A new twist in PPE saga as disputes emerge

Louise Dobson, Partner, Dispute Resolution at Addleshaw GoddardLouise Dobson, Partner, Dispute Resolution at Addleshaw Goddard
Louise Dobson, Partner, Dispute Resolution at Addleshaw Goddard
Yorkshire was one of the first sites where a confirmed case of Covid-19 was reported, when a student fell ill with the virus in January 2020, writes Louise Dobson, Partner, Dispute Resolution at Addleshaw Goddard.

Less than two months later the World Health Organization, the international body responsible for public health, announced that Covid-19 was being classified as a global 'pandemic'.

This announcement marked a pivotal moment for countries around the world, whereby politicians and health experts alike were responsible for navigating the respective response to the pandemic.

As scientists focussed on understanding the virus, the more immediate concern was sourcing personal protective equipment – more commonly referred to as PPE – in order to protect staff treating patients and reduce transmission in clinical and care settings.

The sharp rise of Covid-19 cases resulted in a collective, global scramble for PPE. A country's reputation in the handling of the virus was, at this point, largely measured by the units of protective equipment it obtained.

But securing PPE in the era of Covid-19 wasn't straightforward. The crippling bottleneck of countries looking to secure protective equipment en masse meant resources were scarce.

Since the rollout of the UK Government's vaccination programme, hospital admissions for Covid-19, which peaked at 4,583 patients in a single day, have declined.

The procurement of PPE has also stabilised as supply chains have had some time to recalibrate.

But there's a new issue on the horizon for PPE suppliers.

In the haste to secure protective equipment, there was over ordering of equipment that can now no longer be used. Reasons vary as to why this equipment will likely go to waste the vast and often costly stock is sitting unused.

In some instances, the urgency to procure stock caused confusion on how much was required, and how much would be used over the course of the coming weeks and months.

These miscalculations then rippled throughout the supply chain whereby PPE was then delivered at the wrong time and, sometimes, to the wrong location.

There may be a significant number of firms that could find themselves out of pocket due to the unused equipment, and as a result we have seen a rise in disputes between suppliers and buyers of such equipment.

Many suppliers don't realise that they can, and should, act on supply contracts where the buyer is seeking a refund or that just aren't honoured altogether. Understanding how to approach such disputes can be complex.

Having represented parties throughout the supply chain on similar disputes, we've identified a number of steps any business should take if they find themselves in this difficult and costly situation.

The first is to review the contract. It seems obvious, but reviewing the initial agreement will help clarify important details, such as number of units, specification of the equipment and timeframe of delivery.

If a supplier is able to prove these requirements have been met, it makes it incredibly difficult for a buyer to justify either withholding payment or seeking to back-track on the deal agreed.

Similarly vital for suppliers is ensuring they keep hold of samples for all batches. PPE often has to meet certain requirements, and we have seen an increase in cases where questions are being raised about the product meeting those requirements – sometimes months and months after delivery has taken place

Thirdly, firms must keep hold of documents that they might otherwise have deleted, such as emails, contracts and invoices. Being able to provide a paper trail to create the full picture of the exchange between buyer and supplier can be the deciding factor in many of these disputes.

Suppliers were thrown into a state of flux during the pandemic and had an incredibly challenging time trying to deliver products that were so desperately needed.

Now, as we're slowly edging towards normality, many are grappling with damaged supply chains, long-term logistical issues, potential reputational harm and crippling cash flow problems. Honouring these contracts is not simply a 'nice-to-have' – for many it’s the difference between keeping open its doors.


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