McLaughlin & Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC)

As part of the Fenwick Elliott team representing McLaughlin & Harvey Limited (“McLH”) in its successful adjudication enforcement proceedings against LJJ Limited (“LJJ”) in the Technology & Construction Court, it only seems appropriate that in this latest blog I discuss the case and the line drawn by Mr Adrian Williamson KC (sitting as a High Court deputy judge) in determining whether an adjudicator had exceeded his jurisdiction in applying the Slip Rule.  

Slips…what’s the rule?

Paragraph 22A(1) of the Scheme for Construction Contracts (England and Wales) Regulations 1998 is clear that:

“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 “Slip Rule”).

It is well established that what is “clerical or typographical” is typically a typo, the use of an incorrect name or calculation error within an adjudicator’s decision. They are not errors going to the reason or intention forming the basis of the decision1 and certainly not a means by which an adjudicator can correct an omission in respect of something the adjudicator intended to include or take account of but wholly omitted in reaching their decision.2

How did the parties end up in court?

The Adjudicator produced his decision in October 2023 (the “Original Decision”), which decided that LJJ (a specialist mechanical and electrical contractor) should pay McLH £808,000 “Key Date Damages” as a result of LJJ failing to meet a number of key dates under the parties’ subcontract; this being a contract for MEP installations as part of the fit out and refurbishment of a central London office development.  

At the same time as he issued his Original Decision, the Adjudicator invited the parties to submit any proposed clerical or typographical errors in respect of the Original Decision.

As the judgment notes, in complying with this request, LJJ “went well beyond” the correction of clerical or typographical errors, and made what it, the Adjudicator and the court acknowledged were “submissions” on matters of fact not addressed during the adjudication, which included the provision of evidence not served during the adjudication. 

Putting aside the fact that LJJ went well beyond proposing clerical or typographical errors, it is worth noting at this point (as there’s been quite a bit of “commentary” on this) that the submissions made by LJJ were wrong in any event as they submitted to the Adjudicator that the Key Date Damages sought by McLH had already been deducted from LJJ’s account through a previous application for payment. This was not the case and ultimately a matter LJJ seemingly came to accept given these particular “submissions” or indeed any claim of McLH “double counting” as previously alleged did not form any part of the points taken by LJJ in resisting enforcement.3

Notwithstanding that LJJ’s submissions did not appear to remove any typographical or clerical error, the Adjudicator accepted them, and concerned about any potential double recovery, produced a Revised Decision at the beginning of November 2023 (the “Revised Decision), which stated that McLH were to be paid £808,000 “if not already allowed”.  

LJJ made no payment, so the parties found themselves in court with McLH seeking to enforce the Original Decision on the basis it was not superseded by the Revised Decision as in revising the Original Decision the Adjudicator had exceeded his jurisdiction under the Slip Rule.  

Did the Adjudicator go too far?

Yes. The court found that LJJ’s submissions were neither of a clerical nor typographical nature and that under the Slip Rule the Adjudicator had no power to correct the Original Decision based on those submissions. McLH was therefore entitled to summary judgment of the Original Decision.

In coming to this conclusion, the court sought to draw a distinction between the Adjudicator exercising a power he did not have and erroneously exercising a power he did have4.

On the facts, the court found that the Adjudicator had exercised a power he did not have as by amending his decision in line with LJJ’s submissions he had sought to qualify or clarify his Original Decision; effectively “giving effect to second thoughts or intentions”5. As the court acknowledged, “this is not a power which the Adjudicator enjoys”.

Of course, there were also matters of policy to consider here.  As the court rightly acknowledged, if it were to have enforced the Revised Decision it would have likely opened the floodgates to others seeking to substantively amend adjudicator’s decisions through further rounds of submissions after those decisions were issued. This has the potential to make the adjudication process endless, which of course contradicts the purpose of adjudication as being a quick and relatively inexpensive means of determining disputes on an interim basis. 

Overall, this case serves as a good reminder to adjudicating parties and adjudicators alike as to the limits of an adjudicator’s powers under the Slip Rule and the importance of adhering to this as a matter of practice, policy and, importantly, avoiding costs through enforcement proceedings.

• 1. NKT Cables A/S v SP Power Systems Limited [2017] CSOH 38
• 2. Ibid.
• 3. McLaughlin and Harvey Ltd v LJJ Ltd [2024] EWHC 1032 (TCC) [para. 2]
• 4. O'Donnell Developments Ltd v Build Ability Ltd [2009] EWHC 3388
• 5. Lesotho Highlands v Impregilo SpA [2006] 1AC 221