In On Tower UK Ltd v AP Wireless II (UK) Ltd the Upper Tribunal (Lands Chamber) considered the health and safety implications for site providers where electronic communications are operated on their land, whilst determining a number of terms in dispute across three sites.

In particular, the UT considered the safety principle in a context where the site provider had no physical presence at the sites. The UT considered whether the business relationship between the landlord and tenant should be taken into account in the determination of this point.

This case provides useful clarification for those acting for site providers who are, like APW, aggregators of telecommunication sites whilst negotiating new agreements. For those in need of a reminder, telecom aggregators have established agreements with local telecoms providers and resell their services and typically offer the local providers those services at a discounted rate.

There is a risk if site providers do have control and management of the site, they could be exposed to any health and safety liability. Further, the points made on how experts should approach the valuation exercise under the code shall be useful for future cases.

Background

The claimant, On Tower UK Limited (“On Tower”), was a wholesale infrastructure provider. Typically, On Tower has licence agreements with mobile phone network providers. This case dealt with the renewal of three telecommunications agreements across three separate sites (Port Talbot, Huntington and Audley House (the “Sites”)). On Tower had operated the Sites, which were small ground level industrial sites for a number of years, each with masts and cabinets. The contractual term of the existing agreements had expired in respect of the Sites, and whilst the parties were not opposed to renewal, the terms of the new leases were in dispute (the “Renewal Leases”). On Tower’s immediate landlord, respondent and site provider pursuant paragraph 30 of the Electronic Communications Code (the “Code”), was AP Wireless II (UK) Limited (“APW”). APW is an aggregator of telecoms sites. In these circumstances, APW owns the long leasehold interests in the Sites.

The UT considered a range of disputed lease terms which were grouped as follows:

(1) Safety and access;

(2) Sharing and upgrading;

(3) Rights over the superior landlord’s land;

(4) Further provisions relating to the superior landlord; and

(5) Miscellaneous disputed terms.

Safety Issues

The responsibility for the safe operation of a site (the “Safety Principle”) was central to the business relationship between the parties and the arguments made throughout the hearing.

APW argued that there were clauses which should be included in the Renewal Leases to ensure that APW was protected from potential civil and criminal liability arising from the safe operation of the Sites (the “Proposed Safety Clauses”). The Proposed Safety Clauses included, by way of example, limiting On Tower’s access to the Sites during business hours and a requirement for On Tower to provide APW with the details of what it intends to do when it accesses the Sites, and the provision of identity checks and risk assessments for each and every visit. On Tower argued against the Proposed Safety Clauses, since they would cause delays, unnecessary costs and restriction in accessing the Site.

The UT’s starting position is that paragraph 25 of the Code provides clear policy that if something goes wrong as a result of the presence of the operator on the site, the operator compensates the site provider. As such, On Tower and the other operators using the apparatus at the Sites are exposed to civil and criminal liability. Further, in the draft Renewal Leases, On Tower had also agreed to additional contractual liabilities to APW.

The UT determined that the Proposed Safety Clauses did not need to be included as the Code does not suggest that a site provider who has let a site to an operator would incur civil or criminal liability for the operator’s actions on the site. UT highlighted that the key issue was control – does APW have control of the Sites and what happens on a day-to-day basis?

The UT considered that where operators are granted exclusive possession of the site, the site provider’s concern was “wholly unrealistic,” although the UT did comment that this would not necessarily be the case if the parties had agreed to terms which required the site provider to control, manage and supervise what the operator does at the site. The UT also dismissed APW’s arguments in respect of potential criminal liability under the Health and Safety at Work Act 1974 (the “1974 Act”), as activities on the site would not usually form part of the site provider’s “undertaking,” As APW has no right to be on the site and no right to control what happens there, then the operation is not part of its undertaking (i.e. business), even where APW is a professional site provider for electronic communications, and manages some telecommunications sites in its portfolio. It was noted however that in future cases, this principal shall be subject to (i) the scope of a site provider’s undertaking and (ii) the extent of its control at the site.

As a result of the above, the UT decided there was no basis for APW’s claim for detailed safety and control measures in the new code agreements.

Consideration

The UT also looked at valuation across the Sites. However, as the valuers agreed the compensation prior to the hearing, the figures agreed cannot be added to the Affinity Water table. The agreements reached were arrived at in the same manner as the Affinity Water table, i.e. using the three-stage methodology set out in Hanover. The UT maintained that comparable transactions are of limited assistance and indeed in these circumstances, useless. The UT said that where valuation evidence was needed, this ought to become simpler in future cases.

The judgment, which also deals with other disputed terms in the Renewal Leases, can be read in full at LC- 2021-240 and 309.pdf (tribunals.gov.uk).