Lab battle set for another round
The legal battle over Auckland’s $560 million lab contract was destined to end in an appeal to the Supreme Court, says Labtest’s Australian owners Healthscope.
Diagnostic Medlab, the current providers of lab testing, will seek leave from the country’s highest court to overturn last week’s Court of Appeal decision that handed back the contract to rivals Labtest. The Court of Appeal decision nullified a High Court review that last year found former Auckland District Health Board member Tony Bierre was inappropriately involved with Labtest.
Labtest was awarded the contract in 2006.
“We wish we didn’t have to go there,” says Diagnostic Medlab chief executive Arthur Morris.
But Healthscope may have gone to the Supreme Court themselves if the latest decision hadn’t gone their way.
“We’ve invested an enormous amount of money in New Zealand and we weren’t going to walk away,” Healthscope director of strategy and business development Joe Czyzewski says.
Mr Morris, whose company is run by Australian-based Sonic Healthcare, says a number of testing centres will face the axe no matter who gets the contract.
His main fear if the Supreme Court refuses to hear their case is that Labtest will reduce the number of staff involved in sample collection.
“With half the rooms and staff numbers they will have significant difficulty in servicing the population.”
But Mr Czyzewski says it’s difficult to know how many staff they’ll need because it’s unclear how many people Diagnostic Medlab employ.
He says they will start the process of setting up testing facilities despite the threat of an appeal.
“There’s not much we can do about that. We’re keen to get up and running.”
Diagnostic Medlab will continue to provide services until Labtest takes over or while the appeal process is being heard.
Regional health boards spokesman Pat Snedden says they are pleased the Court of Appeal clarified the processes they used to decide who got the contract.
“They were clear about the fact that Dr Bierre did have a conflict, but it was managed appropriately by the DHB. The court agreed we were direct and up-front.”