The courts have made it clear on many occasions that provided the adjudicator is acting within his jurisdiction the fact that he has answered the relevant factual or legal questions incorrectly, even if the error is mathematical, does not affect the enforceability of the decision.

The law and practice surrounding the slip rule is that in the absence of an express term to similar effect, there is an implied term in the adjudication agreement that the adjudicator may correct accidental errors and omissions: Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd (2000).

In the following case, there was an express slip rule provision. The case raised issues as to the extent to which the slip rule could be used by an adjudicator without causing unfairness between the parties. For the first case between the parties please see our December 2009 updater.

Rok Building Limited v Celtic Composting Systems Limited (No 2) [2010] EWHC 66 (TCC)

The contractor argued that the adjudicator acted unfairly and contrary to the rules of natural justice in his second decision between the parties. The issue between the parties was essentially whether or not the sub-contractor had completed its works by 8 June 2009. Completion of the sub-works would result in the release of half of the retention moneys and determine the extent to which liquidated damages were due to the contractor.

The sub-contractor issued a notice of adjudication on 2 October 2009. The adjudication was conducted in accordance with the CIC Model Adjudication Procedure, 4th edition, clause 28 of which entitled the adjudicator to “correct his decision so as to remove any error arising from an accidental error or omission or to clarify or remove any ambiguity”.

The parties served 15 witness statements between them.

The adjudicator found in favour of the sub-contractor that:

  • completion was achieved on 8 June 2009;
  • one half of the retention money was due to be paid by the contractor; and
  • the contractor should re-pay some of the liquidated damages it had wrongfully deducted together with interest for late payment.

Correction of errors

Upon receipt of the decision, the contractor asked the adjudicator to correct several typographical errors (which the adjudicator did). The contractor also asked the adjudicator to open up and revise payment certificate No 15 to reflect the adjudicator’s decision. If this was revised the contractor argued that little or no net sum would be due to the sub-contractor (since certificate No 15 had produced a negative balance which had never been paid by the sub-contractor). The contractor also asked the adjudicator to clarify, amongst other things, his failure to refer in his decision to incomplete work such as the absence of isolation joints and why the sub-sub-contractor’s incomplete work had not been considered relevant.

The adjudicator declined to deal with these on the basis that these were matters which went to the heart of this decision and were not covered in clause 28.

Slip rule and breach of natural justice

Enforcement proceedings were issued by the sub-contractor when the contractor failed to comply with the adjudicator’s decision.

The contractor sought to resist these on the basis that the adjudicator had failed to operate the slip rule so as to allow “natural justice and due process” because the adjudicator had made erroneous mathematical calculations and had disregarded or attached insufficient weight to the contractor’s evidence. The sub-contractor maintained that the adjudicator was acting within his jurisdiction and even if the adjudicator had answered wrongly or had misunderstood the factual position, this did not give rise to any inference that he had acted unfairly.

The court declined to consider whether there had been an error. The contractor had had the opportunity to present the payment position in a way which made the net entitlement clear to the adjudicator. If the adjudicator had made an error, even if it was a glaring and serious one, this should not affect the question of enforceability because:

  • The adjudicator reviewed the evidence and arguments with real care and attention. He applied significant weight to the contemporaneous documents. No proper criticism could be made of the inferences which the adjudicator drew about what the parties said and did when faced with diametrically opposed witness evidence.

The adjudicator did not fail to apply the slip rule correctly:

  • The parties agreed by clause 28 of the adjudication procedure that the adjudicator had a discretion to correct his decision either “to remove any error arising from an accidental error or omission” or “to clarify or remove any ambiguity”. He did not have a right to correct so as to wholly reconsider and re-draft substantive parts of his decision and in effect to change his mind on material points of principle.
  • The adjudicator was best placed to determine whether there was an accidental error or omission.
  • In so far as the adjudicator was invited to revisit his decision, there was nothing accidental in what the adjudicator had decided. The adjudicator was right to reject the suggestion that he should correct his decision as requested by the contractor.
  • It was not arguable to say that the adjudicator had acted unfairly or contrary to the rules of natural justice in refusing to correct his decision as requested by the contractor. The court noted that the contractor was not without a remedy - it could institute arbitration proceedings to produce a final correction on the state of the account between the parties.

The sub-contractor was entitled to summary judgment.

Editors’ comments

There have been several cases on adjudication and the slip rule and this case followed shortly after the decision in O’Donnell Developments Limited Ltd v Build Ability Ltd [2009] EWHC 3388 (TCC). In O’Donnell Developments the adjudicator accepted he had made an error and corrected a slip because he had made a deduction he did not intend to make. This had the effect of increasing the amount due to the sub-contractor.

In Rok the court took a robust approach to whether the adjudicator could be said to have acted contrary to the rules of natural justice in applying the slip rule. In O’Donnell Developments the court considered that the correction of the slip was within the adjudicator’s jurisdiction.

Both cases demonstrate that provided that the correction of the slip was to give effect to the adjudicator’s decision, was within the adjudicator’s jurisdiction to make and was not used by the adjudicator to change his mind on points of principle or give effect to the adjudicator’s second thoughts, then the court will be reluctant to interfere with the adjudicator’s decision on the correction of the slip.

View: Rok Building Limited v Celtic Composting Systems Limited (No 2) [2010] EWHC 66 (TCC)