Earlier this year, ISG brought enforcement proceedings of an adjudicator’s decision, indicative of the plight the company was facing. Furthermore, the case might have generated a helpful precedent which could prevent these cases from returning to the courts and maybe encourage a change of practice from an adjudicator.

It is not unknown for the adjudicator to make a clear and obvious mistake, including that the sums awarded are incorrect. These cases rarely reach the courts as in such circumstances where there can be little doubt that the adjudicator has erred, the parties would be inclined to settle.  However, two such decisions reached the courts this year and the one under the microscope here is ISG Retail Ltd v FK Construction Ltd [2024] EWHC 1713 (TCC).

Slip rule

The Scheme paragraph 22A gives the adjudicator the power to make corrections under the slip rule. Although in the ISG case the adjudicator did not attempt to correct the decision through the slip rule, some have tried in the past, maybe in the knowledge that the slip rule was of little protection but with an overwhelming determination to deliver justice. From these cases we have some guidance on the application of the slip rule.

The adjudicator can ‘correct a typographical or clerical error of something expressed within the four corners of the decision and which is apparent on the face of the decision’ and this might extend to consequential errors such as dealing with interest and fees (Axis v Multiplex [2019]). However, the slip rule is not to give effect to second thoughts or to clarifications. For example, an adjudicator cannot change a decision from ‘payment due in 7 days’ to ‘payment due if not already made’.

ISG Retail -v- FK Construction

ISG referred a dispute to adjudication following termination of the contract. ISG were successful in that the adjudicator found that FK had repudiated the contract and awarded loss and damages to ISG to complete the works. It turned out that the adjudicator had miscalculated the payment owed. FK challenged the error and requested the adjudicator make the necessary changes to the sum of almost £200,000 but the adjudicator declined to do so. Judge Hodge KC explained at paragraph 25 that the adjudicator had considered this was not a clerical error but what he had intended to do.

The judge thought that the Hutton principle applied and that it fell to be corrected, “within the limited confines of the exceptions to the inviolability of an adjudicator’s decision”. He stated at paragraph 34: “It is not in any way departing from the figures that were adopted by the adjudicator; rather, it is simply correcting an error in his approach to the application of those figures”. And so, the judge corrected the adjudicator’s decision and deducted almost £200,000 from the sums awarded to ISG.

Discussion

What seems to have been the case in ISG, the adjudicator was requested to correct a significant and obvious error under the slip rule but concluded that the correction was outside the scope of the slip rule and so did not have jurisdiction to change to the decision. In such circumstances of a significant and obvious error, such as the application of the incorrect figures, whereby a party has made an application, the adjudicator might inform the parties that the error is outside the confines of the slip rule but reissue a corrected decision for information purposes only. For example, alongside this authority, this small action might prevent these types of enforcement proceedings, simultaneously enhancing the reputation of adjudication.