Of Counsel Alina Neal and Associate Genevieve Douglas explore the PPE Medpro judgment in Thomson Reuters Regulatory Intelligence

Writing in Thomson Reuters Regulatory Intelligence, Of Counsel Alina Neal and Associate Genevieve Douglas explore the practical lessons from the Commercial Court’s PPE Medpro judgment for contracting parties and practitioners alike.

Alina and Genevieve’s article was published in Thomson Reuters Regulatory Intelligence, 30 October 2025.

Introduction

The recent judgment in Secretary of State for Health and Social Care v PPE Medpro Ltd [2025] EWHC 2486 (Comm) has been widely publicised due to the public interest in the Conservative Government’s purported use of the “VIP lane” during the pandemic, which favoured politically connected people. Whilst much of the coverage has centred on the politics, little has been said about the decision’s core contract-law lessons, particularly on contractual interpretation, estoppel and mitigation.

We step back from the headlines to examine the legal implications of the Commercial Court’s judgment and unpack the court’s approach to interpreting urgent procurement contracts, the limits on the parties’ ability to rely on representations, and what “reasonable steps” to mitigate loss looked like in this context.

Background

At the height of the 2020 pandemic, the Department of Health and Social Care (“DHSC”) entered into an ex works contract with PPE Medpro Limited (“Medpro”) for approximately £122 million of “sterile” surgical gowns. The DHSC’s freight agent, Uniserve, collected the goods from sterilisation facilities in China in July 2020. Shipments reached the UK between August and October 2020. The DHSC inspected the gowns sometime after delivery into the UK and concluded that the gowns were defective and failed to meet the core contractual sterility requirements. On 23 December 2020, the DHSC issued a rejection notice and thereafter sought repayment of the contract price from Medpro, together with c.£8 million in storage and disposal costs.

The judgment

On 1 October 2025, Cockerill J held that Medpro was in breach of contract, finding that the gowns failed to meet the contract’s requirement for a validated process evidencing sterility. Medpro’s estoppel defence failed, with the court rejecting the suggestion that pre-contract representations by the DHSC softened the hard-edged contract specifications, emphasising that informal communications do not dilute express contractual terms.

Although the court found the DHSC’s rejection of the gowns was ineffective, it nonetheless awarded damages equal to the contract price, holding that Medpro had not shown any realistic route by which the DHSC could have mitigated its loss. By contrast, the DHSC’s claim for storage costs was dismissed for want of proof.

Contractual interpretation

It was common ground that the contract required Medpro to supply gowns that met a specified sterility assurance level (“SAL”). One of the key issues before the court was whether Medpro was also obliged to demonstrate that the gowns actually met that standard in the form of documentation of the process.

Medpro argued that on the true construction of the contract, the parties had agreed upfront that the SAL of the gowns not yet manufactured would be conclusively established by the documents scheduled to the contract as annexes.

The court held that the obligation to demonstrate actual compliance in the form of documentation was inherent in the obligation to deliver goods to the required SAL, otherwise, there would be no reason to include any SAL requirement in the contract at all; this would have been an uncommercial reading which would require the striking through of large parts of the agreed terms.

Estoppel

As an alternative to its case on construction, Medpro argued that the DHSC had made pre-contract representations that the gowns would be either treated as compliant or accepted, thereby estopping the DHSC from later claiming otherwise.

Medpro’s estoppel defence failed because: (i) there was no clear and unambiguous representation capable of founding an estoppel; (ii) there was no evidence of actual reliance; and (iii) in any event, any purported reliance would have been unreasonable against the written contractual terms, which included a non-reliance and entire agreement clause.

The court emphasised that “contractual estoppel” cannot be used to rewrite an agreed bargain. Robust non-reliance and entire agreement clauses are effective in foreclosing reliance on pre-contract statements short of fraud.

Inspection, rejection and damages

The contract required the DHSC to inspect visually the gowns within 21 days of delivery and to serve any rejection notice within a reasonable time after any defect was (or should have been) discovered. Delivery was on ex works terms, which meant that delivery legally occurred when the goods were made available for collection from sterilisation facilities in China (in mid-July 2020). The court found that because the DHSC had an agent on the ground, a basic visual check in China was feasible. Instead, the first documented inspection was a photo review on 11 September 2020, and formal rejection was issued on 23 December 2020, both of which fell outside the contract’s inspection/rejection window. On that basis, the court held that the DHSC had lost its contractual right to reject the goods.

However, this does not exhaust the buyer’s rights: rejection mechanics and damages for breach are distinct. Since the gowns were fundamentally non-compliant and unsuitable for their contracted purpose, the court awarded expectation damages equal to the contract price, notwithstanding the ineffective rejection.

Mitigation and ancillary costs

The central fight on quantum was whether the DHSC could and should have reduced its losses by repurposing the non-sterile gowns within the NHS or reselling them abroad. The court emphasised that Medpro bore the burden of identifying concrete, realistic steps the DHSC ought to have taken. Medpro ultimately failed to demonstrate that there was a realistic identifiable route to re-selling or deploying the gowns. On the evidence, the court held the gowns had no recoverable value and awarded the DHSC the contract price.

By contrast, the DHSC’s claim for storage costs failed for want of proof, despite being contractually entitled to recover such costs, and a spreadsheet of estimated costs and second-hand testimony was not sufficient to establish quantum.

Practical takeaways

This ruling provides a number of important takeaways for contracting parties and practitioners alike.

Firstly, in terms of when a contract imposes a technical requirement, it is crucial to specify the evidence that would establish compliance. This might include validation reports, certificates, sample test results.

Pre-contract reviews or tick-box approvals also seldom constitute clear representations that trump express terms. The judgment reinforces that non-reliance and entire agreement clauses remain decisive and should therefore be clearly drafted to ensure that they cover representations, warranties and undertakings.

The decision also underscores that any estoppel defence turns on evidence of reliance and inducement, especially between sophisticated parties where inducement will not be presumed.

On the question of mitigation, the court treated the issue as closely linked to causation. The burden rests with the defendant to identify the specific, reasonable steps the claimant could (and should) have taken to mitigate loss. Absent identifying such steps, the claimant may still recover the full contract price as damages.

Finally, claimants seeking ancillary heads of loss must come armed with primary records and witnesses with first-hand knowledge.