Surgeons blocked rivals, judge rules

By REBECCA WALSH

A High Court judge has found that five eye surgeons and the society that represents them worked to block Australian doctors performing routine eye procedures in Southland.

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

It is the first time a case has been won against individual doctors under competition law.

Two of the doctors and the Ophthalmological Society of New Zealand could face financial penalties.

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

In 1996 Southern Health, a crown health enterprise, was given extra money to perform 225 additional cataract operations.

Southern Health tried to get two Australian ophthalmologists to come to Invercargill to do the work.

But Dr Michael Silva, a Sydney-based specialist, did not complete the operations he was contracted for after New Zealand surgeons failed to clear him to do the work.

A second specialist, Dr Patrick Versace, was apparently told it was not in his career interests to operate in Invercargill.

The commission alleged the society and the New Zealand eye surgeons involved colluded to ensure the Australians did not perform the surgery. It said their actions contravened section 27 of the Commerce Act, which prohibited contracts, arrangements or understandings that substantially lessen competition.

In a reserved decision Justice Warwick Gendall found the New Zealand doctors became party to an arrangement designed to "prevent, obstruct or hinder entry into the routine cataract surgery market".

"In general terms, what occurred was concerted action by members of a profession, and its professional body, to assist a colleague avoid legitimate competition to protect what he, and his profession, regarded as his exclusive domain," Justice Gendall said.

The doctors were Philip Boulton of Palmerston North; Ken Tarr of Canterbury, both former society office holders; Brett Rogers, who at the time was Invercargill's only eye surgeon; Mark Elder of Canterbury Health; and Professor Richard Clemett of Canterbury Health.

"It was Dr Rogers who was the mover of the events that led to the prohibited arrangement being formulated," Justice Gendall said. "It was competition in the market in which he alone held command that he sought to hinder."

Although he found each doctor liable Justice Gendall did not consider fines - to be determined at a future hearing - were required against Drs Boulton and Tarr and Professor Clemett.

The maximum penalties are $5 million against an organisation and up to $500,000 against an individual.

Yesterday, in a statement the Royal Australian and New Zealand College of Ophthalmologists said it had not yet fully assessed the decision. " ... The primary role of the college and the society, is to establish and maintain the highest medical standards for patient eye care. Cases such as this may be seen as a conflict between commercial and medical ideals," the statement said.

Commerce Commission general counsel Peter Taylor said it was the first time a case had been successfully taken against individuals in the medical profession under competition law.

The story so far

* In 1996 Southland Health received extra Government money for 225 cataract operations, mainly for elderly people.

* Southland Health tried to get two Australian specialists to do the surgery.

* In 1998 the Commerce Commission alleges the Ophthalmological Society of NZ and a group of eye surgeons acted in an anti-competitive way and colluded to ensure the Australian surgeons did not do the work.

* Justice Gendall finds in favour of the commission.