Lawyers say the Government is claiming more than £130 million after suing a firm at the centre of a row over the supply of personal protective equipment during the coronavirus pandemic.
Barristers representing Health and Social Care Secretary Steve Barclay have given detail of a High Court claim against PPE Medpro in a written case outline – and say more than £10 million has been run up in legal bills.
News of the claim, centred on the supply of millions of surgical gowns, emerged before Christmas and PPE Medpro said then that it would be “rigorously defended”.
The firm accused the Department of Health and Social Care (DHSC) of a “cynical attempt to recover money from suppliers” who acted in good faith.
Lawyers representing Mr Barclay are alleging, in written “particulars of claim”, that PPE Medpro “failed” to provide certification to establish that gowns had been “reliably sterilised for medical use”.
PPE Medpro has been at the centre of a Westminster controversy, with Tory peer Baroness Michelle Mone taking a leave of absence from the Lords following allegations linking her to it.
Reports, denied by Lady Mone, have suggested the peer may have profited from the firm winning contracts worth more than £200 million to supply equipment after she recommended it to ministers in the early days of the coronavirus pandemic.
Tom Weisselberg KC, who is leading the DHSC legal team, said, in the particulars of claim, that, under a June 2020 contract, PPE Medpro had agreed to supply the department with 25 million sterile surgical gowns for £122,000,000.
He said the department had “in fact” paid £121,999,219.20.
“The gowns supplied by PPE Medpro did not comply with the specification in the contract, including the applicable regulatory regime,” he said.
“DHSC accordingly claims repayment of the price, alternatively damages and/or an indemnity, and its costs of storing and disposing of the gowns.”
He said the department wanted repayment of £121,999,219.20, plus around £11 million of its “reasonably incurred” costs.
Mr Weisselberg said the DHSC sent a notice to PPE Medpro, in December 2020, “rejecting” the gowns.
“The rejection notice explained that the gowns had been rejected by DHSC because they did not comply with relevant laws applying to medical devices and because PPE Medpro had failed to provide certification to establish that the gowns had been reliably sterilised for medical use, rendering them unusable in the NHS,” he said.
“The rejection notice required PPE Medpro to repay the price to DHSC, and to collect the rejected gowns at its own risk and expense, or to request that DHSC dispose of them at PPE Medpro’s cost.”
He added: “PPE Medpro has not repaid the price, nor has it collected the gowns.”
Mr Weisselberg explained that the gowns remained in storage and said the DHSC would have to “dispose of or recycle them”.
A statement issued by PPE Medpro, in December, said: “PPE Medpro will demonstrate to the courts that we supplied our gowns to the correct specification, on time and at a highly competitive price.
“The case will also show the utter incompetence of DHSC to correctly procure and specify PPE during the emergency procurement period.
“This will be the real legacy of the court case and it will be played out in the public arena for all to see.”
PPE Medpro claimed, in December, that the department was fighting over “contract technicalities” such as whether gowns were single or double-bagged because it had “vastly over-ordered” protective equipment.
The firm said it had made “numerous attempts at mediation with DHSC” but “they didn’t want to settle”.
The PPE Medpro statement said: “Over a two-month period, July through to end of August 2020, PPE Medpro supplied DHSC with 25 million sterile gowns.
“The gowns were manufactured to the correct quality, standards and specification set out in the contract, delivered on time and at a price that was 50% of what DHSC had been paying at the time.”
But “by the end of 2020 it was clear that DHSC has vastly over ordered and held five years supply of PPE across the seven major categories including gowns” and because of limited lifespans for products “it was clear that the DHSC would never be able to use all the PPE they procured”.
“Consultants were then brought in to pick over all the contracts and fight product not on quality but on contract technicalities that were never envisaged at the time of contract.
“For example, PPE Medpro’s contract never specified double bagging of gowns.
“Yet it became clear in late 2020 that all the gown manufacturers who had correctly produced single bagged gowns were being unfairly challenged by DHSC.
“Despite numerous attempts at mediation with DHSC, it is clear they didn’t want to settle.
“Too many gowns and other PPE items that will never enter the supply chain.
“That’s why DHSC currently have 174 disputes with suppliers to a value of £4 billion.
“Most of this product will be incinerated or given away.”