Electronic Communications Code: Excessive Costs Consequences

The Upper Tribunal has handed down a stern warning in the latest Electronic Communications Code case of Cornerstone Telecommunications Infrastructure Ltd (CTIL) v Central Saint Giles General Partner Limited & Clarion Housing Association Limited [2019] , which could have wider implications for other Tribunal cases.

The dispute initially concerned access to a building to carry out a survey. The Tribunal had only six months previously determined, in the case of Cornerstone Telecommunications Infrastructure Ltd v The University of London [2018] that the right to enter a building to conduct a non-intrusive survey was capable of being a Code right. The Tribunal was less than impressed that it was being asked to decide the same issue again and matters were not improved by the fact that agreement had been reached on the Tribunal steps and the only issue left in dispute was the “staggering” level of costs.

It is sobering for all involved in Tribunal proceedings that in light of the conduct of the proceedings by the successful party, which was branded“wholly disproportionate to the dispute”, the party was only able to recover about 20% of their costs from the other side.

The Tribunal has put down a clear marker in a judgment which criticises both sides and discourages senseless disputes involving disproportionate and inappropriate conduct. Access for surveys is clearly not considered to be a Code issue, which justifies Tribunal time. The Code is meant to be nimble and cost effective and obstruction of preliminary surveys could hinder its objectives.

Right of access for survey

CTIL sought access to the first respondent’s building and explained what the survey would entail. Problems arose when the question of the level of indemnity for claims arising from the exercise of the Code rights was discussed. CTIL wanted to cap at £1 million and the first respondent wanted £10 million. The Tribunal observed that such a figure seemed excessive given the duration and purpose of the access required.

The indemnity dispute prompted CTIL to seek interim Code rights. In doing so they sought access for the full extent

of Code rights over a 28 day period. Such rights were significantly broader than their first survey request and included the ability to interfere or obstruct building access. The compromise agreement reached between the parties involved CTIL conceding the £10 million demand, whilst the first respondent allowed the survey to proceed on condition that no equipment would be permanently installed as part of the process.

Costs

As in so many cases, the real row was over costs. CTIL said they had won because they got their site survey on the terms they originally asked for. They had come to the Tribunal to achieve that, so they should get their costs.

The first respondent sought its costs on the basis that they had agreed the original site survey request and the only issue was the £10 million indemnity, which CTIL had accepted.

Responsibility for the level of costs

The Tribunal agreed that the first respondent’s response querying the need for the full extent of Code rights was perfectly reasonable. However, the first respondent was criticised for not waiting for an explanation and adopting   a confrontational tone, together with making unnecessary demands for technical information. Such demands had not been considered necessary when the basic site survey terms had been agreed.

The Tribunal decided that the standoff had been caused  by CTIL gold plating its access requirements and the obstructive approach of the first respondent. The second respondent also sought its costs stating that it could not grant access when the freeholder was refusing it. The Tribunal did not agree that this was a correct reading of the legal relationship between the respondents and could not see why the housing association needed separate representation.

The decision

The Tribunal decided that the successful parties were the first and second respondents in the light of the agreement reached. The fact of that agreement meant the Tribunal did not have to consider the respondents’ arguments to resist the granting of Code rights. However, in another warning, it confirmed that overly technical arguments about the form of Code notices would not succeed, in line with the decision of Cornerstone Telecommunications Infrastructure Ltd v Keast [2019].

Arguments about whether a Code agreement should be enforced were described by the Tribunal as “window dressing”, although CTIL can be said to have won that point, as the agreement reached conceded such rights should be granted.

The other main issue, apart from the indemnity, was how the rights of access should be expressed. The row was provoked by CTIL when they adopted a scattergun approach in asking for all Code rights. However, the Tribunal found the first respondent’s position“at best obtuse, and at worst deliberately obstructive.”

So, whilst the respondents were the successful parties,  the proceedings were conducted in a manner which was wholly disproportionate to the dispute. As such, although CTIL was ordered to pay the costs of the respondents, they were capped at £5,000 each. The overall costs were over £100,000 so it seems likely that only about 20% of the actual costs incurred by the respondents were recovered.

Tribunal’s conclusion

The judgment makes it clear that rows about surveys are unwelcome and if they have to be heard, recovery of costs on the scale incurred in this case will not be permitted.

However, landowners will welcome the Tribunal’s parting shot which is that unquestioning cooperation from property owners cannot be demanded. As the Deputy President observed, “the claimant’s wooing of potential site providers has become a little less rough, but its technique still has a long way to go.”