In a large skillet, layer onion & potato slices. Add bay leaf, herb sprigs, milk, water, salt and pepper. Simmer uncovered until potatoes are just tender, 20 - 25 minutes.
Meanwhile, cook bacon lardons until crispy brown. Drain on paper towels, reserving pan drippings. Add shallot slices and cook until crispy. Reserve with bacon for garnish.
Lay cod pieces on top of potato and onion layer. Add additional 1/2 cup of milk. Bring to a boil, then reduce heat and let simmer 5 - 7 minutes until fish is done and flakes easily with a fork. Remove from heat. Using a turkey baster or small ladle remove 3/4 of the cooking liquid and reserve for the Scotch Egg Sauce.
Serve fish pieces, potato & onion slices on a pool of Scotch Egg Sauce, sprinkled with crispy bacon and shallot.