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TRIBUNAL OFFERS FIRST GUIDANCE ON INTERIM RIGHTS UNDER THE NEW CODE

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TRIBUNAL OFFERS FIRST GUIDANCE ON INTERIM RIGHTS UNDER THE NEW CODE

TRIBUNAL OFFERS FIRST GUIDANCE ON INTERIM RIGHTS UNDER THE NEW CODE

In the case of EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of The London Borough of Islington the Upper Tribunal had to determine whether interim rights should be granted to operators in a circumstance where the Landowner wishes to redevelop the building on which their equipment is currently situated (Leroy House) but an alternative site has been identified on the roof of a nearby building (Threadgold House).

In deciding whether an interim agreement should be imposed on the Landowner, the presiding Martin Rodger QC made some interesting comments on the subject of balancing the prejudice to the site provider in imposing rights against the prejudice to the public in not doing so.

Evidence was put forward during the hearing that terms had already been agreed for a Code agreement relating to a new site on the roof of Threadgold House, with compensation and consideration being the only point of contention. The Landowner tried to argue that the position taken by the parties in previous negotiations was irrelevant, but Martin Rodger QC rejected that assertion, saying:

“The Tribunal will have greater confidence in imposing an agreement where it is apparent that the rights sought are not objectionable to the site owner in principle, subject to appropriate financial terms.”

 He also commented on what could be considered unacceptable damage to the public interest:

 “if this corner of Islington loses the mobile phone coverage provided by these operators, no matter how short the period that inconvenience is sustained for, it is likely to be regarded by the public as an unacceptable break in a service they expect to be available to them at all times.”

On balance, the Tribunal found that interim rights should be imposed on the Landowner , but it was left to the parties to consider what the contents of the interim agreement should be. Some points of principle were set out though, as follows:

  • it should not impose any obligations on the site provider other than an obligation not to derogate from the rights granted
  • it should require no covenants or undertakings from the Landowner
  • it should put the full risk of the carrying out of works etc. on the operators

On the controversial matter of what consideration should be paid by the operators for the rights, the Tribunal put off making a decision until the operators’ application for full Code rights is determined at a later date. The operators had put forward a figure of £2,551.77 per annum, while the Landowner had asked for £12,500 per annum. The Tribunal directed that the operators should pay £2,551.00 per annum “on account of the final consideration” and if the Tribunal later imposes a higher figure this will be paid retrospectively. And so the wait continues for the first decision on what should be a “new Code” rent. The following extract from the outcome does though give a clue as to how such a decision might go:

“the whole premise of the Code is that there is a need, in the public interest, to impose agreements on unwilling parties in return for consideration which Parliament has deemed to be adequate notwithstanding that it may be significantly lower than would result from an unrestricted commercial negotiation.”

For more information on this, please contact Graham Jones, or you can give us a call on 0345 070 6000.