DHSC’s £122m claim against Michelle Mone-linked company reaches high court

Government is seeking to recover money paid to PPE Medpro, which was recommended to ministers by peer

While reporting on this issue, we bear in mind this is an ongoing legal case…

When NHS workers were dying for lack of proper PPE, Conservative peer Michelle Mone’s associates secured a £121 million contract, now the subject of a High Court battle after the government claims the gowns were unusable.

The High Court this week is hearing what may be one of the most significant public procurement disputes in modern British history. The Department of Health and Social Care is demanding the return of £121 million paid to PPE Medpro for 25 million surgical gowns that, according to government lawyers, failed basic sterility requirements and were never used by the NHS. The case cuts straight to the heart of the Tories’ controversial “VIP lane”, a pandemic-era fast track for the politically connected.

Michelle Mone, the lingerie entrepreneur turned Tory peer, initially denied any involvement in PPE Medpro before admitting in a 2023 BBC interview that she had “lied to the media.” Court documents reveal that leaked HSBC papers showed at least £65 million from the company’s profits flowing to her husband Doug Barrowman’s Isle of Man accounts, with £29 million subsequently transferred to an offshore trust benefiting Mone and her children.

The Government’s Case

According to the Department of Health’s legal team, the facts are stark. PPE Medpro was awarded contracts worth over £200 million after Mone approached then-Cabinet Office minister Michael Gove. While the company’s face masks were accepted, the surgical gowns tell a different story entirely.

Paul Stanley KC, representing the government, told the court that the contract required 99.9999% of gowns to be sterile, meaning only one in a million could be unusable. Instead, when 140 gowns were tested, 103 failed sterility requirements. The government claims the company failed to follow validated sterilisation processes and supplied gowns with invalid CE marking.

The gowns were delivered between August and October 2020, with £121,999,219 paid to PPE Medpro. They were rejected in December 2020 and remain in storage, unused and unusable. The government is seeking the full contract value plus £8.6 million in storage and transport costs.

PPE Medpro categorically denies breaching its contractual obligations. Charles Samek KC, representing the company, argues that any contamination occurred after delivery due to “transport and storage conditions” managed by the Department of Health. He claims the testing was conducted months after rejection and that samples were not representative of the whole batch.

The company’s lawyers characterise this as a case of “buyer’s remorse,” alleging that PPE Medpro has been “singled out for unfair treatment” possibly due to “the high profiles of those said to be associated with” the company. They argue the government is seeking to escape “a bargain it wished it never entered into” while sitting on “over £8bn of purchased and unused PPE.”

Like Pigs to the Trough… The VIP Lane System

The case highlights the broader questions surrounding the Tory government’s VIP lane procurement process, which gave priority to companies recommended by people with political connections. This system processed contracts worth billions during the pandemic, with critics arguing it prioritised political access over competence and due diligence.

In 2022, the high court found the government broke the law by prioritising a pest control firm and a private equity firm with political connections for lucrative COVID contracts, the High Court ruled today.

The government’s use of a so-called VIP lane to award PPE contracts to two companies during the first COVID wave was unlawful, the High Court has ruled.

The legal challenge, brought by the Good Law Project and EveryDoctor, focused on just a few of the contracts awarded under the scheme.

Some £1.7bn worth of contracts to deliver personal protective equipment (PPE) were awarded through the scheme during the first wave of the pandemic.

They took legal action over more than £340m in contracts awarded in 2020 to pest control firm PestFix and a contract worth around £252m to the hedge fund Ayanda Capital.

Michael Gove was lobbied by the firm that became the single biggest recipient of PPE contracts through the VIP lane in 2020 in the weeks before it was awarded the first of a series of deals worth £680m, new emails reveal.

Emails released by the government show Gove, then a Cabinet Office minister, had a phone call with a founder of Unispace, an office interior design firm, on 24 March 2020 – the day after the first national lockdown was announced.

Unispace was at that point controlled by the Australian businessman Gareth Hales – who is the son of the global leader of the Plymouth Brethren Christian sect, Bruce D Hales – and another church member, Anthony Hazell.

Firms linked to Plymouth Brethren figures overall won more than £2bn of UK testing and PPE contracts during the pandemic, the Open and Candid blog has calculated. The Plymouth Brethren Christian sect has about 50,000 members worldwide and follows a doctrine of separation from the outside world.

The revelation also adds to the links between Gove and several recipients of the most controversial deals processed through the VIP lane during the pandemic. He was behind the referral of David Meller, a Conservative donor who had personally backed his leadership campaign. Meller’s design firm won six PPE supply contracts worth £164m.

Gove was also mentioned in correspondence from Michelle Mone to another Cabinet Office minister in which she was offering to supply PPE “through my team in Hong Kong”, saying “Michael Gove has asked to urgently contact you”. 

During the fallout, Michelle Mone pointed the shit end of the stick back at Michael Gove in a tweet saying: “Many hundreds of stories have been written about me, but who is investigating what went on between Michael Gove and a PPE firm owned by donor David Mellor? Sounds like this story is just the tip of the iceberg…”

The High Court was told the VIP lane for PPE contracts was reserved for referrals from MPs, ministers and senior officials, as the Department for Health – under-then Health Secretary Matt Hancock – had “prioritised suppliers including PestFix and Ayanda because of who they knew, not what they could deliver”.

The department contested the claim, telling the court it “wholeheartedly” rejected the case against it and that the VIP lane was rational and resulted in a “large number of credible offers” in an environment where PPE deals often failed within “minutes”.

Mrs Justice O’Farrell said that it was unlawful to give the two companies preferential treatment on the basis of being part of the VIP lane.

The Court noted that the overwhelming majority by value of the product supplied by Pestfix and Ayanda could not be used in the NHS. 

An independent investigation by the BBC has also revealed issues with the product supplied by Clandeboye which were not disclosed to the High Court. Good Law Project believes that the Government misled the Court and is in correspondence with lawyers for the Secretary of State.

The Judge found that, even though Pestfix and Ayanda received unlawful preferential treatment via the VIP lane, they would likely have been awarded contracts anyway. The Judge also refused to allow publication of how much money was wasted by the Government’s failure to carry out technical assurance on the PPE supplied by Pestfix and Ayanda

The judge also found that “sufficient financial due diligence” was carried out in respect of both sets of contracts.

Court documents show that Mone remained “active throughout” contract negotiations, with communications going through company director Anthony Page. According to government submissions, Mone stated that Barrowman had “years of experience in manufacturing, procurement and management of supply chains.”

The Money Trail

The financial arrangements revealed in court documents paint a complex picture of offshore wealth management. According to leaked HSBC documents reported by the Guardian, profits from PPE Medpro contracts flowed through multiple jurisdictions before reaching a trust structure benefiting both the Mone and Barrowman families.

In her 2023 BBC interview, Mone acknowledged that Barrowman had made “more than £60m in profits” from the PPE contracts. Both deny any wrongdoing, with their legal representatives arguing that profits from legitimate business activities are not relevant to the contractual dispute over product quality.

Political and Public Interest Implications

The case has broader implications for how emergency procurement operates during national crises. While the government stresses this is “simply about compliance” with technical standards, critics argue it represents a fundamental failure of public accountability when political connections appear to influence contract awards.

The opposition has pointed to this case as evidence of systematic failures in Conservative pandemic procurement, with billions in public money committed to suppliers who may not have met basic quality standards. The government maintains that emergency conditions required rapid decision-making and that appropriate legal remedies are being pursued where contracts were not fulfilled.

What’s at Stake

Beyond the immediate financial implications, this case will establish important precedents for government contract recovery and the accountability of politically connected suppliers. If the government succeeds, it could pave the way for similar actions against other VIP lane suppliers whose products failed to meet specifications.

The five-week trial will ultimately determine whether PPE Medpro must repay the £121 million, but the broader questions about emergency procurement, political influence, and public accountability will likely continue to resonate long after the legal proceedings conclude.

Current Status

Neither Mone nor Barrowman is expected to give evidence in the trial, and both were absent from the opening day of proceedings. The case continues before Mrs Justice Cockerill, with judgment expected in writing at a later date.

Legal Note: This case is currently before the High Court, with PPE Medpro and associated parties denying any wrongdoing and contesting the government’s claims. No criminal proceedings have been brought, and the matter remains subject to judicial determination.

Paul Knaggs