REUTERS | Nigel Roddis

Slip resistance: the importance of correcting slips on time

Slips can be costly, as Steven Gerrard knows only too well. Arguably, his slip in a game against Chelsea last season cost Liverpool the Premier League title. But it’s slips in adjudicator’s decisions that I want to talk about today.

Parties occasionally claim that items they disagree with in an adjudicator’s decision constitute slips when it is abundantly clear that they have not arisen as a result of a “clerical or typographical error arising by accident or omission” (section 108(3A), Construction Act 1996). However, even the most experienced adjudicators sometimes make genuine slips in their decisions, and that is exactly what happened in PP Construction Ltd v Geoffrey Osborne Ltd.

PP Construction Ltd v Geoffrey Osborne Ltd

Osborne engaged PP under a sub-contract containing the following express provision for the correction of errors in an adjudicator’s decision (clause 70(9)):

“The adjudicator may on his own initiative or at the request of either party correct his decision so as to remove any clerical mistake, error or ambiguity provided that such initiative is taken or such request is made within 14 days of the notification of his decision to the parties. Any such correction shall be made and notified to the parties within 7 days from when such initiative is taken or such request is made as the case may be and for the avoidance of any doubt, the parties shall be deemed to have agreed that any such correction forms part of the decision of the adjudicator.”

As Stuart-Smith J pointed out, this provision differs significantly from that included in paragraph 22A of the Scheme for Construction Contracts 1998:

“(1) 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.
(2) Any correction of a decision must be made within five days of the delivery of the decision to the parties.
(3) As soon as possible after correcting a decision… the adjudicator must deliver a copy of the corrected decision to each of the parties to the contract.”

Correcting the adjudicator’s slip

The facts are quite detailed, but it is worth setting out them out:

  • The adjudicator’s decision was issued on 26 November 2014. On the same day, PP wrote to him advising that he had incorrectly deducted a 5% discount, which meant there had been two deductions, not one. The consequence of this was to reduce the overall sum awarded to PP. PP requested the adjudicator to correct this slip and included an attachment setting out the error.
  • On 28 November, the adjudicator replied, saying that he had not intended to deduct 5% twice, but the attachment was not clear. He asked to be taken to the particular items in his decision. A further copy of the attachment was sent to the adjudicator later that day, along with an explanation of the error that needed correcting.
  • On 30 November, the adjudicator replied. He accepted the clerical error and set out his revised calculations. He indicated a revised decision would be issued once PP had “cast an eye” over his calculations.
  • On 4 December, PP asked the adjudicator to issue his revised decision.
  • On 5 December, the adjudicator issued his revised decision (after being chased again by PP).

Clearly more than seven days elapsed between decisions (from 26 November to 5 December), and an issue arose over whether the revised decision was served in time.

The meaning of “request” in clause 70(9)

By the time the matter got to court, it was agreed that the adjudicator’s email of 30 November was not a correction of the clerical mistake, as required by clause 70(9) of the contract. The case focused on whether PP’s letter of 26 November was a “request” within the meaning of clause 70(9) and, if not, whether there could be a later “request” (in the form of its letter of 28 November).

Stuart-Smith J held that the adjudicator had issued his amended decision within time. In reaching this conclusion, he noted that for a “request” to be operative, the error must be identified with sufficient clarity that a reasonable adjudicator holding himself out as competent to deal with the adjudication would understand that he had made a clerical error, what the error was, why it was an error and what alteration to his decision was necessary. This was not possible from PP’s letter of 26 November (because the adjudicator had sought clarification), but it was clear from its letter of 28 November. That meant the “request” was made on 28 November and the revised decision was issued in time, albeit only just.

My thoughts on what this means

Stuart-Smith J’s conclusions will obviously be of limited application if the Scheme for Construction Contracts 1998 applies to the contract in question as that requires a slip to be corrected within five days of the delivery of the decision, regardless of when the slip is notified to the adjudicator, and that leaves little scope for ambiguity. If the Scheme had applied in this case and the slip was corrected in excess of five days from the delivery of the decision, then there is little doubt that PP would not have succeeded because the correction would have been invalid under paragraph 22A.

However, would it really be worth Osborne resisting in such circumstances, given that PP could simply refer the same dispute to adjudication to obtain the remainder of the sum due? The answer might be yes if Osborne could successfully argue that the same dispute had already been decided, although I’m not sure how much sympathy it would get from a court for this argument.

While this case does rather turn on its own facts, it is nevertheless a useful reminder of the importance of raising clerical errors or slips in good time. It also demonstrates that adjudicators need to pay attention to the applicable time limits too.

We all know that payees don’t want valuable cash slipping through their fingers…

MCMS Ltd Jonathan Cope

Leave a Reply

Your email address will not be published. Required fields are marked *