It Wasn’t the Valuation That Failed - It Was the Notice

Payment Notices: One Small Error, £3.2m Consequence

A recent TCC decision — Laing O’Rourke v Shepperton Studios [2026] — is a sharp reminder that payment paperwork is not admin. It is risk.

What happened (in simple terms)

A contractor submitted an interim application for around £5.6m.

The employer issued:

• a Payment Notice (but with no proper breakdown), and

• a Pay Less Notice (with detailed deductions).

The adjudicator initially went full “smash and grab” — treating both notices as invalid.

The court took a more nuanced view.

Key takeaways

1. A Payment Notice must show its workings

It is not enough to state a number.

If the notice does not clearly explain how the valuation is made, it is invalid — and you lose control of the payment cycle.

👉 In this case, relying on spreadsheets or “everyone knows the numbers” did not save it.

2. A bad Payment Notice does NOT kill a Pay Less Notice

This is the real takeaway.

The court confirmed:

• A defective Payment Notice does not automatically invalidate a Pay Less Notice

• Provided the Pay Less Notice clearly sets out the deductions and basis

👉 That distinction reduced the payable sum significantly (down to ~£3.2m).

3. “Pay now, argue later” still rules

Attempts to rely on other adjudications or ongoing disputes were rejected.

The court reinforced the core principle:

• You pay first

• Then argue valuation later in separate proceedings

4. Detail beats assumption

The underlying issue was simple:

• The valuation logic existed

• It just wasn’t properly communicated in the notice

That gap was worth millions.

What this means in practice (TMDP view)

This is not a legal technicality — it is a project control issue.

On most live jobs, payment notices are:

• rushed

• based on internal spreadsheets

• assumed to be “understood”

That is exactly where risk sits.

If the notice cannot stand on its own, it is exposed

TMDP takeaway

If you are administering contracts:

• Treat payment notices as contractual instruments, not admin

• Ensure every notice clearly shows how the figure is built up

• Never assume background documents will “fill the gaps”

Because when it goes wrong, the argument is not about valuation.

It is about whether the notice works.

And that is a much harder position to recover from.