Govt's 'VIP lane' contract for two Covid PPE companies 'unlawful', High Court rules

12 January 2022, 11:15 | Updated: 12 January 2022, 13:42

The Government's awarding of PPE contracts to two companies was unlawful, the High Court has ruled
The Government's awarding of PPE contracts to two companies was unlawful, the High Court has ruled. Picture: Alamy

By Will Taylor

The Government's use of a "VIP lane" to give contracts for personal protective equipment (PPE) to two companies was unlawful, the High Court has ruled.

The challenge was brought by two campaign groups - Good Law Project and EveryDoctor - claiming that the Department of Health and Social Care (DHSC) unlawfully awarded contracts to supply PPE during the first wave of the pandemic.

The court found the operation of the High Priority Lane breached "the obligation of equal treatment" for firms.

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The campaign took legal action over more than £340 million in contracts awarded to pest control firm PestFix, as well as a contract worth around £252 million to the hedge fund Ayanda Capital.

The High Court was told the High Priority Lane was reserved for referrals from MPs, ministers and senior officials, adding that DHSC "then prioritised suppliers including PestFix and Ayanda because of who they knew, not what they could deliver".

The groups argued that the use of the VIP lane gave an unfair, unlawful advantage to some companies.

DHSC 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".

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In a judgment on Wednesday, 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.

However, she did also find that the companies' offers "justified priority treatment on its merits" and both were "very likely" to have been awarded contracts even without the VIP lane.

"PestFix offered high volumes of a range of PPE items that were in urgent demand," she said.

"It had an established business in sourcing PPE, plausible contacts with manufacturers... and could provide a logistical solution to transport the PPE from the manufacturers to the UK.

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"These skills, experience, contacts and credibility justified priority consideration of the high volume offers.

"Regardless whether they were made through the portal and assessed by the opportunities team, or were assessed by the high priority lane team, it is very likely that the offers would have resulted in the award of the PestFix contracts."

The judge made similar findings in relation to the contract awarded to hedge fund Ayanda Capital.

Jo Maugham, Director of Good Law Project said the judgement was "unsurprising".

"Never again should any Government treat a public health crisis as an opportunity to enrich its associates and donors at public expense," she added.

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Dr Julia Grace Patterson, Chief Executive of EveryDoctor, said NHS staff did not have the PPE they needed in first lockdown, and claimed many died as a result.

She added: "The government must never again be allowed to conduct themselves in this manner during a national healthcare crisis."

Mrs Justice O'Farrell found the DHSC had complied with the duty to give "clear and sufficient reasons" for awarding both sets of contracts and that "sufficient financial due diligence" and technical verification was carried out.

Former Health Secretary Matt Hancock welcomed the judgment.

A spokesman for Mr Hancock said: "We are delighted that the Department for Health has won this case, as the court found that the priority treatment was 'justified' and rightly refused to grant any rectification for the way PPE was urgently bought in the height of the crisis.

"At the time, a huge number of people were doing everything they could to get PPE to the front line as fast as possible in a national emergency.

"As the National Audit Office has confirmed, ministers had no involvement in procurement decisions or contract management.

"The department was doing the best it possibly could within the rules to respond to an unprecedented situation, and crucially, the court has rightly found that action was justified and absolutely no rectification or further action is necessary."