Baroness Mone-linked company ordered to pay £122m over PPE contract

A medical supply firm linked to the peer Baroness Mone and her husband, Doug Barrowman, has been ordered to repay £122 million after a judge found it had breached a government contract for the provision of personal protective equipment (PPE). PPE Medpro was sued by the Department of Health and Social Care (DHSC), which argued that the medical gowns it supplied did not meet the required healthcare standards. According to the High Court, Medpro failed to prove that its surgical gowns, intended for use by NHS staff, had undergone a validated sterilisation process. The court has ordered the company to compensate the government by 15 October.

Background to the Contract

In 2020, during the COVID-19 pandemic, the government scrambled to obtain PPE as the nation went into lockdown and hospitals reported shortages of equipment to protect healthcare workers from the virus. PPE Medpro was founded in May of that year by a consortium led by Baroness Mone's husband, Doug Barrowman. It won its first government contract to sell masks through a 'VIP lane' after being recommended by Baroness Mone.

According to the High Court's ruling, the government later ordered 25 million sterile gowns from Medpro, which were made in China and delivered between August and October 2020. Due to the urgency of the situation, Medpro's deal was not subject to open competition. However, just before Christmas that year, the DHSC issued a notice rejecting the gowns and requesting a refund. The ruling stated that after examining them, the government "was not confident" that the gowns were compliant with the contract, later finding that "a number of them were not sterile". This resulted in the government taking legal action in the High Court in 2022.

The High Court's Ruling

Medpro, on the other hand, argued that it had complied with the terms of the contract. However, Mrs Justice Cockerill ruled on Wednesday that the company had breached the agreement. She found that the gowns were required to have undergone a "validated sterilisation process", a condition which, she said, "was not followed by Medpro".

The court found that the gowns lacked the 'notified body number' required to certify them as sterile, and Medpro had no evidence that such a process had occurred. Medpro had argued that the gowns could have been repurposed for non-sterile use or sold to other buyers. Mrs Justice Cockerill noted issues with this argument, including the fact that the NHS did not need any more non-sterile gowns.

While she noted that the DHSC did not reject the gowns within a reasonable timeframe, she dismissed the government's claim for £8.65 million in storage costs due to a lack of evidence. The judge ruled that the company was liable to pay £121,999,219, plus interest. It remains uncertain how Medpro will pay this, as the company appointed administrators the day before the ruling was made. According to its last set of accounts, the company had only £666,025 in shareholder funds.

'A win for the establishment'

Reacting to the court’s decision, Baroness Mone called it "shocking but all too predictable".

"It's nothing less than an Establishment win for the government in a situation that was too big for them to lose," she said in a social media post.

A spokesperson for Mr Barrowman described the decision as "a travesty of justice".

"Mrs Justice Cockerill's decision has no resemblance to what really happened during the month-long trial, in which PPE Medpro convincingly argued that its gowns were sterile," the spokesperson explained.