Media Release

Date: 19 July 2007 - embargoed for use after 11.30am

Medlab Discontinues Legal Proceedings

New Zealand Diagnostic Group trading as Medlab Hamilton has discontinued its legal proceedings against Waikato District Health Board and Pathology Associates Ltd (Pathlab).

The company also discontinued legal proceedings against Bay of Plenty District Health Board and Pathlab.

The decisions came following an internal review by Medlab. Chief executive and director Ian Vickers said it was a very difficult decision which in the end was based around practical considerations of the facts that came forward in the discovery process.

"We carefully reviewed all of the information available to us, as did our legal representatives who provided a separate analysis to our board of directors.

"Based on these reviews we were reluctantly forced to conclude that our case against the Waikato DHB would be unsuccessful," said Mr Vickers.

"Consequentially it was decided that there was also no merit in continuing with the proceedings against both the Waikato and Bay of Plenty DHBs.

"The decision was the most difficult one that we have had to make and the outcome is extremely disappointing for us all. It is however based on a realistic view of the information that we have available to us," he said.

The proceedings were discontinued late yesterday (Wednesday) after agreement between the parties.

Waikato DHB acting chief executive Jerry Rickman today said he was pleased with Medlab's decision and stood by the Waikato DHB's processes. "We can put this behind us now and work with Pathlab.

"In the end it wasn't in anyone's interests to put more money into court proceedings," he said.

Acting board chair Sally Christie said the financial savings in going with Pathlab had been clearly identified.

"We look forward to moving forward."

Pathlab director Stephen May said the company would now get on with the job of taking over the lab services. A new building on Tristram St will house consulting rooms, administration facilities and a new state-of-the art lab. Pathlab will service the whole of the Waikato DHB region.

Waikato DHB first went to the market in September 2006 seeking proposals. They were evaluated against publicly-notified criteria and by a team of experts which included independent GPs and pathologist members.

ENDS