HES Ltd seeking £15m over NHS contract terminations

The company embroiled in the clinical waste stockpiling controversy is seeking £15m from the NHS after accusing 17 trusts of unlawfully terminating their contracts.

Healthcare Environmental Services, which was found to be storing waste including human body parts over five times their permit levels, has written to trusts in Yorkshire and Humber threatening legal action unless they reverse their decision to terminate their contracts with the company.

Outsourcing giant Mitie has stepped in to take over the services as part of a £1m government contingency plan, after NHS Improvement told trusts to terminate their contracts with HES.

The contingency plan involves storing waste temporarily outside hospitals, and transporting it in vehicles which would normally be deemed unsuitable for such cargo but for the exceptional circumstances to incinerators not built for clinical waste disposal.

HES’ letter to trusts, seen by HSJ, accuses them of ending their contracts without first discussing performance issues with the company, which its lawyers from Shoosmiths say constitute a “repudiatory breach”.

This meant the company was not given a chance to explain its proposals to continue to operate under the terms of the contract and fulfil its obligations to trusts.

“In not discussing with our client your apparent concerns regarding our client’s performance under the contract…you have unreasonably denied our client the ability to perform services under the contract,” the letter states.

HSJ understands HES wants £15m in return for its loss of contracts, and the company will also seek further financial compensation for damages.

The letter said HES had “no desire to engage in protracted and potentially very expensive litigation with the trust”, but the company felt it had been “left with no option”.

HES blamed its failure to dispose of waste collected from the NHS fast enough on a lack of incineration capacity in the UK. This has been repeatedly denied by health minister Steve Barclay and the Environment Agency.

Last month the EA closed part of HES’ Normanton site in Yorkshire, where waste levels reached five times the permitted amount.

Meanwhile, the regulator confirmed to HSJ that the company had cleared excess waste at its Newcastle site in accordance with a deadline last Thursday.

HES has until 11 January to clear extra waste at its Nottingham site, and until 28 January to clear its Bradford site of waste which has breached permitted levels.

The Department of Health and Social Care, NHSI, and the EA have repeatedly said there is no threat to public health.


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