PPE Medpro, a company linked to peer Michelle Mone, must repay the Government almost £122 million for breaching a contract to supply 25 million surgical gowns during the coronavirus pandemic, a High Court judge has ruled
PPE Medpro ordered to pay £122m in damages
A scandal-hit firm linked to Baroness Mone must repay the government over £121million after breaching a Covid PPE contract.
PPE Medpro, tasked with supplying 25 million surgical gowns during the pandemic, was sued by the Department of Health and Social Care (DHSC) over allegations it provided “faulty” goods. Now a High Court judge has ruled the company breached the contract – giving it two weeks to fork out almost £122million. The firm, a consortium led by Baroness Mone’s husband, businessman Doug Barrowman, was awarded government contracts by the former Tory administration. It came after the peer, who is on a leave of absence from the Lords, recommended it to ministers. The couple have denied wrongdoing. Reacting to the judgement, chancellor Rachel Reeves said: “We want our money back. We are getting our money back. And it will go where it belongs – in our schools, NHS and communities.”
Lawyers for the government told a trial earlier this year that it was entitled to recover the £121 million costs of the contract, as well as transporting and storing the items, amounting to an additional £8,648,691. Barristers for the firm told the trial that it had been “singled out for unfair treatment” and accused the Government of “buyer’s remorse”, claiming the gowns became defective due to the conditions they were kept in after being delivered to the DHSC.
It also issued a counterclaim saying DHSC owed a duty of care to the company to advise it on compliance with the contract. Ahead of the ruling, PPE Medpro filed a “notice of appointment to appoint an administrator” on Tuesday. And Baroness Mone said on X that she and her husband had been made a “poster couple for the PPE scandal”, claiming the DHSC had turned down multimillion-pound offers to settle the case.
Reading a summary of her ruling on Wednesday, Mrs Justice Cockerill said the contract was a “complex document” but found that PPE Medpro “has breached the contract”. She continued that the DHSC was “entitled to the price of the gowns as damages” as “the gowns could not be used as sterile gowns”, but ruled the government was not entitled to the costs of storing the gowns. The money must be paid by 4pm on October 15, the judge said.
In court documents from May this year, the DHSC said it paid PPE Medpro £121,999,219.20 in the summer of 2020 and rejected the gowns in December that year. It told the company to repay the money, but this has not happened, with the gowns still in storage and unable to be used. In written submissions for the trial in June and July, Paul Stanley KC, for the DHSC, said the “initial contact with Medpro came through Baroness Mone”, with discussions about the contract then going through one of the company’s directors, Anthony Page. Baroness Mone remained “active throughout” the negotiations, Mr Stanley said, with the peer stating Mr Barrowman had “years of experience in manufacturing, procurement and management of supply chains”.
But he told the court Baroness Mone’s communications were “not part of this case”, which was “simply about compliance”. He said: “The department does not allege anything improper happened, and we are not concerned with any profits made by anybody.” Mr Stanley said 99.9999% of the gowns should have been sterile under the terms of the contract, equating to one in a million being unusable. He continued that no validated sterilisation process was followed, and of 140 gowns later tested for sterility, 103 failed. He said: “On that basis, DHSC was entitled to reject the gowns, or is entitled to damages, which amount to the full price and storage costs.”
Charles Samek KC, for PPE Medpro, told the trial in written submissions that the Government had ordered 10 years’ worth of excess gowns by December 2020, which meant the gowns were “no longer needed or wanted”. He continued that the Government’s “obvious buyer’s remorse was channelled into looking for ways to escape from a contract it wished it had never made” and that the company had “perhaps been singled out” due to those associated with it. He added that the “only plausible reason” for the gowns becoming contaminated was due to “the transport and storage conditions or events to which the gowns were subject”, after they had been delivered to the DHSC, and that the testing of the gowns did not happen until several months after they were rejected.
In a post on X on Tuesday, Baroness Mone said she and Mr Barrowman had been “deliberately scapegoated and vilified” in a campaign to “distract from catastrophic mismanagement of PPE procurement”. She claimed the case “was never about gowns or money” and said that before the trial, PPE Medpro offered to replace the gowns and then offered cash sums to settle the case, which were rejected. She said: “Instead, the DHSC chose to spend a staggering £5 million of taxpayers’ money pursuing litigation against a company they knew had no funds.”