Contractual Liability of Telecoms Operators

In PG Lewins Limited v. (1) Hutchinson 3G UK Limited and (2) EE Limited2018 (PG Lewins ltd) the Courts made a significant decision regarding the statutory rights of Telecoms Operators.

The verdict means that if telecoms Operators fail to comply with their contractual obligations they are no longer able to use their statutory powers to avoid liability for claims made against them by landowners. These statutory powers are contained in the Electronic Communications Code (sch.2 Telecommunications Act 1984) (Old Code).

In PG Lewins ltd the Claimant and the Operators entered into a good faith contractual agreement, whereby the Operators agreed to temporarily relocate some equipment in several stages. The relocation was delayed and the Claimant complained that the Operators had breached the contract and therefore the Claimant had suffered a loss. The equipment was subsequently relocated, however the Operators claimed that they were not in breach, nor were they liable for damages, due to the protection provided by the Old Code.

The Judge reached his decision against the Operators by finding that the relocation agreement between the parties set out the circumstances in which the Operators would be given protection under the Old Code. He cited para.2(5) (a Code right can only be used in accordance with the terms by which it is conferred) and para.27(2) (the exercise of Code rights shall not inhibit any rights or limitations arising under any agreements that the Operator is party to) of the Old Code in support of this.

The Operators also cited para.21 of the Old Code, which prevents landowners from forcing Operators to remove telecoms equipment. However, the Old Code contains an “alterations” exception to para.21, contained in para.20. The Judge decided that a “removal” did not include merely detaching and relocating the equipment, and therefore relocation came under the “alterations” exception in para.20.

The final point to consider was that, under para.27(3) of the Old Code, the Operators argued that their statutory powers meant their refusal to relocate the equipment was lawful and in line with the powers granted by the Code. However, Recorder Sharp disagreed and supported the Law Commission’s view that where an operator was in breach of their obligations, to which exercising a right is subject, the operator cannot be said to be lawfully exercising its rights.

Permission to appeal was refused.

The decision made here also applies to sch.3A Communications Act 2003 (the New Code), meaning it still has teeth under the new legislation and should encourage a more cooperative relationship between developing landowners and telecoms operators in the future.

For further information on this subject, contact Frank Smith & Co Solicitors on 01242 801748

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