The TCC has recently handed down a decision in the case of McLaughlin & Harvey Ltd v LJJ Limited, providing guidance on the “slip rule”.
In this case, the TCC finds that the adjudicator goes beyond the “slip rule” and quoted extensively from the case of NKT Cables A/S v SP Power Systems Limited, a case where Shepherd and Wedderburn acted for the successful defender.
Facts
MHL Ltd sought to enforce the decision of an adjudicator (given on 31 October 2023) (“the Decision”), which directed the defendant (LJJ Limited) to pay £808,000 within seven days. LJJ resisted enforcement because:
- The Decision was superseded by a revised decision given on 4 November 2023, (the “Revised Decision”), with the result that the Decision cannot be enforced.
- If the adjudicator erred in law in issuing the Revised Decision, this was within his jurisdiction and the court should not interfere.
- MHL cannot approbate and reprobate the Decision.
- MHL cannot enforce the Revised Decision.
LJJ made further submissions to the adjudicator following issue of the Decision on 31 October, claiming factual inaccuracies and errors regarding delay damages.
On 4 November 2023, the adjudicator issued his Revised Decision purportedly under the slip rule. The adjudicator said this was “to recognise the possibility that MHL’s submission may not be correct, a matter which my Decision did consider, it not being the intention to award a double recovery, an intention not clearly reflected in the wording of the Decision, I consider that the last sentence of paragraph 138 should be amended to read: “I have so stated ordering that , if not already allowed, […] the said sum be paid by LJJ to MHL within seven days of the date this decision…”.
MHL brought an action to enforce the original Decision of 31 October 2023.
The slip rule
The power to revise a decision is contained in the Scheme for Construction Contracts 1998 (as amended) at paragraph 22A(1), which states: “The adjudicator may on his own initiative or on the application of a party correct his decision so as to remove a clerical or typographical error arising by accident or omission.”
The TCC’s decision in this case referenced Lady Wolffe’s comments in the Scottish case of NKT Cables A/S v SP Power Systems Limited. The court in that case held, in summary:
The scope of the slip rule under regulation 22A of the Scheme is relatively narrow. It enables an adjudicator to correct a decision to remove a clerical or typographical error arising by accident or omission. The slip rule is not directed to pure omissions, i.e. something that an adjudicator meant to do but by some oversight, forgot to do.
A clerical or typographical error is an error in the expression or calculation of something contained within the decision. This can include an arithmetical error in adding or subtracting sums, mis-transposing parties' names, a slip in carrying over a calculation from one part of the decision to another, or the mistaken insertion of a rogue number. It does not include an error going to the reason or intention forming the basis of the decision.
This kind of slip (clerical or typographical) is a result of accident or omission. This points to correction of slips or mistakes in expression, rather than changes to the reasoned or intended basis of the decision, such as mistakes in fact and law. It does not permit correction of a pure omission, being something that the adjudicator intended to include or take account of but which is wholly omitted in reaching the decision
The slip rule is confined to corrections of the adjudicator's first thoughts and intention. Were the scope of the slip rule broader, i.e. to include corrections of pure omissions or to give effect to second thoughts or intentions, it could undermine the interim finality of adjudicators’ decisions, which is a feature of adjudications under the Scheme.
The decision of the TCC
The TCC was satisfied that the adjudicator’s approach in the present case went beyond what an adjudicator can do under the slip rule. In particular, the addition of the words “if not already allowed” served to convert a straightforward determination that a sum of money should be paid within seven days by LJJ into a mere declaration that a sum was due, subject to an investigation of other transactions between the parties.
The power that the court had to consider was the power of the adjudicator “to remove the clerical or typographical error arising by accident or omission”. However, what the adjudicator did here was instead to seek to clarify or qualify the decision. The slip rule does not permit this.
Held
The TCC determined that the adjudicator’s Revised Decision went beyond the slip rule, so the Decision of 31 October stood and MHL were entitled to summary judgment to enforce the Decision which awarded payment of £808,000.
Key take aways
- This case reaffirms that the use of the slip rule will only be permitted in limited circumstances where true clerical or typographical errors occur.
- The slip rule covers mistakes of expression, rather than changes to the reasoned or intended basis of the decision.
If you or your business would like to find out more, please contact Iain Drummond or Lindsay Robinson or any member of our Construction and Infrastructure Disputes team.
This article was authored by Senior Associate Lindsay Robinson.