The Speed Sensor is a sensor that is mounted on the left hand hub and connected to the loom with an Econoseal connector. The sensor is an inductive proximity sensor which generates an electrical pulse when each tooth on the reluctor passes in front of the sensor. The correct positioning of the sensor relative to the reluctor ring is therefore critical - as close as possible without touching anywhere on the circumference of the ring.
Assembly required a plastic top hat to be screwed into the bracket, and the sensor was then screwed through that top hat. Once positioned correctly, the locking nut was tightened onto the top hat in front of the bracket. The electrical connection was then plugged into the loom connector and the wiring was tidied up with tie-wraps whilst ensuring sufficient slack cable was available to allow for suspension movement.
I had previously read about unstable speedometer readings and a solution which involves a new ground connection being made between the sensor and the chassis. When I asked Caterham about this, the advice was not to implement that modification because the sensor has recently been upgraded and the modification was no longer required.
To test whether the sensor was functional, the ignition was switched on and the rear wheel was rotated by hand. As the teeth and gaps pass in the reluctor pass in front of the sensor, it is possible to see the rear of the sensor alternate between the on and off state (red glow / black).
On and off state of the Speed Sensor (light visible / not visible at rear of sensor)
UPDATE post-PBC - a second locking nut is recommended at the front of the speed sensor (to lock agains the first metal nut) to prevent it from vibrating loose over time. Please see here.