Last year was noticeably lighter than previous years in terms of telecoms litigation and reported cases, but there were still key decisions and legislative changes to be aware of.
What did the courts decide in 2023?
Concurrent leases In Vodafone Ltd v Potting Shed Bar and Gardens Ltd (formerly known as Gencomp (No 7) Ltd) and another [2023] EWCA Civ 825; [2023] EGLR 31, the Court of Appeal held that a head tenant that granted a lease during the term of an existing code agreement (a concurrent lease) is still treated as a party to the code agreement, even though they are not a successor in title to the original code agreement.
The decision gave welcome clarification for landowners and tenants under concurrent leases and plugged what was a potentially significant gap in the Code that would have left both site providers and operators exposed.
The decision was also aligned with the purposive approach to interpretation taken by the Supreme Court in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates and conjoined appeals [2022] UKSC 18; [2022] EGLR 28, requiring the courts to look at how the regime is intended to work and not simply the language used.
Paragraph 40(8) Relying on paragraph 40(8) of the Code, the First-tier Tribunal in On Tower UK Ltd v Gravesham Borough Council (FTT, 18 October 2023) allowed an operator’s application for a new code agreement under Part 4 to proceed, even though its renewal claim under the Landlord and Tenant Act 1954 had been lost on a procedural technicality and the operator was otherwise liable to be removed under Part 6 of the code.
The tribunal clarified that where an operator’s existing code agreement was substantively terminated, any further application for a new agreement under Part 4 of the code would be liable to be struck out. The decision has been viewed as controversial by site providers and it is hoped that the tribunal will police operators’ conduct to avoid paragraph 40(8) being used inappropriately.
Costs In Cornerstone Telecommunications Infrastructure Ltd v AP Wireless II (UK) Ltd [2023] UKUT 188 (LC), the Upper Tribunal was asked to consider costs of various court proceedings. The reference at the centre of this decision was Ashloch, which was one of the conjoined appeals to the Supreme Court in Compton Beauchamp.
The tribunal ordered Cornerstone to pay AP Wireless II’s costs over various periods, as they had failed to achieve a new code agreement and had obtained only minor variations to the existing tenancy which remained. The operator’s failure to withdraw its claim was criticised, but the tribunal refused to order indemnity costs as it was said that nothing the operator or its advisers had done seemed to be in any way “out of the ordinary or meriting disapproval or an unusual costs order”.
Although involving the Scottish courts, two further decisions pursuant to the code in Cornerstone Telecommunications Infrastructure Ltd v Marks & Spencer Plc and another (LTS/ECC/2020/34) are also worth mentioning. In this reference, the Scottish Lands Tribunal initially found in Cornerstone’s favour, imposing a new agreement on M&S. M&S subsequently requested that the tribunal consider a further point relating to electromagnetic exclusion zones, but as the substantive issues in the reference had already been determined, the tribunal declined. The Court of Session upheld this decision.
The tribunal was then required to consider costs. It was held that although Cornerstone had been successful in imposing a code agreement on M&S, the terms offered were not fair and reasonable and it was reasonable for M&S to oppose them. Taking these factors into account, the tribunal ordered that the parties bear their own costs of the proceedings.
These decisions offer an important reminder to site providers that all objections to a code agreement should be raised in good time and generally, that a party’s costs may not be recoverable if the tribunal considers they have acted unreasonably during negotiations.
Legislative and procedural changes
Recent legislative changes to the code include new procedures for imposing rights on unresponsive landlords for multi-tenanted residential properties, expanded rights to share and upgrade existing underground apparatus, a new national security objection, and provisions imposing a duty on operators and site providers to consider alternative dispute resolution options before applying to the tribunal (which aligns with the courts’ guidance on costs).
Many of those changes were brought about by the Product Security and Telecommunications Infrastructure Act 2022, enacted in December 2022. But its implementation has been gradual and further legislative changes are still to be brought in during 2024, including the harmonisation of the Code with the Landlord and Tenant Act 1954 renewal process. From April, the FTT will take over jurisdiction to hear all references under the Code from the UT. Helpfullu, it appears the FTT’s decisions will continue to be published online (in the residential section) despite some initial uncertainty.
The present situation
Notwithstanding the plethora of decisions since 2017 and the recent legislative changes, there appear to be few reasons for the site provider community to celebrate. The 2022 Act feels like a missed opportunity to “iron out” some of the fundamental issues which are limiting the success of the code and the roll out of infrastructure because the risk versus reward analysis feels skewed, particularly in the context of mobile network apparatus and mast sites.
The most pertinent issues that remain include ensuring the certainty of removal of apparatus for site providers when redeveloping without substantial cost and lead time due to contested termination references (we question whether the ability to contract out of the Code would assist on both sides), the operational issues caused for site providers in connection with the installation of equipment on their land and buildings, and costs, which remain an issue where site providers receive such little income from having telecoms apparatus on their land.
Martin Garner is a partner and Charlotte Green is a senior associate in the real estate disputes team at CMS Cameron McKenna Nabarro Olswang LLP