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When is a ‘Slip’ Not a ‘Slip’
No this is not an article about cricket.
I refer to Adjudicator’s slips (accidental errors or omissions or ambiguities), the fair use of the Slip Rule by an Adjudicator and enforcement of Adjudicators decisions in the Courts.
What is the ‘Slip Rule’?
For the purpose of adjudication, and in the absence of express terms in the adjudication agreement, which prescribes an Adjudicator’s powers to correct a ‘slip’, a term will be implied to permit the Adjudicator to correct an accidental error or omission or to clarify an ambiguity.
There have been two recent cases decided in the Technology and Construction Court, both dealing with different aspects of the Slip Rule in Adjudication. Both cases involved the enforcement of Adjudicators Decisions.
The first of these cases is O’Donnell Developments Ltd (O’Donnell) -v- Build Ability Limited (BAL), which involved the enforcement of two Adjudication Decisions.
The second of the cases is Rok Building Limited (ROK) -v- Celtic Composting Systems Limited (No 2) (Celtic).
The two cases noted above raise interesting and important questions in respect of the use of the slip rule.
In O’Donnell Mr Justice Ramsey had to consider
‘how far a court can interfere with an Adjudicator’s exercise of his power under the Slip Rule’
In Rok, Mr Justice Akenhead had to consider
‘the extent to which one can infer an unfairness on the part of an Adjudicator where he or she may have gone seriously wrong and in the circumstances in which an agreed Slip Rule may be used by an Adjudicator with or without an appropriate level of fairness’.
The issue in the O’Donnell case followed nine adjudications between the parties involving disputes in relation to interim valuations, extensions of time and loss and/or expense.
In essence, in arriving at his decision in Adjudication 8A the Adjudicator had asked the parties for the total sum O’Donnell had been paid up to valuation No 25. The parties both provided a figure which but for a few pence were the same figure. The Adjudicator used the figure to calculate the net amount to be paid by BAL to O’Donnell.
The problem arose due to the fact that within the figure for payments made was a figure of £148,468.67 which BAL had paid to O’Donnell as a result of the Adjudicator’s Decision in Adjudication No 7. That sum did not relate to Valuation No 25 and should not have been taken into account. The Adjudicator therefore inadvertently reduced the amount he intended to award O’Donnell by £148,468.87.
O’Donnell pointed out the slip to the Adjudicator who corrected his decision under the ‘Slip Rule’. BAL refused to pay that sum in particular.
BAL argued that ‘it was only if the parties in effect agreed on the slip that the Slip Rule could be applied and BAL also argued that the Adjudicator had not made a slip at all because he had acted on the information supplied by O’Donnell which mistakenly included the sum paid in respect of the decision in Adjudication No 7.
Mr Justice Ramsey did not find favour with either of BAL’s arguments and awarded O’Donnell the £148,468.87 to be paid by BAL, together with costs.
The issue in the ROK case is that Celtic refused to pay ROK the sums decided by the Adjudicator, on the grounds that the Adjudicator had ‘ ..acted unfairly and contrary to the rules of natural justice .. insofar as he .... did not operate the Slip Rule properly or so as to allow ‘natural justice and due process’.
In essence Celtic claimed that ROK had misled the Adjudicator in relation to the sums which Celtic had previously paid to ROK. Celtic drew the errors in ROK’s figures to the attention of the Adjudicator following issue of his decision. Celtic argued that the Adjudicator could and should have used the ‘Slip Rule’ to correct his decision taking into account the amount which had actually been paid to ROK.
The Adjudicator declined to consider Celtic’s representations on the basis he did not consider the point raised by Celtic to be a clarification of a simple mistake or ambiguity.
Mr Justice Akenhead decided that even if there had been a glaring and serious error in the decision on the part of the Adjudicator, he had not acted contrary to the rules of natural justice in declining to use the Slip Rule to correct same.
Mr Justice Akenhead also stated ‘It is not necessary for Adjudicators in their decisions to give reasons as to why they found some evidence compelling and other evidence not’.
In summary, it is advisable to inform Adjudicators of the correct payment position. In circumstances where further interim payments are made during the course of an Adjudication it is advisable to make the Adjudicator aware of same.
The Courts appear to be taking a narrow view of claims for ‘unfairness’ and ‘lack of natural justice’ when dealing with enforcement of Adjudicators decisions. It is unwise to seek to rely upon such claims in trying to avoid making payment of such decisions.
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