Peter Vinden, chief executive of The Vinden Partnership, explores the legal guidelines that determine what you can do if you’re faced with adjudication errors
I have yet to meet an infallible human being. As all adjudicators are either male, female or gender-neutral human beings (there are no known aliens practising – despite rumours to the contrary) we are all prone to the human condition of making slips, errors and mistakes from time to time. Who was it who said “a man who never made mistakes never made anything” and “to err is human”?
Before you ask, yes, I have made the odd mistake over the years and yes, I can recall having to change two decisions over the last twenty years because of typographical and/or arithmetical errors made in the writing of my decisions.
I can tell you there is simply nothing worse that receiving an email from a party in receipt of a decision who states that you have made a slip, error or cockup in your drafting. Faced with such an allegation you have to investigate it very seriously because the implications for the wronged party could be significant and even prove to be a corporate killer.
So, if you find yourself in the position of having to revisit a decision because of an alleged slip, error or cockup, what are the legal guidelines that determine what you are permitted to do when faced with this issue?
In Bloor Construction (UK) Limited v Bowmer & Kirkland Limited [2000] EWHC 183 (TCC) the court found that an adjudicator could rely on an implied term in his appointment which gave him power to “correct an error arising from an accidental error or omission or to clarify or remove any ambiguity in the decision which he has reached”.
When the Local Democracy, Economic Development and Construction Act 2009 came into force on 1 October 2011 to amend the Housing Grants Construction and Regeneration Act 1996 (“the Act”), an express provision was included in the Act requiring that “The contract shall include provision in writing permitting the adjudicator to correct his decision so as to remove a clerical or typographical error arising by accident or omission”.
As we all know, if a construction contract does not comply with the Act, the Scheme For Construction Contracts (“the Scheme”) applies by default and so paragraph 22A(1) of the amended Scheme contains a provision which says “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”.
The amendments made to the Act and the Scheme were thought by some to restrict the powers of an adjudicator to amend a decision, once issued, to clerical and typographical errors and not arithmetical errors.
These issues have now been considered in the TCC in the case of 1) Axis M&E UK Limited 2) Axis Plumbing NSW PTY Limited -and- Multiplex Construction Europe Limited [2019] EWHC 169 (TCC). In this case an experienced adjudicator made an arithmetical error by double counting a reduction for a contra charge which had the effect of incorrectly showing that Axis had been overpaid. Consequently, the decision found that Axis’s claim for both payment and interest failed and consequently Axis was ordered to pay the Adjudicator’s fees and expenses.
When the Adjudicator was informed of the error, he amended and issued a revised decision, this time showing a payment due to Axis of £654,119.65 together with interest of £11,046.76 and requiring Multiplex to pay the Adjudicator’s fees and expenses of £29,515.50 plus VAT.
As Multiplex refused to pay up on the revised decision, Axis issued proceedings in the high court to have the decision enforced.
Multiplex defended the application on the basis that the amended decision offended paragraph 22A of the Scheme because it was said the amendment went beyond correcting a clerical or typographical error arising by accident or omission. It was suggested that by correcting the arithmetical error, the Adjudicator was in effect revising his “first intentions” which was not permissible.
In reviewing the case law relevant to the arguments before the court, reference was made to Bloor as well as a number of cases concerning corrected arbitral awards and, in summing up in his decision, Mr Roger Ter Haar QC, the presiding judge, had this to say:
“51. I see no distinction between that situation under arbitration law and the present situation where the correction of what I have called the “gateway error” required consequential corrections to be made.
“52. Moreover, in my view once one element of a decision has been corrected, then any other changes consequential upon that correction should be made, since otherwise the decision is likely to be internally inconsistent.
“53. Accordingly, in my judgement the Adjudicator acted within his jurisdiction in awarding interest, and there will be summary judgement for the sum of £11,046.76 in addition to the principal sum.
“54. There is also a claim for interest upon the total sum of £654,119.65, but I have not heard any submissions in that respect.
“55. As to the Adjudicator’s fees, these have been paid to the Adjudicator, so no order is necessary in that regard.”
Summary
This judgement gives clear authority and the power to an adjudicator to revisit and amend a decision where a typographical, clerical or arithmetical error has been made, which he or she acknowledges to be present in the decision. It should be remembered, however, that errors made by an adjudicator in deciding the facts and law are not errors that can be corrected under this rule because they amount to an adjudicator changing his or her mind. However, that doesn’t mean that the decision will not be enforced because, after all, we are human and we are allowed to make mistakes when it comes to deciding on the fact and the law. We are just not allowed to change our first decided intentions and that clearly has to be right, hasn’t it?
Peter Vinden
Chief executive
The Vinden Partnership
