KEY POINTS:
The company at the centre of a court battle over a $560 million medical testing contract says it can set up a community laboratory service from scratch before on July 1.
Labtests Auckland's lawyer, Paul Davison, QC, yesterday told Justice Raynor Asher in the High Court at Auckland that unsuccessful bidder Diagnostic Medlab was responsible for peddling misinformation that suggested Labtests' contract with the three Auckland-area district health boards was unfair and unworkable.
Medlab, which had held the contract, was concerned only at the prospect of losing its monopoly business, which had previously "swallowed up" competitors, Mr Davison said.
It had "put itself into what it thought was an unassailable position, where no other party had any real prospect of coming in and being the sole [laboratory services] provider".
Labtests was setting up laboratory testing facilities in Auckland, and Medlab claims that it would not be ready by July 1 were unfounded.
Labtests' Australian parent company, Healthscope, was "a large and well-resourced company", that operated 48 hospitals in Australia.
Healthscope also owned Gribble Laboratories, which ran 42 Australian labs.
"These are experienced operators who can extrapolate on their previous experience ... and achieve it within time."
Medlab had played a part in generating "alarmist reaction" to Labtests winning the contract, Mr Davison said.
And he rejected suggestions Labtests would make drastic cuts in the testing service.
Though it intended to reduce the number of sample collection sites, it was "simplistic" to suggest that would mean a drop in service quality.
The 47 planned Labtests collection sites - down from Medlab's 80 - would be "strategically located for accessibility" and would have upwards of 194 "chairs" for collections, he said.
The way Medlab had run its business had led to a proliferation of collection centres as Medlab took over competitors.
Rather than a collection centre programme that had "grown like Topsy", Labtests' centres would be planned on population need, location and movement.
Mr Davison also rejected allegations GPs would be expected to do more sample gathering for Labtests.
"There has never been a requirement in the Labtests contract that doctors were going to be required to change anything that they are currently doing, and start taking samples because they are required to do so.
"It was nothing more than a goal to say that within two years Labtests was hoping to have moved from the current 30 per cent of doctor samples to 50 per cent."
Labtests chief executive - and former Auckland District Health Board member - Dr Tony Bierre has been accused of having a conflict of interest in his involvement in Labtests winning the contract, but Mr Davison said Dr Bierre denied any wrongdoing.
"There was never an occasion when he took and misused confidential information."
Dr Bierre is a former Medlab employee, who was involved in a legal dispute with the company in early 2003 that ended with him the subject of a restraint of trade agreement.
The High Court hearing is expected to end today.
The Case:
* Medlab is seeking a judicial review of last July's decision to award Australian-backed Labtests Auckland the contract to provide laboratory testing services in the Auckland region.
* When Labtests takes up the eight-year, $560 million contract - due to begin on July 1 - it will halve the number of sample collection points for the region's 1.4 million people and reduce the number of testing staff.
* Medlab says the boards changed their expectations of a medical testing provider without telling it.
* It also alleges then-Auckland District Health Board member Dr Tony Bierre used his inside knowledge of changing board tender requirements to secure the contract for Labtests.
