Laing O’Rourke has secured a £3.2m High Court victory after successfully enforcing an adjudication decision in a payment dispute with client Shepperton Studios.

The Technology and Construction Court ruled that Shepperton must pay the sum plus VAT and interest following a row over an interim payment from a £331m design and build contract in 2021.

Laing O’Rourke had originally sought to enforce a £5.6m adjudication award in its favour but the court reduced the final sum after upholding key deductions set out in the employer’s pay less notice.

At the centre of the dispute was whether Shepperton’s payment notice complied with the contract requirement to state both the sum due and the basis on which it had been calculated.

Deputy High Court Judge Simon Lofthouse KC found the notice was invalid because it failed to explain how the gross valuation had been built up, instead relying on a headline figure with no supporting breakdown.

The court rejected arguments that earlier spreadsheets or background material could cure the defect, ruling that the necessary detail must be contained within the notice itself or clearly incorporated.

That failure triggered the usual fallback position, meaning the sum applied for by Laing O’Rourke became the notified amount due.

But, the judge departed from the adjudicator on the status of the pay less notice, finding it remained valid because it clearly set out the deductions being made, including liquidated damages, utilities costs and catering charges.

Those deductions, totalling just over £2.4m, were allowed to stand and reduced the amount payable to £3.2m.

The court rejected Laing O’Rourke’s argument that the pay less notice was automatically invalid because it started from the same flawed valuation figure, finding that the contract allowed properly explained deductions to be applied regardless.

Shepperton also attempted to rely on five separate adjudications to argue that Laing O’Rourke was not entitled to most of the money, but the court refused to take those decisions into account.

The judge reinforced the “pay now, argue later” principle, ruling that such findings could not be set off without separate enforcement proceedings.

A further hearing in April will consider the underlying contractual issues, but in the meantime Shepperton must pay the £3.2m award along with contractual interest.