The essence of the principle established in S&T (UK) Ltd v Grove Developments Ltd  [2018] EWCA Civ 2448 is well understood. Where the statutory payment regime produces a notified sum, the payer must pay that sum before commencing an adjudication designed to establish the ‘true value’ of the relevant account. The policy underpinning the Housing Grants, Construction and Regeneration Act 1996 is clear: cash flow takes priority over valuation disputes.

Published: 19 October 2026
Authors: Peter Stockill

This applies even if there is no adjudication decision regarding the notified sum: AM Construction v The Darul Amaan Trust [2022] EWHC 1478 (TCC).

What Grove did not resolve, however, was the scope of that prohibition. Does it apply to all adjudications or just ones regarding the same payment cycle? Does it only apply to conventional true valuation adjudications, or can it extend to disputes concerning defects and delay?

In Lidl Great Britain Ltd v Closed Circuit Cooling Ltd (t/a 3CL) [2023] EWHC 3051 (TCC), the court provided important guidance. The court rejected both a narrow and a broad interpretation of Grove. The prohibition is not limited to disputes expressly labelled as ‘true value’ adjudications. Equally, the existence of an unpaid notified sum does not prevent a payer from commencing any other adjudication. Instead, the relevant question is whether the subsequent adjudication concerns matters that “could have been the subject of a pay less notice” in relation to the notified sum.

That formulation assists practitioners, but it also creates a new question. What determines whether a matter “could have been” raised? Three years on from Lidl there remains a lack of guidance about how to apply this question.

The contrasting outcomes in Lidl

The facts of Lidl illustrate how this might work, to an extent. In the first adjudication, Lidl’s pay less notice was held to be invalid and so it was required to pay the notified sum. Before paying, Lidl started a second adjudication claiming the costs of rectifying defects after 3CL had failed to undertake post-PC remedial works. The court accepted that most of this claim could proceed. Although there was some factual overlap with issues that had arisen during the relevant interim payment process (which could not proceed), the court took the view that the claim largely concerned subsequent rectification costs and did not amount to a revaluation of the earlier payment application.

Lidl also started a third adjudication (again, before paying) about extensions of time and liquidated damages. Lidl had sought to deduct LDs in its earlier invalid pay less notice. In this adjudication, it sought declarations that 3CL was not entitled to extensions of time for substantially the same period. The court held that, to the extent of the overlap, this dispute fell within the prohibition.

The significance of the decision lies in what it does not say. The court did not conclude that defects claims are always permitted and delay claims are always prohibited. Rather, it examined whether the later adjudication sought to revisit issues that properly formed part of the earlier payment cycle. In Lidl, the court was able to do so by reference to the content of the invalid pay less notice.

What does “could have been raised” mean?

The judgment leaves open several possible interpretations of this phrase.

Actual knowledge

The narrowest approach is that the prohibition extends only to matters known to the payer before the deadline for serving a pay less notice. This has obvious attractions. It may appear unfair to prevent a payer pursuing a claim based on facts it did not know at the time.

The difficulty is that actual knowledge is inherently subjective and potentially easy to manipulate. It would also create evidential disputes that are ill-suited to resolution, particularly  in the context of what may be a threshold jurisdictional challenge.

Reasonable discoverability

A second possibility is that the court should ask what the payer knew or ought to have known by the relevant date. This introduces an objective standard. Matters that could have been identified through proper inspection, monitoring or contract administration would be treated as capable of inclusion in a pay less notice.

Although more attractive in principle, this approach presents real practical difficulties. Determining what ought to have been discovered may require extensive factual investigation and expert evidence.

Accrual of a cause of action

A third possibility is that the prohibition extends to any claim whose legal basis had accrued before the pay less notice deadline. That approach offers legal certainty. If a right to a debt or damages had already arisen, it could be said that the payer could rely upon it.

Yet, a claim might involve multiple causes of action, accruing at different times and in some cases without knowledge. In Lidl. the court drew a distinction between the interim valuation process and a later claim for rectification costs, even though aspects of the underlying defective work may have existed much earlier. Accrual of a cause of action therefore cannot be the complete answer.

Valuation rights and damages rights

The Lidl defects adjudication suggests that another distinction may be operating beneath the surface. The court may have been differentiating between rights arising under the payment machinery and independent claims for damages resulting from breach of contract. An interim valuation determines what is due at a particular point in the project. A later rectification claim seeks compensation for the consequences of defective performance.

The same physical defect may feature in both exercises, but the legal rights are different. This helps explain why some overlap with the payment cycle was permissible in Lidl while other overlap was not.

The distinction should not be overstated however. Simply presenting a valuation dispute as a damages claim cannot circumvent Grove. Nevertheless, the nature of the legal right being asserted may form part of the answer to whether the later adjudication truly belonged within the earlier payment cycle.

A practical test

None of the above possible interpretations are satisfactory on their own. The better approach is not to focus solely on when the underlying facts or rights first came into existence. Instead, the focus should be on whether the claim was capable of being identified and advanced as a deduction when the pay less notice could have been served. This inquiry requires consideration of:

• the legal basis of the claim
• when the relevant facts became known or were discoverable
• whether the claim was sufficiently ascertainable to be advanced as a deduction
• whether the relief sought would, in substance, reverse the financial consequences of the notified sum.

No single factor is determinative and the touchstone should be: what is necessary to protect the payment cycle? Invariably, the onus will be on the (non)paying party to satisfy the adjudicator/judge that they should be allowed to continue.

Conclusion

Lidl demonstrates that the Grove prohibition is wider than a simple ban on conventional true valuation adjudications. It may extend to any adjudication that seeks to advance a deduction or cross claim which properly belonged within the payment cycle that produced the unpaid notified sum.

The difficult cases are those that fall between valuation and damages, and between known claims and subsequently emerging consequences. In those situations, neither actual knowledge nor accrual of a cause of action provide a satisfactory test on their own. The better view is that the court should ask whether the claim was reasonably capable of being identified and advanced as part of the payment process at the relevant time, having regard to the objectives of HGCRA and in particular, the need to protect the payment cycle.