KEY POINTS:
Lab Tests Auckland could start providing community laboratory services throughout the region within nine months, if the Court of Appeal agreed to validate its contract, the company's lawyers told the court yesterday.
In an appeal hearing that started in Wellington yesterday and which is scheduled to run for eight days, the company said Justice Raynor Asher's High Court decision invalidating the contract in 2007 was wrong in law.
The eight-year, $560 million contract awarded to Lab Tests by the Auckland region's three district health boards in 2006 was to save more than $15 million a year. The incumbent laboratory company, Diagnostic Medlab (DML), took Lab Tests and the boards to court and won.
The health boards subsequently negotiated an interim deal with DML which runs to the end of this year.
The awarding of the Lab Tests contract - for community medical testing for 1.4 million people - and it being overturned by the High Court led to a medical and political storm.
Justice Asher ruled that the health boards did not conduct a fair tender process before awarding the contract to Lab Tests.
He said that information acquired by Lab Tests' then-chief executive, pathologist Dr Tony Bierre, who was an elected member of the Auckland board, "greatly advantaged the Lab Tests bid and thereby damaged the integrity of the tendering process".
In their submissions yesterday, Lab Tests lawyers Gerard Curry and Sherridan Cook said Justice Asher "erred in finding that the choice between competing providers could be the subject of judicial review" and they asked the Court of Appeal to reverse his decision overturning the contract. They also said he erred in his ruling regarding Dr Bierre.
The company could resume the set-up of its Auckland facility and be in operation within six to nine months, they said. "Lead times on major instrument platforms are up to nine months, but these could be reduced; only relatively minor work remains to be done to Lab Tests' central clinical laboratory; a six-month lead time is sufficient for establishing collection centres and in-house courier routes; six months is sufficient to recruit staff and complete IT systems ... "
And Southern Community Laboratories and Northland Pathology Laboratory - members of the Healthscope group, which owns Lab Tests - could provide temporary cover during the transition from DML to Lab Tests.
The company's lawyers said Dr Bierre disclosed all his conflicts-of-interest when he joined the health board, he disclosed his perceived conflicts each time he was asked for advice on pathology matters, and any legal interest he had in the request-for-proposal transaction that led to the contract was appropriately managed.
