Telecoms: Site providers can claim consideration and compensation for MSVs
Upper Tribunal has established that there is no legal principle which prevents site providers from claiming both consideration AND compensation for MSVs.
The recent Upper Tribunal (Lands Chamber) decision in Covent Garden IP Ltd v Cornerstone Telecommunications Infrastructure Ltd offers important guidance regarding the consideration payable under Multi-Skilled Visit (MSV) agreements governed by the Electronic Communications Code.
The Original Claim at the FTT
Cornerstone, an Ofcom operator, sought interim Code rights to carry out an MSV at a high-value commercial property owned by Covent Garden in central London. In the usual way, the proposed MSV would allow a non-intrusive survey of the building to assess suitability for the installation of electronic communications apparatus.
Covent Garden, as site provider, sought an unusually significant consideration payment for the MSV of between5,000-£10,000 on the basis of the significant value of the building.
The increased consideration proposed was a marked departure from the industry standard of £1 (nominal consideration) for MSV agreements, which is paid in addition to specific compensation which the parties usually set out, by agreement, in the MSV and deals with any loss or damage caused by the exercise of the rights. The Upper Tribunal stated: “where a substantial building is involved, agreements will typically include the payment of fees to the building owner to cover the cost of approving risk assessments and the credentials of contractors, attendance during the surveys, providing an escort round the building, and providing plans or other documents or information required.”
The site provider sought to introduce expert valuation evidence late in the proceedings, to support its claim for higher consideration. The First-tier Tribunal refused this request and awarded that the consideration for the MSV agreement would be £1. Covent Garden appealed to the Upper Tribunal.
The Appeal at the Upper Tribunal (UT)
The Upper Tribunal found that while the First-tier Tribunal decision to refuse to permit the site provider to adduce expert evidence was given for the wrong reasons, it was nevertheless a decision which could and would have been reached if it had applied the correct reasoning on the facts of the case.
However, the Upper Tribunal did confirm that if a site provider wishes to adduce expert evidence in support of a claim for consideration, then it should be permitted to do so, although due to the limited nature of MSV Code rights it seems unlikely that more than nominal consideration would be granted.
The Tribunal also addressed the issue of costs. Covent Garden’s appeal against the FTT’s costs order was refused, and the Tribunal expressed concern at the high costs the site provider had incurred in what should have been a straightforward matter and when comparing the limited value of the consideration claim.
All parties should be aware of incurring disproportionate costs, particularly in respect of MSV agreements. In particular, site providers should be aware that the costs of dealing with a dispute will not automatically be awarded in their favour and the usual costs principles apply, especially if the Tribunal considers that a party is complicating simple negotiations for a document that grants limited rights.
Comment
Whilst the site provider was not successful in this appeal, and warnings have been made about costs, it will be interesting to see if there are any willing site providers that may use this case to test the finding that there is no legal basis that prevents site providers from seeking increased consideration, as well as compensation, for MSVs.
