For better or worse, adjudication is a "rough and ready" form of justice. Mistakes in decisions inevitably occur. Sometimes the mistake results from an adjudicator's mathematical error in his calculation of the sum to be paid. The orthodox view for many years has been that such an error cannot prevent the enforcement of the adjudicator's decision by the courts. This view is now under threat in the light of the recent judgment of Edwards-Stuart J in Geoffrey Osborne Ltd v Atkins Rail Ltd  EWHC 2425 (TCC).
This orthodox view was set in stone by the Court of Appeal's decision in Bouygues v Dahl-Jensen some ten years ago. The Court of Appeal held that an adjudicator's decision will be enforced by the courts regardless of whether the adjudicator was wrong in law or fact. The error in that case was the adjudicator's failure to take retention monies into account in calculating the sum due. The Court of Appeal declined to correct the error on the basis of the Construction Act's "pay now, litigate later" policy. The paying party's remedy was a final determination of the issue in subsequent court or arbitration proceedings.
The adjudicator in Geoffrey Osborne made a similar type of error. He made a decision on the merits as to the sub-contractor's monetary entitlement in respect of its claims. However, he failed to take into account the payments in respect of those claims which the contractor had credited to the sub-contractor in a previous interim certificate. If he had taken the payments into account, no sum would have been payable.
The sub-contractor brought court proceedings to enforce the decision. The contractor applied for declarations from the court that the adjudicator erred in deciding that a sum was due to the sub-contractor and that his decision should therefore be set aside.
Edwards-Stuart J was quick to reject the contractor's contention that the adjudicator had no jurisdiction to make his mistaken decision for the same reason as the Court of Appeal in Bouygues. Whilst the adjudicator was wrong in law and/or fact to have awarded a sum to the sub-contractor, he could not be said to have answered "the wrong question".
Edwards-Stuart J nevertheless did set aside the decision by way of declaration on the basis that he could and should make a final determination of the issue. His determination was that the adjudicator was wrong in law because his decision did not reflect the sub-contractor's true legal entitlement.
Edwards-Stuart J noted that it is settled law that the court may make a final decision on an issue decided by an adjudicator if it does not involve any substantial factual dispute and can be decided on the available material. This raised the question of how such an approach can be reconciled with the Court of Appeal's decision in Bouygues. The judge's reasons as to how they can be reconciled explains why the orthodox view is now under threat.
The contractor in Bouygues, as in Geoffrey Osborne, applied for a declaration. The declaration it sought was, however, that the adjudicator's decision was void for lack of jurisdiction. The sub-contractor applied to stay the application to arbitration on the ground that the sub-contract contained an arbitration clause. The Court of Appeal did not, however, find it necessary to deal with this application because of the failure of the contractor's application for a declaration.
The first reason given by Edwards-Stuart J was that the contractor in that case, unlike in Geoffrey Osborne, did not seek the court's final determination on a point of law or fact decided by the adjudicator. The second reason was that he was able to make a final determination because the sub-contract did not contain an arbitration clause. If it had, the issue would have had to be decided in arbitration.
The message is clear for paying parties faced with an adjudicator's decision containing an obvious mathematical error. Edwards-Stuart J has handed them a lifeline for successfully opposing the decision's enforcement. The way is potentially open for them to seek the court's final determination by a declaration rectifying the decision; but only if the contract does not contain an arbitration clause.
Does the decision of Edwards-Stuart J mean that the orthodox view is destined for legal oblivion? The answer to that question depends on whether his reasoning is accepted by judges in future cases. We await the answer with anticipation.