The parties’ cases on construction
The parties’ cases on construction
The starting point here is the complexity of the contractual documentation, which offered scope for the rather different approaches of the parties.
As already noted the Contract was comprised in a number of documents. Section 5 of the Order Form and Schedule 1, clause 2, set out an order of priority for construction purposes, to apply if there was a “conflict” between different provisions:
The Order Form, including in order of priority:
the Authority’s requirements in the form of its specification and other statements and requirements;
any clarifications to the Supplier’s responses, proposals and/or method statements;
the Supplier’s responses, proposals and/or method statements;
Schedule 1: Key Provisions;
Schedule 2: Terms and Conditions;
Schedule 3: Definitions and Interpretations;
Any other documentation forming part of the Contract in the date order in which such documentation was created with the more recent documentation taking precedence over older documentation to the extent only of any conflict.
DHSC predictably rests heavily on the terms set out in some detail in Schedule 2, which plainly signpost the applicability of the relevant legislation on medical devices, including CE marking and EN 556. Medpro however highlights the ETRD and the Key Provisions, against the backdrop of the EC Recommendation as well as the wider factual background including the crisis created by the pandemic and the DHSC’s ability to apply for a derogation. While accepting the existence and prima facie effect of the extensive references to incorporation of relevant legal standards it argued that that (i) the ETRD as the “specification”, (ii) the absence of specification for a CE mark in sections 6 and 7 of the Order Form, (iii) the reference only to EN 13795, and (iv) the absence of full (notified body) CE numbering in the photos in the Annexes means that insofar as Schedule 2 terms would require CE marking or compliance with EN 556, those provisions were not, on the true construction of the contract, part of the agreed terms.
This conflict is therefore the route to the issues identified above. As to the first of those issues, Medpro says that the same points lead to the conclusion that there was no independent contractual obligation to demonstrate a validated process.
At the same time as the existence of those issues there is significant common ground, in that Medpro accepts that on its true construction the Contract required that the gowns, when delivered, “should be sterile to a sterility assurance level (SAL) of 10-6, i.e. that no more than one in a million gowns should not be sterile.”As explained below, on its own case what Medpro really means by this is that the gowns were required to have a SAL of 10-6. As it put it in opening submissions: “[Medpro] accepts that it was obliged under its equivalent technical solution … to provide gowns to a SAL of 10-6”. What is does not accept is that “there was any independent contractual obligation to demonstrate a validated process”.
This point, as to a contractual obligation to provide gowns with an SAL of 10-6 is plainly rightly accepted. The route to contractual construction which Medpro explicitly accepts and advocates is via the ETRD. This was the document identified as “the specs” which it says it relied on. It is also the document with which Medpro had to comply pursuant to Schedule 1, clause 2.2. As noted above the ETRD made clear the SAL requirement.
It is therefore only necessary to note in passing that other routes to this same requirement could be taken, depending on the view which is taken of the contractual hierarchy of materials and what fits within it. This could be via any of the following:
as an aspect of fitness for purpose (Schedule 2, clause 7.1.1) and/or s 14(3) of the Sale of Goods Act 1979;
as a requirement if the gowns were to meet their description (Sale of Goods Act 1979, s 13);
as an aspect of the requirement of satisfactory quality (Sale of Goods Act 1979, s 14(2));
pursuant to Schedule 1, clause 12;
pursuant to Schedule 2, clause 7.2.
- Heading
- This judgment was handed down by the court in person and by circulation to the parties’ representatives by email and released to The National Archives. The date and time for hand-down is deemed to be
- Sterility 101: An Introduction to sterility and Medical Device Law
- ISO 11137: Requirements of a Sterilisation Process
- Sterility level: EN 556
- Medical devices: MD Directive and MDR 2002
- Other relevant standards
- Summary
- Factual Background
- The PPE Cell
- The Recommendation
- The Essential Technical Requirements Document (“ETRD”)
- Precontractual Negotiations
- Closing
- Final Approval and Contract
- Manufacturing, delivery and inspection
- Rejection of the Gowns
- Testing of Gowns
- The Trial and issues
- The Contractual Claim
- The parties’ cases on construction
- The significance of the accepted obligation to deliver gowns with an SAL of 10 -6
- Was there breach of a requirement for a formally validated process in this case?
- Did the Contract require EN 556 or an Equivalent Technical Solution?
- Did the Contract require CE marking?
- The original case: Statistics, Physical Testing and Sterility
- Estoppel and related concepts
- Representation/assumption: clear?
- Approval of an ETS in place of EN 556
- Meeting the technical requirements/ No requirement to have a CE mark with an NB number
- Reliance
- Estoppel and validated process/SAL
- Non-Reliance and Entire Understanding Clauses
- Remedies
- Was the right to reject lost?
- Damages: The value of the Gowns and Mitigation
- Damages: The Claim for Storage Costs and Gown Disposal
- The Counterclaim
- Common mistake and rectification
- Negligent misstatement
- Conclusion
- Annex 1: Statistics, Physical testing and Sterility
- The testing
- Statistics
- The evidence and its implications
- The evidence gap
- Conclusion
- Annex 2: Relevant provisions of the Contract The Contract between DHSC and Medpro consists of a front page and several documents
- Order Form Section 5 of the Order Form “ The Supplier shall supply the deliverable described below on the terms set out in this Order Form and the Schedules and Annex A. Unless the Contract otherwise requires, c
- Section 7 of the Order Form is headed “Specification” and states: “The specification of the Deliverables is as set out in Annex A.1 – A.9 [26.06.2020]. Not as embedded/attached documents. Please confi
- Schedule 1
- Clause 2.2 of Schedule 1 states that the Order Form is to “ include, without limitation, the Authority’s requirements in the form of its specification and other statements and requirements, the Suppli
- Clause 3 of Schedule 1 is headed “ Quality assurance standards ” and states: “The following quality assurance standards shall apply, as appropriate, to the manufacture, supply, and/or installation of
- Conclusions
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