Don't slip up when challenging a decision

Don't slip up when challenging a decision

Published:

Author: Michael Bennett

Applies to: England

The 'slip rule' contained in section 108(3A) of the Construction Act allows either party to ask an adjudicator to correct his decision so as to remove a clerical or typographical error arising by accident or omission.

Suppose that you want to resist enforcement of a decision on the grounds that an adjudicator did not allow you put your case to him, but you also want him to amend the figures in his decision (under the slip rule) so that you at least have some comfort if your overall challenge fails. Can you do that?

In the recent case of Dawnus Construction Holdings Limited v Marsh Life Limited [2017] EWHC 1066 TCC, Marsh Life were found to owe just over £1 million to Dawnus by the adjudicator. When the adjudicator's decision was issued, both parties sought to have errors corrected via the slip rule. In Marsh Life's case it asked the adjudicator to correct his decision based on the fact that he had not properly considered its case (not a matter for the slip rule in any event). The adjudicator refused.

Marsh Life did not pay the sums due to Dawnus (or for that matter the adjudicator's fees). When Dawnus sought to enforce the decision, Marsh Life reasserted that the adjudicator had failed to consider its arguments, in breach of the rules of natural justice. Dawnus responded that, by making an application under the slip rule, Marsh Life were deemed to have accepted the decision as valid. His Honour Judge McKenna agreed with Dawnus, holding that '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.'

Approbation and reprobation

Approbation and reprobation (or the doctrine of election) is, in the context of adjudication, a long established rule that a party cannot generally act so as to accept a decision in principle (e.g. by challenging it as to its arithmetic) and reject it (e.g. by arguing that it is contrary to the rules of natural justice). It has been applied in a number of situations, such as:

(i) Shimizu Europe Ltd v Automajor Ltd [2002] BLR 225 - Automajor sought to resist enforcement, but (a) had sought amendments under the slip rule and (b) made part payment of the adjudicator's fees. For both reasons, Automajor was found to have accepted the adjudicator's decision as valid.

(ii) PT Building Services Ltd v ROK Build Ltd [2008] EWHC 3434 (TCC) - PT was successful in an adjudication against ROK. However, due to some uncertainty in the decision, it referred a second adjudication on the same points. ROK argued in the second adjudication that the adjudicator had no jurisdiction as the matters were already decided. Therefore, it was held, it had accepted that the first adjudication was valid and binding.

(iii) Laker Vent Engineering Ltd v Jacobs E and C Ltd [2014] EWHC 1058 (TCC) - Jacobs applied for a correction to the decision under the slip rule, but reserved its rights generally to submit that the decision was invalid. Ramsey J held that, by reserving its rights, Jacobs had not elected to accept the decision as valid.

In Dawnus v Marsh Life, the defendant, when it made its submissions on the slip rule, failed to reserve its rights regarding any future challenges to the decision. Therefore, the court held, it had implicitly accepted that the decision was valid.
Conclusion

If a party wishes to challenge an adjudicator's decision, but does not want to have to pay up on an arithmetically incorrect amount should the challenge fail, it should utilise the slip rule. However it must also reserve its position regarding the validity of the decision, as Jacobs did in Laker Vent. Otherwise, as happened to Marsh Life, it may lose its right to challenge the decision entirely.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.