An Adjudicator is generally permitted to correct clerical and typographical errors in its decision colloquially referred to as the “slips” rule. However, what happens if an Adjudicator attempts to go beyond and attempts to correct an oversight or to qualify its decision. In McLaughlin & Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC) the High Court clarified that this is likely to be beyond the powers of the Adjudicator, as an Adjudicator is not permitted to adjust the content of the original decision if it has second thoughts over its correctness.
Facts
The Adjudicator issued a decision awarding just over £800,000 to McLaughlin & Harvey (“MHL”) and invited submissions on clerical or typographical errors. LLJ wrote to point out a number of alleged errors, related to the application of Key Date damages, which it said had already been deducted from the account. MHL submitted that LLJ’s submissions were factual in nature, and so should be disregarded by the Adjudicator.
The Adjudicator seemed to agree that the initial decision was at least unclear, and proposed to issue a Revised Decision, adding in the qualifier “if not already allowed” to the relevant part of his decision, so that the amount only had to be paid if had not already been accounted for.
MHL asserted that the amendments were outside the scope of the correction of clerical or typographical errors. Nonetheless, the Adjudicator issued a Revised Decision, incorporating the amendments.
Judgement
It was common ground that the error was not typographical in nature, and the High Court decided that a clerical error is limited to circumstances were a clerk or penman does not properly follow in the instructions of the author of a decision, which had not happened in this instance. Therefore, the Adjudicator could not have issued the Revised Decision under the slips rule.
However, that wasn’t the end of the matter, with Adjudication being rough justice, it now fell on the High Court to decide if the Revised Decision should be enforced anyway. This is because when it comes to enforcement, the courts are bound to enforce decisions which are given within jurisdiction even if they are wrong in law. Simply put, if the correct procedures have been followed, the decision should be enforced, and the correct avenue if it is wrong in fact or law is to have the matter heard again in court or arbitration.
Ultimately, the High Court decided that the Adjudicator exercised a power it did not have, and so the Revised Decision was not unenforceable. In doing so, stating that each case had to be considered on its own facts, because an Adjudicator “giving effect to second thoughts or intentions” would be outside of its jurisdiction. This was in line with prior case law preventing the application of the slip rule which was in fact a second consideration of the issues (YCMS Ltd v Grabiner & Anor [2009] EWHC 127 (TCC) and to distinguish from (Bouygues (UK) Limited v Dahl-Jensen (UK) Limited [2000] EWCA Civ 507) which had enforced a Revised Decision when that Adjudicator had given “proper effect to his first thoughts”.
Conclusions
The first key take away is that the issuing of an invalid Revised Decision does not also render the original Decision unenforceable. Which makes sense, but it is good to have confirmation.
The Judgement also reaffirmed that once a Decision has been issued, the Adjudicator is not entitled to have second thoughts, which applies even when the Adjudicator considers the original thoughts might have been wrong.
In electing to enforce the original Decision, the High Court confirmed the rough justice nature of Adjudication. The judgement made clear that if LLJ were right to say that the sum was already allowed in favour of MHL, it was not a ground to resist enforcement of a Decision requiring it to pay those amounts, rather arbitration or further adjudications were the correct avenues for those arguments to be heard.
Contact the adjudication experts here.
Published 30 April 2024
