Baroness McIntosh of Pickering:

Moved by Baroness McIntosh of Pickering

25: Clause 68, page 58, line 38, leave out from “must” to “one” in line 39 and insert “use”Member’s explanatory statementThis amendment is to ensure that operators engage in the alternative dispute resolution process by making it mandatory.

My Lords, I am grateful for the opportunity to raise what is quite a difficult situation in Amendments 25, 26, and 27. What I seek to address here is the fact that while it is welcome that there is an alternative dispute resolution process, it would be preferable that this was mandatory. I would also like to raise other issues, such as the imbalance between the funds available to operators bringing such a case and to landowners, who may be of quite modest means and modest size in being able to defend against such actions.

I welcome the inclusion in the Bill of an alternative dispute resolution mechanism. Could my noble friend the Minister take this opportunity to explain why it is merely optional for operators to use it, given—as I referred to a moment ago—the disparity in resources between operators and landowners in many cases? Is he not concerned that the incentive to use such an alternative dispute resolution mechanism for operators is low, given that they have the resources to take potentially multiple landowners to tribunal? Also, while the overall market for new sites for masts has slowed down, some small landowners have been unable to afford the cost of being taken to a tribunal to seek to defend their property rights. They have essentially been forced to agree to host mobile apparatus on unfavourable terms.

I propose Amendments 25, 26 and 27 to make it mandatory for telecoms operators to engage with an alternative dispute resolution mechanism before threatening to take a landowner to court for an agreement to be imposed. I beg to move.

My Lords, I strongly support these amendments, to which I have added my name. As I have said, I am a litigator, and it is a tremendous help to get parties together in some form of alternative dispute resolution before a matter is litigated. Compelling ADR as step 1 in an escalating dispute is common, and indeed is often to be found within contractual obligations themselves, particularly between parties of disparate size and resource. Given all that has been said about the fractious and broken market, and the huge number of disputes that are occurring, the more that can be done to head these off before litigation costs escalate, the better.

I was referred to a decision this morning of the Lands Tribunal where a lease negotiation had been settled at the door of court: the decision focused only on the issue of costs. The tribunal awarded £5,000 in costs, but the total bill was over £100,000. Litigation costs can be huge and, as the noble Baroness, Lady McIntosh, has indicated, that can keep small site owners out of litigation: they have to just roll over. ADR can occur in the form of mediation, arbitration or simply expert determination on a specific technical or legal issue in contention. It is key to greasing the wheels of these challenging transactions and, given the difference in size and resource between site owners and telecoms operators, it would be most helpful.

My Lords, I was in two minds about these amendments, but I will support them in the final analysis. ADR is of course a good thing if it avoids lengthy and costly court proceedings. My concern is that it can also become a token activity, backed by the threat of subsequent court action to intimidate site owners, reflected in the inequality of arms between the parties, which others have already referred to.

I would greatly prefer an outcome where disputes can be resolved between the parties, and perhaps their respective agents, where the balance of negotiation is fair. I made a proposal in my earlier remarks on this, to which I have received no response.

The Bill, as drafted, sets site owners and operators needlessly on a collision path. No disputes will be resolved; they will simply be won by brutal compulsion that will lead to delay and protracted proceedings. If the Bill goes ahead as is, ADR should be mandatory as a first step in at least seeking some resolution. I therefore support the amendments in this group.

The view of these Benches is that throughout the passage of the Bill it has been clear that a strong case has been made for better protection for landowners against the power of telecoms operators. However, the ADR process that the Government are providing under Clause 68 is non-binding. Telecoms companies need to show only that they have considered it to avoid costs. This will not make them engage with the spirit of the process, and we expect telecoms companies to take matters to court as quickly as possible instead, with all the consequences that entails of costs on both sides.

As the noble Baroness, Lady McIntosh, stated, to address this the Government should make ADR compulsory for any dispute and issue guidance about reasonable terms. Properly enforced, we believe it would reduce operators’ reliance on litigation through the courts, which sometimes takes the rather oppressive form of threats, and encourage better behaviour by both parties. Given the potential benefits to both parties and the wider public interest, it is difficult to see the case for this process remaining advisory. In principle, we very much support Amendments 25, 26 and 27, so well advocated by the noble Baroness, Lady McIntosh, the noble Lord, Lord Cromwell, and the noble Earl, Lord Devon.

My Lords, this has been an interesting short debate. It was an interesting debate in Committee and I congratulate the noble Baroness on retabling her amendments. I do so because I am not completely convinced by the Government’s arguments here. There are real concerns from some that the tribunal system favours operators due to the experience and size of their legal teams. They are very powerful organisations and we should not overlook that. The legal system is there to protect all from overweening power. I understand that the ADR system is intended to prevent cases going to tribunal and court, with all the costs that come with that, and, given the timescales involved, there is clearly a benefit to reaching agreements under an alternative framework. However, if it is voluntary, where is the incentive for its use?

I shall ask one final question; I think this is the most important point. If ADR as a voluntary means of dispute resolution does not work, what will the Government do? Will they step in again and reconsider this issue? Will they give careful consideration to making it mandatory, because then it would have a more powerful effect?

I do not think this issue will go away. I do not find the Government’s arguments entirely compelling and the noble Baroness has made a very good case. I look forward to hearing what the Minister has to say.

I thank my noble friend Lady McIntosh for this amendment and for explaining making ADR—alternative dispute resolution—compulsory so eloquently. Where there is disagreement, it is always good if there can be a mechanism, but we have to remember that ADR is not one sort of ADR. There are many different types, which I shall go into.

I shall reiterate the Government’s position of not supporting the approach and supply more information that I hope will convince your Lordships that these amendments are not only unnecessary but could be actively counterproductive. As my noble friend Lord Parkinson mentioned in Committee, ADR not being mandatory is a deliberate policy choice, made for the following reasons. First, where ADR is appropriate, mandatory ADR would compel some parties to participate in a process in which they do not want to be involved, which would make them less inclined to engage actively. This would increase the risk of failure and the parties would then have to go to court anyway. It would serve only to add an additional layer of time and cost to landowners.

On this point, I return to my noble friend Lord Parkinson’s previous comments highlighting the counter- productive incentives that mandatory ADR risks creating. There are many types of ADR with different formats, timescales and costs. For example, mediation and arbitration are both types of ADR. In a situation where mandatory ADR has forced a party into ADR against its will, the party may seek an inappropriate form of ADR to frustrate the process and force the matter to proceed to court. This would result in the parties incurring additional time and costs for no practical benefit.

Secondly, some forms of ADR, such as judge-led mediation or judge-led early neutral revaluation, both of which I understand are offered by the land tribunal, are available to parties only once proceedings have been issued. Therefore, making ADR mandatory before proceedings have been issued would prevent parties engaging with these types of ADR.

Finally, ADR may not be suitable in certain cases. For example, where a disagreement is based on different interpretations of the law, this would have to be determined by a court. Mandatory ADR would add cost and time to this process without any real benefit.

On this point, I should draw your Lordships’ attention to Section 119 of the Communications Act 2003. This creates a power for Ofcom to give assistance to parties, excluding operators, in relation to proceedings under the code. In particular, this power highlights that such assistance may be given on the ground that the case raises a question of principle. This power further demonstrates the potential for cases to arise that are based on a question of principle and need to be determined by a court. In such a scenario, mandatory ADR would do little to resolve the point in dispute. In addition, this power should, I hope, help reassure the noble Lord, Lord Clement-Jones, who in Committee argued that operators’ ability to use the courts in general is far greater, befitting their corporate size. Section 119 shows that measures are already in place to redress any such imbalance, and the provisions encouraging the use of ADR will, without further amendment, help this by reducing the need for cases to proceed to court.

When analysing responses to the public consultation, the department found that a clear majority of groups that gave views on compulsory ADR opposed it. Among the responders was the Royal Institution of Chartered Surveyors which noble Lords will acknowledge is expert in this field. Indeed, it is devising an ADR process of its own for use in code disputes. It advised that the optimal outcome is agreement reached through consensus. Leaving control of the process to the parties will assist in building trust in the system and thereby enhance potential take-up. I hope this additional detail will persuade some noble Lords that this amendment will achieve the opposite of its intended effect, disincentivising participation in ADR and potentially increasing the cost for site providers for little or no benefit.

Perhaps I should repeat that Clause 68 sets out the two new requirements on both parties and one new requirement for courts. First, when a notice is sent requesting rights under the Electronic Communications Code, the notice must inform the landowner of the availability of ADR and that, if parties are unable to agree, they may proceed with ADR. Secondly, operators must consider using ADR before applying to the courts in cases where an agreement cannot be reached. If the matter relates to the renewal of an agreement which has expired or is about to expire, either party must consider ADR before applying to the court. Finally, when awarding costs, the court is required to take into account any unreasonable refusal to engage in ADR by either party.

It is for these reasons that the Government maintain their opposition to mandatory ADR. I hope my noble friend will withdraw her amendment.

My Lords, I thank the noble Earl, Lord Devon, and the Benches opposite for their support for these amendments. I have to confess that I am disappointed by both the tone and the content of my noble friend’s reply. I think it goes to the heart of earlier groups where we, I think successfully, set out across the House the fact that there is a serious imbalance in the relations between the parties concerned, which will only become worse, given that the operators are going to have even more means and resources at their disposal.

I hope my noble friend will accept that, even where there is permissive procedural provision to achieve a change in behaviour, it will probably be only through mandatory—or, in the word of the Liberal Democrats opposite, compulsory—arrangements that we shall see a change. I think I have made the point as forcefully as I possibly can. I do not see that my noble friend is going to agree to these amendments, but I hope that he and his department will consider this going forward. I beg to leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendments 26 and 27 not moved.