Stuart Pemble considers a curious case where an adjudicator exceeded the powers available to him under the slip rule for correcting a decision.
Key point
The Technology and Construction Court has clarified what corrections can and cannot be made by an adjudicator under the slip rule
The ingenuity of challenges (mostly, like the one we are considering in McLaughlin & Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC), unsuccessful) to adjudicators’ decisions never ceases to amaze me, often throwing up some curious points for our judiciary to consider.
However, Adrian Willamson KC’s decision in this case may just be the most curious point for a number of years.
Paragraph 22A(1) of the Scheme for Construction Contracts (England and Wales) Regulations 1998 contains what is known as the slip rule, a provision which allows adjudicators (either acting on their own initiative or at the request of one of the parties) to correct a “decision so as to remove a clerical error or typographical error arising by accident or omission”
The facts
On 31 October 2023, an adjudicator ordered L (a sub-contractor) to pay M (the main contractor) £808,000 by way of damages for failing to meet key dates in a sub-contract (which related to fit-out work at an office in the City of London). In his covering email accompanying the decision, the adjudicator, using the specific language from the slip rule, asked the parties to notify him of any “clerical or typographical errors”.
It was the response from L’s solicitors which resulted in this judgment. They challenged the adjudicator’s findings of fact, arguing that a previous valuation by M had already deducted the damages (as well as an additional sum) awarded by the adjudicator, and that complying with the award would result in M being paid the same damages twice.
M’s solicitors invited the adjudicator to ignore the response on the basis that it did not deal with clerical or typographical errors and because the points raised were not agreed by both parties. They also suggested some minor corrections. L’s solicitors responded with further arguments. After another round of toing and froing, and four days after the original decision, the adjudicator issued a revised decision, qualifying his award with the words “if not already allowed”.
M applied to enforce the 31 October decision and L resisted. L’s two strongest arguments were that (1) the decision had been superseded by the revised decision and could not be enforced; and (2) even if the adjudicator made an error issuing the revised decision, it was an error within his jurisdiction and not one with which the courts should interfere.
It is unclear how often adjudicators use the slip rule, but it is fair to say that the application of the rule is rarely used as the reason for challenging a decision. It is rarer still for the challenge to come from the party that invited the adjudicator to make the changes.
Did the revised decision replace the original one?
To answer this question, the judge had to decide whether the revised decision fell within the slip rule in that it corrected a clerical or typographical error. Following the approach taken in Axis M&E UK Ltd v Multiplex Construction Europe Ltd [2019] EWHC 169 (TCC), the judge highlighted three phrases to support his view that the comments were not about clerical or typographical errors but “were properly characterised as “submissions” on matters of fact”: L’s “submissions in this regard”; “The final sentence of paragraph 84 is also factually incorrect…”; and “Clarity on this point is essential, particularly given that… [L]… may refer a dispute regarding Valuation 19 to adjudication.”
There was no clerical error in the first decision and the adjudicator erred in being persuaded by L that there was a matter of substance he had not originally addressed.
Was the adjudicator’s decision within his jurisdiction?
The judge felt that this was a trickier question and ultimately turned to a House of Lords decision on arbitration – Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43; [2005] PLSCS 125 – as applied, in an adjudication context, in O’Donnell Developments Ltd V Build Ability Ltd [2009] EWHC 3388 (TCC).
Both decisions emphasised that the difference between exercising a jurisdiction which does exist in an incorrect manner and exercising a jurisdiction which does not exist was a difficult one, which rests on the particular facts in issue.
In this instance, and accepting that he was bound by Lesotho, the judge held that the use of the words “if not already allowed” in the revised decision meant that the adjudicator was seeking to clarify or qualify his decision, and that was a power he did not have.
Other point
The judge also had no difficulty in dismissing the argument that M, by offering some limited clerical corrections of its own (at the invitation of the adjudicator) while at the same time seeking to rely on the original decision, was guilty of approbation and reprobation (otherwise known as the doctrine of election).
The principle is that a party cannot take an inconsistent stance by, in this instance, accepting some part of the adjudicator’s findings but challenging others.
While the judge accepted that a party cannot blow “hot and cold” in relation to an adjudicator’s award (a point made in the very first adjudication authority, Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] EWHC 254 (TCC); [1999] 3 EGLR 7), that was not what was happening here. All M was doing was complying (properly) with the adjudicator’s request for comments under the slip rule.
The judge enforced the original decision and I await with bated breath the next ingenious attempt to resist enforcement.
Stuart Pemble is a partner at Mills & Reeve
Photo © Aymane Jdidi/Pixabay
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