The Adjudication Part 5: Time Scales, The Slip Rule and Reasons

Melanie Blake and David Owens take a look at the adjudicator’s decision; examining extensions, reasoning, and the slip rule.

Our articles in this series so far have explained the adjudication process from the start, looking first at where the statutory right to an adjudication originated from, with the penultimate article discussing hearings and adjudicators’ powers.

In this concluding article, we turn our attention to the adjudicator’s decision; examining extensions, reasoning, and the slip rule.

Timescales

As we have discussed throughout this series, adjudications are designed to save time and money by preventing proceedings from being dragged out through litigation in court. As such, the timescales for decisions are tight. The adjudicator is required to reach their decision within 28 days of service of the referral notice. This period can be extended by a further 14 days if the referring party agrees and can be extended further if both parties agree. Complete stays in the adjudication process are contrary to its original aims and are therefore very rare, only being granted in very limited circumstances[1] or if agreed between the parties. Parties should therefore not rely on the possibility of a stay to buy themselves more time.

The adjudicator’s decision is binding and will be final providing it is not challenged by subsequent arbitration or litigation. Even if the parties wish to pursue court or arbitration proceedings, they must in the meantime comply with the adjudicator’s decision. In the majority of disputes, the parties will accept the adjudicator’s decision, but if they choose to pursue subsequent proceedings the dispute will be heard afresh – not as an ‘appeal’ of the adjudicator’s findings. It should be noted that once an adjudicator has decided on a particular issue, that same issue cannot be referred to a second adjudication; it must instead go to arbitration or litigation. Parties would therefore be wise to take a decision at face value and comply with its directions, even if they wish to challenge it later. The phrase ‘pay now, argue later’ is often used in reference to adjudication decisions.

Completion and Communication

As outlined above, the adjudicator must normally reach a decision within 28 days of service of the referral notice. Additionally to this, Paragraph 19(3) of the Scheme for Construction Contracts 1998 provides that the adjudicator should deliver the decision to the parties to the contract “as soon as possible”[2] after it has been reached. If the decision is delivered late, it may make it unenforceable. This decision needs to be communicated to the parties in writing[3], and every party to the contract must be provided with a copy.
Reasons

However, just because a copy of the decision is given to all parties, it does not necessarily mean it must explain how it has been reached. Adjudicators are not required to give reasons for their decision, perhaps because of the emphasis on a speedy resolution and the added time such writing would require. However, in practice, most parties do ask for a reasoned decision and are more likely to accept a negative result if there is an explanation. It is important to note that if one party asks for reasons, reasons must be given. However, the reasons don’t have to be given in detail. The court has found that if a reasoned decision is required, a brief statement will suffice[4]. The threshold for a decision being overturned due to flaws within its reasoning is very high, reasons need to be ‘absent or unintelligible and have caused the complainant substantial prejudice[5]’ before a court will refuse to enforce a decision. Parties may therefore ask for reasons, which may perhaps serve them well for future disputes, but it will very rarely give them a route to challenge that particular decision.

Adjudication Slip Rule

When you consider the short timescale that adjudicators have to make their decisions and the large volume of material they often have to consider, it is not surprising that errors sometimes make their way into the decision. The “slip rule” applies in court, arbitration and adjudication proceedings and allows for the correction of accidental mistakes or errors in the outcome of such proceedings. Prior to 2011, the Housing Grants Regeneration and Construction Act 1996 (“Construction Act”) did not expressly provide for the slip rule. Instead, adjudicators had to rely on an implied term, described as providing the adjudicator with a 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.”[6]

When the amendments to the Construction Act came into force on 1 October 2011, new section 108(3A) formally introduced the following slip rule for adjudication: “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.” In the absence of such a written provision, any contractual adjudication mechanism falls away and is replaced in its entirety by the Scheme for Construction Contracts 1998, which provides that the adjudicator may correct the decision to remove a clerical or typographical error arising by accident or omission, either on the adjudicator’s own initiative or at the request of one of the parties.

Under the Scheme, the adjudicator must make any correction under the slip rule within five days of the date when the decision was delivered to the parties (paragraph 22A(2)) and (in England and Wales only) deliver the corrected decision to the parties as soon as possible (paragraph 22A(3)). Section 108(3A) of the Construction Act does not set a time limit for slip rule corrections (unlike the Scheme). This gives parties the freedom to agree a period in their contract.

The slip rule is useful in that it prevents the parties from having to go to court to correct the decision, thus saving both time and money. However, it is not designed to be used to challenge the reasoning or fundamentals of a decision, and it is important to remember that it is intended to correct what in reality often amount to typographic errors. Parties should therefore not see the slip rule as something to be used if they disagree with the reasoning of a decision.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it.

[1] Wimbledon Construction Co 2000 Ltd v Vago [2005] EWHC 1086 (TCC)

[2] The Scheme for Construction Contracts (England and Wales) Regulations 1998, 19 (3)

[3] The Scheme for Construction Contracts (England and Wales) Regulations 1998, 19(3)

[4] Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358

[5] Gillies Ramsay Diamond v PJW Enterprises Ltd [2002] ScotSC CSOH 340

[6] Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd

Melanie Blake is an Associate and David Owens is a Partner at Sharpe Pritchard LLP.

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This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email  This email address is being protected from spambots. You need JavaScript enabled to view it.