The Lands Tribunal for Scotland has recently published its first decision under the new Electronic Communications Code, forming Schedule 3A of the Communications Act 2003 (as amended) (the “ECC”).

The decision in Cornerstone Telecommunications Infrastructure Limited v Thomas Steuart Fothringham LTS/ECC/2019/06 centres on the application of interim Code rights under Paragraph 26 of the ECC.

Most issues were already agreed by the parties by the time the Application reached its First Hearing, and it was accepted in principle that the tests in Paragraph 26 of the ECC had been met. There were therefore only three substantive issues to be determined before the Tribunal:-

1. Consideration

The Appplicants argued the appropriate consideration payable for the exercise of interim rights should be £252.70, assessed on the basis of the “no network assumption” set out in Paragraph 24(3)(a) of the ECC. The Respondents, on the other hand, assessed consideration in the sum of £4,200 per annum.

The Tribunal decided to meet in the middle and fixed consideration on an interim basis at £2,500 per annum. They added that nothing should be read into this though, and that compensation will be examined more fully as part of the Applicant’s Paragraph 20 Application for permanent Code rights.

The Tribunal also reinforced the approach taken to “no network assumption” based valuations by the Upper Tribunal (Lands Chamber) in England and Wales:-

“…the fact that there is, in reality, no demand for this site from anyone other than the applicants does not mean that the rental payable is only nominal, or little more than; see the second EE Limited v Islington decision ([2019] UKUT 53 (LC)) at para 84.”

2. Indemnity Clause

The proposed Code Agreement contained an indemnity clause. This obliged the Applicant to indemnify the Respondent for all claims and proceedings brought against the Respondent, arising from unlawful acts or omissions by the Applicant in the exercise of its Code rights.

The Respondent wanted to add wording to the effect that the indemnity clause would also be without prejudice to its claims for compensation under the ECC. The Tribunal were not convinced this was necessary, so the proposed insertion was rejected:-

“…we don’t think it serves any useful purpose. The distinction between rights under the Code and rights under the indemnity clause is clear enough, so we have deleted the proposed addition.

3. Tree-Lopping Rights

The interim Code rights sought by the Applicant included the right to lop or cut back any trees or vegetation on the Respondent’s land. The Respondent opposed this mainly on the basis that the rights sought were too wide, and that they did not in any event seem necessary, given the Applicant’s intention was to erect its mast at a higher elevation than the tree line.

The Tribunal was however persuaded by the Applicant’s position, even though the rights sought were over the entirety of the Respondent’s land:-

“We are satisfied that we should grant this right so that if interference from trees or vegetation becomes apparent in the course of trialling, or, for that matter, later, it can be dealt with expeditiously and without interruption of service.

The heightened mast of the new apparatus should minimise the likelihood of the right having to be exercised but it is a right which the Applicants should have in the interests of maintaining good quality telecommunication services to the surrounding area.”

Valuation of compensation under the ECC continues to be a hot topic, and it will be interesting to see how the Tribunal approaches this in the coming months once the Application for Paragraph 20 Code rights over the Respondent’s land is determined.

In the meantime, the present decision is an important one: not only because it is the Tribunal’s first decision published under the new ECC, but also because is probably the first formal indication we have that the Tribunal is inclined to follow the approaches and precedents already being set by our English and Welsh neighbours south of the border for ECC Applications going forward.

A copy of the decision can be found on the Tribunal’s website, accessible here.