Don't Slip Up On The ‘Slip Rule'

In Dawnus Construction Holdings Ltd v Marsh Life Ltd [2017] EWHC 1066 (TCC), the Claimant (Contractor) brought enforcement proceedings against the Employer (Defendant), in relation to an adjudication decision for the valuation of an account following termination of a design and build contract for a hotel with retail and restaurant units. HHJ McKenna, sitting in the Technology and Construction Court (TCC), had to consider whether the Defendant waived its right to challenge the adjudication decision by inviting the adjudicator to correct it under the slip rule without first reserving its rights.

Section 108(3A) of the Housing Grants, Construction and Regeneration Act 1996 provides that construction contracts must include a provision allowing an adjudicator to correct a typographical or clerical error in a decision arising by accident or omission.

The adjudicator issued his decision on 6 March 2017. Two days later, the Defendant invited the adjudicator to revise his decision based on various matters, including alleged breaches of natural justice on the basis that the adjudicator had not considered a defence properly put forward by the Defendant. The adjudicator rejected the points raised by the Defendant.

For a breach of natural justice to be a bar to enforcement, the breach by the adjudicator must be "plain", "significant", "causative of prejudice" or "material". The Court in Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC) held that such breaches have to be "more than peripheral: they must be material".

The Court did not get as far as analysing whether the breaches complained of by the Defendant were valid, as HHJ McKenna held that the Defendant had waived or elected to abandon its right to challenge enforcement as it did not expressly reserve its rights to pursue a claim for breach of the rules of natural justice when inviting the adjudicator to make corrections under the slip rule. The Judge...