When may an employer deduct liquidated damages from a sum awarded by an adjudicator?
An employer should ordinarily advance its liquidated-damages case in the adjudication if it seeks to reduce the sum claimed. A deduction after the decision is exceptional and must follow from the decision and contract without contradicting the adjudicator's determination.
Do not deduct liquidated damages after the award unless the adjudicator determined the necessary entitlement expressly or by unavoidable implication
The general position recorded in the authorities is that an employer cannot hold back an adjudication sum by raising liquidated damages that could have been put before the adjudicator. A limited exception may arise where the decision itself determines the extension of time and leaves a liquidated-damages calculation that follows from that determination under the contract. The employer must still establish the contractual prerequisites, applicable dates, rate, notices and arithmetic. An extension-of-time finding does not automatically decide every element of liquidated-damages entitlement.
| Issue | Position |
|---|---|
| Damages defence available in adjudication | Advance it there |
| Defence omitted | Ordinarily no post-award deduction |
| Entitlement expressly decided | Apply the decision accurately |
| Entitlement said to be implied | Use only if unavoidable |
| Prerequisite notice or rate unresolved | No automatic deduction |
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