Contractor Recovers £3.2m Despite Defective Payment Notice

A construction contractor has secured a High Court order for more than £3.2 million following a dispute over payment notices on a major construction project. The case, Laing O’Rourke Delivery Ltd v Shepperton Studios Ltd [2026] EWHC 612 (TCC), provides important guidance on how strictly courts will assess payment documentation under construction contracts.

The court was asked to enforce an adjudicator’s decision requiring payment of around £5.6 million, with the dispute focusing on whether the employer’s payment documents complied with the contractual requirements.

Invalid Payment Notice: Failure to Explain the Calculation

The adjudicator had found that the employer’s payment notice was invalid because it failed to explain how the valuation figure had been calculated. Rather than setting out the calculation, it simply stated a single overall amount.

The High Court agreed. It confirmed that a payment notice must explain the “basis” of the calculation, not just the end figure. Without that explanation, the notice did not comply with the contract. This is a common issue in construction contract disputes, where strict compliance with payment mechanisms is required.

Pay Less Notice Still Held to Be Valid

The court reached a different conclusion in relation to the employer’s pay less notice. This document set out detailed deductions, including delay damages and additional costs said to be incurred by the employer.

The employer argued that if the payment notice was invalid, the pay less notice must also fail. The court rejected that argument, holding that a properly drafted and clearly explained pay less notice can still be valid, even where the earlier payment notice is defective.

Reduced Payment Ordered

As a result, the contractor did not receive the full £5.6 million originally claimed. Instead, the court ordered payment of just over £3.2 million, reflecting the deductions set out in the valid pay less notice.

Other Adjudications and Financial Risk Arguments Rejected

The employer also relied on other adjudication decisions which it said showed the contractor was not entitled to most of the money. The court declined to take these into account at the enforcement stage, reaffirming the established approach that adjudicators’ decisions must be complied with first, with wider disputes resolved later.

Arguments that payment should be delayed due to concerns over repayment were also rejected. The existence of a parent company guarantee provided sufficient comfort that any repayment could be made if required.

Managing Risk in Construction Payment Disputes

Disputes over payment notices, pay less notices and adjudication enforcement can have a significant impact on cashflow and project delivery. Decisions such as this highlight the importance of understanding how courts approach technical compliance and the practical consequences that can follow.

If this judgment raises questions for you, or you would like support in navigating disputes arising from construction contracts, Please contact our commercial litigation team can help you consider your position and next steps.

About the Author

Neil is the Managing Partner of Machins Solicitors and Head of Dispute Resolution. With over 30 years’ experience, he is recognised in The Legal 500 for his strategic approach to complex commercial litigation and his ability to secure strong outcomes for clients.