This article reviews another slip rule case in 2024, McLaughlin & Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC), which concerns an application by McLaughlin for summary judgment to enforce the original decision of an adjudicator. LJJ resisted enforcement on four main grounds, primarily focusing on the adjudicator’s subsequent issuance of a revised decision.

Factual Background

McLaughlin engaged LJJ for MEP installations under an amended JCT 2016 Design and Build Sub-Contract with a Sub-Contract Sum of approximately £17 million. The project was the fit-out and refurbishment of a building in Paternoster Square, London (the site of the old Newgate Market).

There had been a total of five adjudications between the parties concerning the Sub-Contract. The present proceedings related to the fifth adjudication. In Adjudication 5, McLaughlin sought a decision that LJJ should pay Liquidated Damages for failing to meet Key Dates, claiming £1,160,000 or such other sum as the Adjudicator might determine. On 31 October 2023, the adjudicator issued his decision, directing LJJ to pay McLaughlin £808,000 within 7 days.

LJJ submitted correspondence on 2 November 2023, arguing that the decision contained factual inaccuracies beyond mere clerical errors and requesting the adjudicator to amend the decision. McLaughlin objected to LJJ’s submissions, arguing they did not relate to clerical or typographical errors and should be disregarded. However, the adjudicator issued a “revised decision” on 4 November 2023. The covering letter acknowledged McLaughlin’s concerns that the corrections fell outside the scope of the slip rule but stated the adjudicator remained of the view the corrections were within his power. Essentially, the revised decision modified the payment obligation from “to be paid” to “if not already allowed”.

Slip Rule

The court focused on paragraph 22A(1) of the Scheme for Construction Contracts 1998, which allows an adjudicator to correct a decision to remove a “clerical error or typographical error arising by accident or omission“. The court considered the definition of “clerical error” and perhaps initially surprisingly, it relied on a 1798 entry in to the Oxford English Dictionary: “Of or pertaining to a clerk or penman (see clerk n. 5), of clerks; esp. in clerical error, an error made in writing anything out.“

As seems to be the leading case on the slip rule, the court referred to Axis M&E UK Limited v Multiplex Construction Europe Limited [2019] EWHC 169 (TCC). As I have stated in previous articles, the adjudicator can correct a typographical or clerical error and this might extend to consequential errors. However, the adjudicator cannot give effect to second thoughts or make clarifications. Here, the judge cited the following rules from Axis:

Revised Decision v Original Decision

The court found that there was no clerical error in the original decision. Instead, LJJ’s further submissions prompted the adjudicator to add words relating to a matter of substance he may have intended to include but omitted. Therefore, the adjudicator acted outside the scope of his power and the revised decision did not validly supersede the original decision.

The court also found that the adjudicator had acted in excess of power (and thus jurisdiction) and that McLaughlin’s proffering of “legitimate and minor” corrections in response to the adjudicator’s invitation did not prevent them from relying on the original, uncorrected decision for enforcement (approbation and reprobation).

The court concluded that McLaughlin was entitled to summary judgment to enforce the original adjudicator’s decision. The court noted that while LJJ might have a valid argument that the sum had already been “allowed” to McLaughlin, this was a matter to be pursued through the contractual mechanisms, arbitration, or further adjudication and was not a valid ground for resisting enforcement of Adjudication 5.

Observations

It is now trite that where an adjudicator is making corrections under the slip rule, this is not a chance to give effect to second thoughts. From that premise I propose the following slip rule test: if a third party cannot correct a slip (i.e. a “clerk or penman“), the adjudicator may have entered dangerous territory.

Furthermore, should an adjudicator wish to give effect to second thoughts, it is suggested as a remedy that there might be a place for an “admitted error” in respect of the Hutton principle (Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC) [4]).