at the last minute and not complying with the procedural directions and the significant repercussions for the defaulting party.
Landowners are undoubtably affected by the needs of telecommunications operators (“Operators”) to install and maintain apparatus in, over and under land to provide their communications networks. The Electronic Communications Code (“the Code”) came into force on 28 December 2017; the purpose being to clearly regulate the legal relationship between Landowners and Operators.
Gosschalks assists both Landowners and Operators in this niche area with an astounding reputation on ensuring positive outcomes for our clients especially during the transition period of the Code. In this article, Sarah Burn and Alicia Jewitt provide an insight into the Code and the recent case of EE Ltd & Anor v Trustees Of The Meyrick 1968 Combined Trust ( UKUT 105 (LC)).
What is the Code?
The Code regulates the legal relationship between Landowners and Operators and the agreements relating to telecommunications apparatus on land or buildings throughout England and Wales.
One of the objectives of the Code is to accommodate the continuous expansion of digital technologies and our ever-growing demand for data usage (even more so now with the Coronavirus restrictions leading to unprecedented numbers of people working and schooling from home). The Code enables Operators to roll-out or upgrade their services to enable them to keep up with the changes in technology.
The Code simplifies the process for Operators to install and maintain apparatus on land by enabling applications to the Court to obtain certain rights which would have previously needed the consent of the Landowner.
It is important to note that the Code has introduced (amongst other things):
Valuation criteria for assessing the amount to be paid by the Operator to the Landowner for the grant of the Code Rights. The criteria have seen sums previously paid under the old telecommunications legislation plummet.
Security for the Operators by providing for a minimum 18-month termination period and the ability for the Operator to ask the Court to renew a Code agreement.
Both of which will naturally cause concern for Landowners.
What are Code Rights?
The Code gives Operators clearer and more flexible rights than previous telecommunications legislation. The “Code Rights” allow Operators to:
- Install and keep installed the apparatus on, under or over the land.
- Inspect, maintain, adjust, alter, repair, upgrade or operate the apparatus.
- Carry out works on the land for or in connection with the installation of the apparatus on the land or elsewhere.
- Carry out works on the land for or in connection with the maintenance, adjustment, alteration, repair, upgrading or operation of the apparatus on the land or elsewhere.
- Enter the land to inspect, maintain, adjust, alter, repair, upgrade or operate any apparatus which is on the land or elsewhere (this includes the right to survey the land to assess the suitability of the same for the installation of equipment)
- Connect to a power supply.
- Interfere with or obstruct an access.
- Lop or cut back vegetation that may or will interfere with the apparatus.
Code Rights must be used for the statutory purposes of providing the Operators network or providing an infrastructure network.
How are Code Rights acquired?
1) By written agreement between the Landowner and Operator; or
2) By order of the Court – in such matters the Upper Tribunal of the Lands Chamber is the preferred Court (‘the Tribunal’).
In order to seek an agreement the Operator should:-
- write to the Landowner, advise of their intention to gain Code Rights over the land and invite them to enter a written agreement.
- If a dialogue cannot be established or an agreement cannot be reached between the parties the Operators can/will serve notice under the Code specifying the Code Rights sought.
- If, after 28 days of service of the notice, the Landowner fails to agree to enter into the agreement the Operator can apply to the Tribunal for an order imposing the Code Rights sought.
The Code and the procedural rules of the Tribunal must be followed.
Although using a solicitor is not a requirement, having an expert who is experienced in negotiating Code agreements or making / defending the Tribunal application is, without doubt, advantageous. The EE Ltd & Anor v Trustees of The Meyrick 1968 Combined Trust ( UKUT 105 (LC)) case demonstrates just how important both conduct and procedure are under the Code.
How will any disputes be resolved?
Invariably the interests of the Landowners and Operators may not align, especially so as the financial gain to the Landowner is less under the Code than previous legislation and the ability for the Operator to bind the Landowner by the Code.
If the parties cannot agree terms then an application has to be made to the Tribunal.
The Tribunal will make an order imposing Code Rights if the following conditions are satisfied:-
The prejudice caused to the Landowner can be adequately compensated by money; and
The public benefit likely to result from the order outweighs the prejudice to the Landowner. In considering this, the Tribunal must have regard to the public interest in having a choice of high-quality electronic communications services.
The Tribunal may not make an order if the Landowner demonstrates an intention to redevelop all or part of the land, or any neighbouring land, and would be prevented from doing this if the order was granted.
What are the implications of the Tribunal decision in EE Ltd & Anor v Trustees of The Meyrick 1968 Combined Trust ( UKUT 105 (LC))?
In previous cases the Tribunal has highlighted the importance of complying with Tribunal procedure and demonstrating good conduct during the negotiation process. The recent decisions in EE Ltd & Anor v Trustees Of The Meyrick 1968 Combined Trust ( UKUT 105 (LC)) affirms the stance adopted by the Tribunal.
In this case the Operators (EE Limited and Hutchison 3G Limited) sought Code Rights allowing them to maintain and operate their mast on a site in Hinton, Hampshire belonging to the Landowner.
Initially, the Landowner opposed the imposition of the Code Rights sought by relying upon the ground of re-development of the site. On 9 July 2019 the ground of opposition was rejected by the Tribunal and directions were ordered for the parties to follow to allow the Tribunal to determine the terms of the agreement to be imposed. The directions included the process of reviewing, amending and adding comments to the draft Code agreement passing between the parties so that any issues would be identified prior to the hearing listed for 24 and 25 March 2020.
The Landowner failed to comply with the directions and within written submissions to the Tribunal dated 23 March 2020 sought to introduce new issues that were not present in the travelling draft.
The Tribunal refused to consider the wider issues on the basis that the Landowner had failed to comply with the procedural timetable and attempted to widen the issues in the dispute too late.
Judge Elizabeth Cooke found the Landowner had sought to:-
“delay the resolution of the reference and to hijack the final determination by raising issues that should have been raised months ago”
Accordingly, the Tribunal concentrated on the amendments required by the Operators and did not consider the late arguments of the Landowner, finding in favour of the Operators.
On 7 May the Tribunal handed down its decision on costs in the matter.
The decision is scathing of the conduct of the Landowners throughout the case, with the Tribunal stating that the Landowner:-
- Deliberately misrepresented the evidence to the Tribunal;
- Put forward a seriously uneconomic scheme of development, the plans being conceived as a smoke screen in order to defeat the claim for Code Rights;
- Put forward a case that was unreasonable to a high degree;
- Sought to delay resolution and highjack the final decision by raising issues at the last moment. As such their cynical conduct was with mischievous intent which the Tribunal found to be vexatious and unacceptable. Such conduct being unreasonable to a high degree and out of the norm.
As a result of the above the Landowner was ordered to pay the Operators costs on an indemnity basis.
Important points to note:-
Given the decisions in this case the most important points for parties to note are:-
- The Tribunal will take a strict approach when it comes to poor conduct.
- The parties should adhere to the Tribunal directions.
- The parties should ensure that all issues in dispute are raised at the appropriate time.
- The parties should take positive steps to engage in the negotiation process.
- Should a party fail to do so then it will be penalised heavily when it comes to the costs of the Tribunal proceedings.
Are Gosschalks able to act for me?
We are experienced in dealing with the Code. We act for both Operators and Landowners in negotiating Code agreements and bringing / defending Tribunal applications. If you have any questions on any aspect of the Code, Code Agreements or Tribunal procedure please contact us for prompt and practical advice.
Want to learn more about how we can help?
If you are interested in speaking with us to establish how we may be able to help, please get in touch for a no obligation chat with our personable and experienced team.