MSV Caselaw Update

EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Hackney [2021] UKUT 142 (LC)

The Upper Tribunal (“UT”) has recently refused a landowner’s application to impose wide-ranging indemnity obligations on the operator in a multi-skilled visit (MSV) agreement.

In EE Limited and Hutchison 3G UK Limited (the “Operators”) v The Mayor and Burgesses of the London Borough of Hackney (the “Side Provider”), the Operators brought an application under paragraph 26 of the Electronic Communications Code (the “Code”) and sought the imposition of an agreement conferring interim Code rights at Shoreditch House in London.

The MSV agreement was largely agreed between the parties but there was a disputed term relating to how wide the indemnity given by the Operators to the Site Provider should be. The Site Provider sought to impose on the Operators a wide-ranging indemnity clause in the following terms:

“The [Operators] shall indemnify the [Site Provider] against all liabilities costs expenses damages and losses including but not limited to legal costs and all other legal professional costs and expenses suffered or incurred by the [Site Provider] arising out of or in connection with:

5.1.1 this agreement;

5.1.2 any breach of the [Operators’] undertakings contained in clause 3;

5.1.3 the exercise of any rights given under clause 2;

5.1.4 the enforcement of this agreement,

such indemnity to be limited to £10,000,000 (ten million pounds).”

The Operators were only willing to accept the indemnity clause if the indemnity was restricted to “third party” liabilities, costs, expenses, damages and losses. This would mean that the indemnity would not cover costs, expenses, damages or losses incurred by the Site Provider itself.

Under paragraph 23(1) of the Code, the UT is required to impose an agreement which gives effect to Code rights sought by the operator with such modification as it thinks appropriate. The UT is also given further discretion under paragraph 23(5) that the terms of the agreement must include terms it thinks are appropriate “for ensuring that the least possible loss and damage is caused by the exercise of the Code rights”.

The Side Provider argued that any claim in compensation could result in some irrecoverable costs, whereas this risk would be reduced if they had a wide-ranging indemnity. The UT was not convinced by the Site Provider’s submissions and held that indemnity should be limited to third party claims only.

The UT was influenced by the following factors in making its decision:

• The wide ranging indemnity requested by the Site Provider would side step the legal limitations for compensation. The UT noted that when Parliament designed the Code it saw fit to confer on site providers a right of compensation – not a statutory indemnity against all losses which would side step the need to establish causation, remoteness of damage and to mitigate loss.
• The OFCOM model form of Code agreement includes an indemnity clause limited to third party claims. The UT acknowledged that they are not bound by its model form of agreement, but nonetheless thought it should have regard to it.

Full judgement available here.

EE Limited and Hutchison 3G UK Limited v London Underground Limited [2021] UKUT 128 (LC)

In EE Limited and Hutchison 3G UK Limited (the “Operators”) v London Underground Limited (“London Underground”) the Upper Tribunal (“UT”) granted the Operators interim rights under paragraph 26 of the Electronic Communications Code (the “Code”) for an MSV to assess part of the London Underground for suitability for the installation of telecommunication apparatus, despite London Underground raising concerns about the potential security risks of granting access.

The Operators were seeking access to a network power control centre close to an existing roof top site that was due to be lost from the network. The Operators were seeking access through London Underground’s premises to a flat roof site on 48 hours’ notice for total period of three months. Each site visit would only last one hour.

London Underground contested the grant of the MSV siting inadequate access arrangements and potential security risks. London Underground claimed that it did not have the resources to properly supervise the site visits as this would divert staff from their normal roles and that allowing third parties access and knowledge of the London Underground could pose a serious security and sabotage risk to designated critical national infrastructure.

To grant interim rights under paragraph 26 of the Code the UT only had to be satisfied that the Operators could demonstrate “a good arguable case” that the conditions in paragraph 21 of the Code were met. This was a lower threshold than that laid out by paragraph 21 of the Code itself.

The UT decided that the Operators had made out a good arguable case and granted the interim rights. The access arrangements requested by the Operators would not expose the building to an appreciable risk of sabotage and the claim of a possible security incident was too remote and theoretical to amount to genuine prejudice.

Further, the security concerns and the requirement for supervised access were both capable of being addressed by imposing appropriate conditions on the terms of the access (security vetting) and by financial compensation at the Operators’ expense. Importantly, there was also high demand for telecommunications services in the area and the loss of the Operators’ nearby site would have a significant adverse impact on the general public.

However, the UT did note that the Operators should give consideration to the suitability of the site for long term permanent Code rights as the security concerns raised by London Underground could tip the balance of the prejudice test if the full paragraph 21 test was being applied.

Full judgment available here.

Co-authored by Mia Spedding