There’s a certain air of mystery surrounding wayleaves for clients, with a common view being that when such a contract is required, or the process becomes “in wayleave” — a phrase I regularly hear from clients — that it’s akin to opening a black hole. There’s a belief that, if we’re lucky, a completed wayleave agreement might appear a number of months down the line but, on the other hand, it may be lost into the ether entirely.
Firstly, this isn’t an accurate perception of the approach to complete a legal agreement, and secondly, it often overlooks the importance of the wayleave — instead seen as just another obstacle to installation.
What is a wayleave agreement?
As a very brief overview, a wayleave agreement grants permission for an operator to install their apparatus on private land, governing the relationship between their organisation and the landowner.
These types of contracts are rarely completed overnight, with many factors to consider attributed to them. For instance, there may be two parties involved, or there could be five, and each of these stakeholders will have their own legal representation responsible for agreeing the best terms they can for their respective client.
As such, the more parties involved, the more time the process takes as each has to agree to the terms put forward by the others. Legal representatives will ordinarily report to their client on the proposed terms, and their client will need to agree, or perhaps further negotiation will be required.
Often, there are terms that can’t be agreed upon – usually because one party might insist on provisions that are above industry standard, or that are inconsistent with the provisions of the Electronic Communications Code (“the Code”). Generally, although wayleaves take a little time to complete from start to finish, in most cases they tend to require only a few hours of work.
The issue we’re becoming ever more aware of at Trenches is the uncapped legal fees that are quoted for wayleave agreements, which is becoming a big problem for telecoms operators.
For example, there are some firms who charge flat fees (net) of £2,000, and others that charge as much as £4,000, or more. When challenged on these exorbitant costs and a breakdown of the hourly rate of the solicitor and how many of these hours are required to reach the total is requested, firms are reluctant to impart this information, and the particulars are often clouded in secrecy.
It’s very rare that we receive a clear answer, and more often than not there’s some vague explanation of “this is our standard fee for dealing with wayleaves”. It’s also not uncommon to receive defensive answers that don’t substantiate the fees being charged. Instead, every step of the wayleave process is detailed, presumably to clarify that there are a number of actions involved.
A great example of some questionable items recorded in these breakdowns include “investigating whether the operator is a Code operator”. The work involved realistically takes only a few seconds to discover if, like many, you have the link to Ofcom’s public ‘Register of persons with powers under the Electronic Communications Code’ saved as a favourite in your browser.
This is why the level of secrecy associated with legal fees is neither justified, nor acceptable. To have reached a ‘fixed fee’, the anticipated amount of work had to have been known before it could be arrived at in the first place. So, why the secrecy?
Why is this a problem?
On one hand, it could be suggested that negotiating wayleave agreements can be lucrative work for law firms. On the other, the often huge cost associated can be the difference between an operator being able to afford to install their network, or not, as the case may be. This could mean that the government’s gigabit target is more difficult to meet, and that occupiers are not provided with their choice of telecoms services.
And it should be made clear that legal fees are only part of the full costs to an operator, they’ll also have their own expenses to pay for entering into a wayleave agreement, — such as the costs of surveyors, equipment, and installation. Where civils are involved, the figure can be even greater, until the total reaches many thousands of pounds just to connect a single property.
That’s why in the case of single dwelling units (SDUs), it’s often commercially unviable for an operator to pay this much, just for the return of a monthly subscription totalling around £30. The knock-on effect is that there will be many occupiers of properties that are effectively denied being connected to fibre because an operator simply cannot afford to install.
To provide some examples, a recent client was quoted an ‘initial’ fee of £2,500 for negotiating the terms of a wayleave agreement. Upon challenging, we were advised the amount could be reduced to £1,500 — evidencing that the actual costs are often much lower.
On the other end of the spectrum, we recently challenged fees of £2,000, but were advised that the time already accrued had almost reached this figure – and the draft agreement had not even been provided at this point. We were then informed that the time taken to correspond on the matter, in addition to some other admin type matters, had amassed further costs of almost £2,000, showcasing the arbitrary nature of applying rates in some law firms.
What’s the answer?
Unfortunately, at present, there’s no quick fix. However, the way forward is to challenge high fees when they’re presented. Even if an operator feels the fees are excessive but has decided to pay them, there’s nothing to be lost in questioning the amount.
Accepting disproportionate fees, and then only internally bemoaning them, sets a precedent that they’re acceptable. We’re of the opinion that it’s not admissible to charge £2,000+ (plus VAT) as a set fee for a wayleave agreement. I do believe it’s reasonable for a law firm to provide an hourly breakdown of their costs and the work involved.
How can things be done differently?
The solution is simple: charge fees by the hour — or even by the minutes in some cases. Therefore, if a very simple wayleave agreement takes just one hour to complete, the client should be billed for that amount of work, and no more. An alternative would also be a clear fixed-fee model, broken down into an inception fee and a success fee, or on a ‘charge per premise’ basis — a set cost that involves as much legal negotiation as possible.
What is key here is that law firms are fair and transparent when it comes to fees, so that operators are not priced out and can work towards full fibre roll-out across Britain, and assist the government in meeting its connectivity targets. Ultimately, operators unable to afford to enter into wayleave agreements fly in the face of future-proofing the UK’s infrastructure.
