First-Tier Tribunal addresses disproportionate legal and professional costs in UK Code litigation

 A recent decision by the First-Tier Tribunal (FTT) concerning the Electronic Communications Code has addressed the issue of the increasing costs of negotiating a Code agreement for a multi-skilled visit (MSV) was addressed. 

The case, Cornerstone Telecommunications Infrastructure Limited v St Martins Property Investments Limited, addressed the legal and professional costs sought by a site provider, St Martins, following the negotiation and imposition of an MSV agreement permitting Cornerstone, a licenced operator under the Code, to undertake an MSV of the roof of the building at 1 London Bridge, owned by St Martins. 

While the parties were ultimately able to agree the terms of an MSV agreement, they were unable to agree costs, given the significant and what the tribunal found were disproportionate sums claimed by St Martins for the negotiation of the MSV agreement. 

Decision on costs

St Martins sought legal and professional costs of £142,243, which were described by the tribunal as an "extraordinary" sum given the points in issue, the straightforward nature of the MSV agreement and the level of negotiations between the parties. 

The FTT declined to award St Martins the sums claimed and ordered significantly reduced cost, totalling only 22% of the total sums claimed. 

Proportionality and reasonableness 

The tribunal called for proportionality and reasonableness and reinforced the cost warnings given in earlier Upper Tribunal and FTT cases. It highlighted the importance of conducting the negotiation of MSV agreements within a reasonable budget to avoid frustrating the objectives of the Code and emphasised the following additional points:  

• Proportionality. Costs incurred should be proportionate to the issues at hand. The tribunal described the costs sought by St Martins as "simply astonishing", "extraordinary" and that the costs "far exceeds what is reasonable".
• Reasonableness. The tribunal reiterated that site providers are entitled to recover reasonable legal expenses, but stressed the need for reasonableness and noted that not all of the costs incurred by a site provider will automatically be considered to be reasonable. The tribunal also cautioned against the use of multiple or larger teams of solicitors working on a matter which, in this case, "caused unnecessary duplication and is unreasonable."
• Agent's costs. St Martins claimed the cost of appointing a specialist telecoms agent. The tribunal found that the decision to instruct the telecoms agent was unreasonable and had no value, as the appointment was not required in the case. Consequently the costs incurred by the agent were deemed unrecoverable.  

Osborne Clarke comment

The decision serves as a helpful reminder of the importance of proportionality and reasonableness when it comes to costs and reinforces the earlier warnings given by the tribunal that a site provider does not enjoy an automatic entitlement to recover all of its incurred costs under the Code. 

Equally, the decision emphasises the need for site providers and their solicitors to manage costs and professional expenses sensibly and effectively, to cease instructing professional advisors, such as specialist telecoms agents, that add little to the points in issue and ensuring that matters are dealt with by a streamlined team who avoid unnecessary complexity in what should be a straightforward matter. 

This decision is likely to drive further the streamlining of negotiations for MSV agreements. This will help avoid all parties incurring unnecessary and disproportionate expense, and stop the needless and disproportionate involvement of specialist telecoms agents, as well as heavily discourage parties from becoming embroiled in protracted negotiations for what are simple and time-limited rights.

Josephine Endacott, a paralegal at Osborne Clarke, contributed to this Insight.