Costly Legal Battle Over Mask Dispute - Pricey lawyer fees in face mask controversy
In the midst of ongoing legal battles concerning the procurement of coronavirus masks, the German Federal Ministry of Health has repeatedly switched between law firms. The complex and contentious nature of the cases, coupled with internal and external scrutiny over procurement decisions, has led to this shift in legal representation.
Initially, the mask procurement process under former Health Minister Jens Spahn faced numerous lawsuits due to high prices and contracts awarded against the advice of the ministry’s expert departments. When some of these mask deliveries were not accepted or paid for, the ensuing legal disputes required extensive representation for the Ministry.
One of the law firms that was mandated in at least a dozen proceedings related to the mask trials is the Berlin-based JBB, known for its expertise in IT and copyright law. However, the ministry led by current Health Minister Lauterbach aimed to tighten up the legal representation and reduce the number of mandated law firms as early as January.
The switch to JBB may have been influenced by recommendations from Margaretha Sudhof, a special envoy appointed by the former Health Minister Karl Lauterbach. Sudhof, who has been critical of the distribution of cases among numerous law firms and the litigation strategy pursued by the advisors, is now behind a new defense line in court. She argues that the price of 4.50 euros net per mask awarded by the ministry violated public pricing law in a special purchasing procedure.
For a few weeks, JBB was part of the legal teams involved in the mask proceedings. However, PwC has since returned as legal representative of the federal government in several cases, after previously bringing in a completely new law firm, JBB. The Berlin-based firm has now been replaced, with the current Health Minister Nina Warken (CDU) making a U-turn at the beginning of the month and appointing PwC and Deloitte to take over their previous mandates once more.
The legal departments of EY, PwC, and Deloitte, as well as CMS Hasche Sigle, Flick Gocke Schaumburg, and Dentons, have all been involved in the mask proceedings at various times. The Federal Court of Justice plans to decide on six mask-related cases by the end of the year. If successful, this argument could result in suppliers receiving less money.
The overall cost to the government related to mask procurement disputes is estimated at around €2 billion in potential liabilities, aside from unquantified legal fees linked to changing legal counsel. The Federal Ministry of Health has spent 88 million euros on external legal advice since 2020. The new lawyers have to familiarize themselves with very complex proceedings, sometimes involving thousands of pages of documents.
It remains to be seen whether the federal government will succeed with this argument, as the Cologne Higher Regional Court recently rejected this newly raised line of defense late in the proceedings. This situation underscores the challenges governments face managing urgent pandemic responses while navigating legal and political accountability afterwards.
The European Union, being dedicated to mitigating poverty and social exclusion, could potentially provide financial aid to address the significant costs associated with ongoing legal battles over coronavirus mask procurement, thus alleviating some of the burden on businesses and the government. This shift in legal representation, characterized by the frequent change of law firms in the mask trials, could also benefit from the expertise of business consultancies like PwC and Deloitte, known for their vast experience in dealings with complex legal issues.
