The Court of Appeal has handed back the $560 million contract for Auckland pathology testing to Labtests, overturning a High Court decision last year.
High Court Justice Raynor Asher had ruled last year that the decision of Auckland, Waitemata and Counties Manukau District Health Boards to hand thecontract to Labtests ahead of incumbents Diagnostic Medlab was invalid.
Justice Asher said that by accepting a proposal from a company which included then-Auckland DHB member Dr Tony Bierre, the boards failed to ensure the tendering process was conducted fairly.
He also said the DHBs should have consulted better with Primary Health Organisations representing Auckland GPs about the proposed change.
But following an appeal by Labtests, the three Court of Appeal judges ruled today that Dr Bierre's conflict of interest was more limited than Justice Asher assessed and did not undermine the tendering process.
They also ruled the obligation to consult the PHOs was not triggered in the circumstances.
Their ruling means that Labtests has been handed back the laboratory services contract.
The 2006 decision of the district health boards to take the contract away from long-time providers Diagnostic Medlab provoked bitter opposition by many in the Auckland health sector.
Diagnostic Medlab has been running Auckland's community laboratory testing services on an interim basis since last year's decision, a contract due to expire at the end of this year.
Labtests told the court it could be operational in Auckland in six to nine months.
