Telecommunications – Electronic communications code – Interim rights – Code agreement permitting claimants to undertake multi-skilled visit on roof of defendant’s building – Dispute arising as to form of indemnity to be included in Code agreement – Whether indemnity to be restricted to third-party claims – Application granted
The claimants were telecommunications operators. The defendant local authority was the owner of Shoreditch House at 239 Old Street, London EC1. The property was a residential tower block with commercial units on the ground floor. The claimants sought the right to go onto the roof of the building to undertake a multi-skilled visit (MSV), involving surveys by appropriately qualified professionals and contractors to determine the suitability of the site to host the installation of electronic communications apparatus. The site was identified as a replacement for an existing mast site close by, which the claimants were required to vacate because of redevelopment. If confirmed to be suitable it was likely that the site would either be the subject of an agreement between the parties or an application to the tribunal under para 20 of the Electronic Communications Code for longer term comprehensive code rights.
There was no dispute between the parties that the relevant qualifying conditions were satisfied, and that the tribunal ought to impose an agreement permitting the MSV surveys to be undertaken. The terms of the proposed agreement were largely agreed in a form acceptable to the defendant. The only outstanding issue related to an indemnity to be given by the claimants to the defendant in respect of liabilities, costs, expenses, damages and losses in connection with the agreement.
The claimants argued that the indemnity should be modified, and limited in its effect, so that it extended only to “all third-party liabilities costs expenses damages etc” so that it would not cover costs, expenses, damages, or losses incurred by the defendant site provider itself. Since the dispute could not be resolved by agreement, the claimant applied to the tribunal for a determination.
Held: The application was granted.
(1) The basis on which the tribunal determined the terms of any Code agreement which it imposed were provided by para 23 of the Code. The tribunal was required to impose an agreement which gave effect to the code rights sought by the operator with such modification as it thought appropriate. The code right in this case was simply the right to undertake the MSV. The tribunal was also required to include in the agreement such terms as it thought appropriate. Paragraph 23(5) provided a further relevant direction to the tribunal, that the terms of the agreement should include the terms the tribunal thought appropriate “for ensuring that the least possible loss and damage is caused by the exercise of the code rights” to those who occupied the land or who owned interests in it or were from time to time on the land.
Very little had been said by the tribunal about indemnities and how broad an indemnity was appropriate in an interim rights case. In the context of an application for permanent rights, the tribunal held that the purpose of the indemnity was to regulate and manage third party claims against the respondent arising from the unlawful acts or omissions of the claimant. It was not a catch all protective provision for the benefit of the respondent covering every conceivable loss or damage, whatever the cause and regardless of the other provisions of the agreement. That being so, it was plainly inappropriate for the defendant to seek an indemnity in respect of all losses, damages, costs and expenses and all claims and proceedings arising from any unlawful act of the operator: Cornerstone Telecommunications Infrastructure v University of the Arts London [2020] UKUT 248 (LC); [2020] EGLR 36 considered.
What was appropriate in any particular case was influenced by its own circumstances but the mere fact that one claim was for permanent rights and another only for interim rights necessarily justified imposing a different form of obligation. One might say that a Code agreement which related only to access for inspection and surveys ought to be correspondingly limited in its terms, which would be a consideration against a wide-ranging indemnity.
(2) Limiting the indemnity to third party claims did not infringe the requirement in para 23(5) to fashion terms appropriate for ensuring the least possible loss and damage was caused by the exercise of the code rights. The contractual agreement had to be seen in the context of the other protections offered by the Code, in particular the para 25 right to compensation for any losses caused by loss or damage sustained by the site provider as a result of the exercise of the code right. Any statutory right of compensation was controlled or restricted by the overarching legal principles of causation, remoteness of damage and the requirement of mitigation of loss.
The proposed indemnity, if applied to the site provider’s own losses, would side step those legal limitations. Yet when parliament designed the Code, it saw fit to confer on site providers a right of compensation and not a statutory indemnity against all losses free of those restrictions. It could not have considered that statutory compensation provided inadequate protection or intended that para 23(5) should oblige the tribunal to impose an even more comprehensive contractual indemnity. The imposition of only a third-party indemnity was consistent with the basic structure and expectations of the Code. It was what was appropriate in the context of a Code agreement.
(3) The OFCOM model form of Code agreement included an indemnity clause limited to third party claims. Parliament intended OFCOM to influence the terms of Code agreements by example, so while the tribunal was not bound by its model form of agreement, it should have regard to it. The tribunal was less influenced by the forms of indemnity common in other types of agreement beyond the context of the Code. Those agreements were negotiated by parties in circumstances which did not include a statutory right of compensation which distinguished them from rights of access imposed by the tribunal under para 26 of the Code.
The statutory right to compensation specifically included a right to legal or other professional expenses, and an inability to recover costs which had not been reasonably incurred was a risk of all litigation. Parliament was clearly satisfied that compensation for loss and damage was a sufficient remedy for site providers. The words “third party” would be inserted into the first line of the indemnity to make clear that it covered only third-party claims.
James Tipler (instructed by Winckworth Sherwood LLP) appeared for the claimants; Jonathan Wills (instructed by Freeths LLP) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of EE Ltd and another v Hackney London Borough Council
