You Can “Mone" As Much As you Want , but you have failed to prove a failure to mitigate. Pay Up!

The burden of proving a failure to mitigate loss lies on the party alleging it. It is a case that has to be pleaded. Once pleaded then the case has to be proven.  Here we look at a case where issues of mitigation were fully considered at trial.  The defendant attempted many sophisticated arguments but, ultimately, the complexity of the issues themselves meant that it did not establish that there was a failure to mitigate loss by the government.

Quote from Judge Cockerill: “... while the absence of any efforts to sell the gowns is on its face highly unattractive, Medpro  (the defendant) have had an opportunity to critique what was done. Careful thought has been put into advancing a case as to how DHSC fell short and that case has been tested at trial. That exercise has demonstrated that there was no realistic identifiable route to selling or deploying these gowns. DHSC’s failure to act was not one which led to the loss of an opportunity to reduce the financial damage. The case on failure to mitigate fails.  Consequently, DHSC is entitled to recover the cost of the gowns.”

THE FACTS

The defendant had supplied £122 million worth of hospital gowns to the NHS at the beginning of the Covid crisis.  These gowns were rejected on the grounds that they did not meet contractual requirements.  The judge upheld the claimant’s case that the gowns did not meet the required specification.

THE ARGUMENTS AS TO MITIGATION OF LOSS

The defendant argued that the claimant could have mitigated its loss by using the gowns elsewhere in the NHS or selling them to a foreign buyer.

WHAT HAPPENED IN A NUTSHELL

The judge rejected the defendant’s argument that the claimant had failed to mitigate its loss.  The evidence on this issue was complex and far from conclusive. There would have been major delays and considerable use of management time.  The defendant had not established that there was a ready market available that would have been willing to take the gowns.

MAIN TAKEAWAY

Remember that the failure to mitigate a loss case must first be pleaded, and then of course proven.

MY PERSONAL “MONE”.

This case arises from the controversial decision of the previous government to set up VIP lanes for covid PPE contracts.Unfortunately, in this case it is doubtful if much, or any, of the 122 million will be repaid to the taxpayer as administrators are involved with the company which is said to be in liquidation. The judgment is against the company (which Mone initially claimed she had no interest in) not her husband or her family trust.