Healthscope Appeal In $560 Million Labtests Case

4 May 2008 News Release

Healthscope Appeal In $560 Million Labtests Case Begins

Healthscope’s appeal to overturn a High Court ruling invalidating its eight-year contract to provide community pathology services to Auckland gets underway in the Court of Appeal in Wellington tomorrow (Monday May 5).

In April 2007, Healthscope Limited lodged the appeal seeking to have the decision overturned and the $560 million Labtests contract reinstated citing ‘serious errors’ in the High Court judgment.

Healthscope Managing Director, Bruce Dixon said that in the context of the Auckland, Counties-Manukau and Waitemata District Health Boards awarding this major commercial contract, Healthscope does not believe there was any unfairness or prejudice against the incumbent or any advantage to Healthscope owned Labtests.

“We were selected to provide Auckland’s community pathology services based on our significant international experience and commitment to invest in a world-class service that would be more responsive, transparent and accountable to the region it serves.”

Mr Dixon said Healthscope remained strongly committed to the contract and had invested over $20 million in the infrastructure required to meet its obligations under that contract.

He said the High Court decision also had significant implications for DHBs and other public bodies involved in tendering for services that would be addressed during the 8-day hearing in the Court of Appeal.

Interim arrangements for Auckland's pathology services were put in place by the three Auckland DHBs following the High Court decision. Dixon said the appeal was vital for certainty around the awarding of the contract.

Healthscope is now New Zealand’s second largest private pathology provider following its successful acquisition in December of New Zealand Diagnostics Group Limited (NZDG).

The Groups’ 11 Southern Community Laboratories around the country have long-term contracts to provide community and hospital pathology to the Otago-Southland, Canterbury, Hawke’s Bay and Lakes District Health Boards. Healthscope also runs Northland Pathology Laboratory Limited providing community pathology services to the Northland region.

Appeal Details: The Appeal is set down for 8 days in the Court of Appeal in Wellington. Sitting dates are: Monday May 5 – Thursday May 8 Monday May 12 – Thursday May 15

Counsel for Labtests: Lead Counsel, Mr Gerard Curry Junior Counsel, Mr Sherridan Cook - Russell McVeagh

Media Contact: Trish Sherson will be at the Court of Appeal for the duration of the Hearing. For all media enquiries please contact Trish Sherson on 021 570 803.

About Healthscope: Healthscope wwwhealthscope.com.au, headquartered in Melbourne, was formed in 1985 and listed on the Australian Stock Exchange in 1994. It is Australia’s second largest private hospital operator. Healthscope’s pathology business was originally established in 1936. It has grown to become Australia’s third largest pathology provider. The company has market leading community pathology operations in Malaysia and Singapore. Healthscope has a market capitalisation of AUD $1.4 billion with annual revenue of AUD $1.5 billion. Its global operations employ 18,000 staff. –

ENDS

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