Closed shop to cost eye surgeons nearly $600,000

By REBECCA WALSH

Two eye surgeons and the society that represents them have been ordered to pay nearly $600,000 for working to block Australian doctors from performing routine eye procedures in Southland.

In March the Ophthalmological Society and five Southland eye doctors were found to have been party to an arrangement designed to thwart competition in the "routine cataract surgery market".

It was the first time a case had been won against individual doctors under competition law.

The surgery was mainly for elderly people, who could not afford private operations and were on public waiting lists for at least 18 months.

The case was taken by the Commerce Commission in 1998 and heard last year after ongoing legal wrangling.

In 1996 Southern Health received Government funding for an extra 225 cataract operations and tried to get two Australian ophthalmologists to perform the procedures.

But one of the doctors did not complete the operations he was contracted for after New Zealand surgeons failed to clear him to do the work.

The second was apparently told it was not in his career interests to operate in Invercargill.

Justice Warwick Gendall found there had been "concerted action by members of a profession and its professional body to assist a colleague avoid legitimate competition".

In a decision released yesterday, he fined the Ophthalmological Society of New Zealand $100,000 and two of its members a total of $30,000 for contravening the anti-competitive provisions of the Commerce Act.

Justice Gendall also ordered the society and the eye doctors involved in the case to pay $467,870 towards the commission's legal costs.

Justice Gendall said the fine represented the "first time" nature of the proceedings and was not to be taken as a guideline by other professionals or their organisations for future penalties.

The fine was likely to exhaust the society's funds and it might need to levy its members further, he said.

Commerce Commission chairwoman Paula Rebstock said it was difficult to imagine a clearer case of deliberate anti-competitive conduct.

Eighteen years after the Commerce Act came into effect, it was disappointing that a medical professional body did not seem to be aware it was subject to the act.

"This was an abuse of the trust and privilege allowed to this profession, and it is particularly repugnant that the defendants used the language of patient safety as a convenient excuse to disguise their own self-interest."

Mark Williamson of lawyers Phillips Fox said the fine against the society was at the lower end of the scale compared with other cases taken under the act.