Legal Developments In Construction Law - March 2019

1. Adjudicator's power to correct - just a matter of arithmetic?

   In calculating the sum due in an adjudication, the adjudicator made a mistake. He deducted the sum he had determined as the total value of the contra charges, from the sum certified by the defendant. But the certified sum already included a substantial deduction, by the defendant, for contra charges. The result of this error was that no sum was stated to be due to the claimants and their claim failed. The adjudicator issued a corrected decision but the defendant claimed that the amendments in the amended decision went beyond those permitted by the "slip rule" in the Scheme for Construction Contracts, because they were not made "so as to remove a clerical or typographical error arising by accident or omission."

   The court's starting position was that decisions of adjudicators are to be enforced save in very exceptional cases. The important starting point was to consider the dispute referred to the adjudicator, and the dispute which he considered he had to decide. The principal elements of the dispute were the appropriate value of variations and what, if any, contra charges should be deducted. Once those had been resolved the amount, if any, payable should follow as a matter of arithmetic or mechanics. Once the second limb (as to contra charges) had been decided, the arithmetic had to be carried out to give effect to that part of his decision. In the court's judgment the error made in incorrectly over-deducting for contra charges was the sort of error falling within

   the statutory slip rule as construed in a previous case, namely "...an arithmetical error in adding or subtracting sums [or] .... a slip in carrying over a calculation from one part of the decision to another".

   But had the adjudicator been entitled, not only to correct his decision in respect of the sum payable, but then, because a sum was due, to award interest and to reverse his order as to payment of his fees? The court ruled that he was. Once one element of a decision has been corrected, any other changes consequential upon the correction should be made, since otherwise the decision is likely to be internally inconsistent.

   Axis M&E UK Ltd & Anor v Multiplex Construction Europe Ltd [2019] EWHC 169

2. Challenging jurisdiction: how to make a reservation that works

   A respondent in an adjudication reserved "its right to raise any jurisdictional and/or other issues, in due course, whether previously raised or not and...