To err is human and, soon after the Construction Act was enacted, the courts sensibly recognised that a "slip rule" could be implied in adjudications to allow adjudicators to correct minor clerical and typographical errors in their decisions.1The slip rule has since been included in the Construction Act and the Scheme for Construction Contracts.2 However, as one defendant found to its cost in a recent case, asking the adjudicator to correct his decision under the slip rule could lose you the right to challenge the decision on jurisdictional or natural justice grounds.
In Dawnus Construction Holdings Ltd v. Marsh Life Ltd  EWHC 1066 (TCC), Marsh Life Ltd (the employer) employed Dawnus Construction Holdings Ltd (the contractor) to design and build a hotel and retail/restaurant units in Poole. The discovery of an incorrectly placed electricity cable delayed the works and pushed weather-sensitive work into winter creating further delays.
Various disputes arose and, in the fourth adjudication between the parties, the adjudicator awarded nearly £1 million to the contractor. Both parties sought corrections of the adjudicator's decision (the Decision) under the slip rule. The contractor's request related to a mathematical error, a fairly typical correction, which the adjudicator agreed to carry out thereby increasing the sum awarded.
The employer's request, based on various matters including alleged breaches of natural justice, suggested that the adjudicator had incorrectly awarded the contractor sums for loss and expense, overheads and profit which he had not intended to. The adjudicator rejected this request. Subsequently, the employer did not pay the sums due under the Decision and the contractor started enforcement proceedings in court.
In resisting enforcement, the employer challenged the Decision by claiming that the adjudicator, in breach of natural justice, had not dealt with some of its defences. In response, the contractor argued that by asking the Adjudicator to correct errors in the Decision under the slip rule, the employer had accepted the validity of the Decision and thereby waived its right to make a challenge. Crucially, the contractor highlighted the employer's failure to reserve its rights to challenge when making the slip rule request. HHJ McKenna thought this an important point of principle. If the claimant was right, the employer's natural justice challenge would fall at the first hurdle.
The judge reviewed the case law relating to "the doctrine of election [which] prevents a party from 'approbating and reprobating' or 'blowing hot and cold' in relation to an adjudicator's award" and concluded:
"having regard to all the circumstances of the case, by inviting the Adjudicator to exercise his powers under the slip rule, in my judgment, [the employer] waived or elected to abandon its right to challenge enforcement of the Decision since it had thereby elected to treat the Decision as valid. It cannot be right that in such circumstances it is open to a party to an adjudication simultaneously to approbate and to reprobate a decision of the Adjudicator."
The employer argued that it might have waived its right to a jurisdictional challenge but not one based on natural justice. This distinction was dismissed by the judge as "conceptually unsound". "It presumes that there is a clear distinction between excess of jurisdiction and breach of the rules of natural justice when, in reality, there is often no such clear distinction, with challenges frequently being framed in the alternative." The employer could have but did not reserve its rights when requesting the correction. Either the whole of the Decision must be accepted or the whole contested. As a result, the Decision stood and the contractor was entitled to summary judgment.
As it happened, the judge went on to confirm that the adjudicator's decision that the contractor was contractually entitled to loss and expense meant the adjudicator had dealt with the employer's claims and arguments in defence. It seems the judge was effectively concluding that he would not have found the adjudicator to be in breach of natural justice anyway.
- The effect of the employer's failure to reserve its right to challenge is a warning to other parties faced with an unwelcome adjudication decision. Handling an adjudication is a demanding process. The timetable is short and there is often a substantial amount of work involved. Following intense immersion in the facts and the arguments of a dispute during the adjudication process, parties' and their representatives' emotions can ride high after reading the adjudicator's decision. It is important to digest the decision and, if it is not what was expected, to consider carefully whether there are any grounds for a challenge, how best (and whether) to make the challenge and the potential consequences.
- Parties who want to challenge a decision should expressly reserve their rights to do so if requesting the correction of errors under the slip rule.
- Challenges based on a breach of natural justice or exceeding jurisdiction should not be hung on a request for a correction under the slip rule: they are likely to be rejected by the adjudicator and if, as in Dawnus, no reservation of rights has been made, the right to challenge could be lost.
- The hurly-burly of the adjudication process can affect the adjudicator too. The slip rule is an important safety net that enables minor, obvious errors to be corrected without the parties undergoing the expensive process of challenging the decision. That said, even where the adjudicator has the power to correct an error, they must be careful not to fall outside the slip rule – and therefore their powers – when making the correction (as happened in NKT Cables A/S v. SP Power Systems Ltd  CSOH 38, a Scottish case).
- Be aware that the scope of the slip rule is limited and can only be used on fairly narrow grounds to correct genuine mistakes or accidental errors within five days of delivery of the decision to the parties. The more complex the proposed correction, the less likely it is to fall within the definition of a slip capable of being corrected. While the NKT case is a Scottish case, Lady Wolff's commentary on errors that can be corrected is worth repeating:
"the scope of the slip rule is confined to correcting a typographical or clerical error of something expressed within the four corners of the decision and which is apparent on the face of the decision. It is not warrant to correct what are more substantive errors, in the sense of a mistake of fact or law. Nor, in my view, is it warrant to correct a pure omission, being something that the adjudicator intended to include or take account of but which he has wholly omitted to in reaching his decision."