CervicalCheck scandal lab revenue increased 40% after issues became public

The revenues of one of the laboratory companies at the center of the CervicalCheck program scandal rose 40% to € 12.95 million in the 12 months after the scandal was exposed.

Currently, Dublin-based Medlab Pathology Ltd is being sued in the High Court by a number of women over alleged breaches of the HSE’s CervicalCheck program.

Lawyer in the landmark Vicky Phelan case Cian O’Carroll said on Monday that “a substantial number” of cases taken by his firm regarding the CervicalCheck scandal involve Medlab Pathology where they appear as co-accused with the HSE .

Accounts confirm that Medlab Pathology Ltd is no longer trading.

Development and investment

The High Court’s € 2.5 million settlement with Clinical Pathology Laboratories, a partner laboratory of MedLab regarding Vicky Phelan took place in April 2018 and Medlab Pathology Ltd’s revenue increased by 40% from 9. 23 million euros to 12.9 million euros over the 12 months at the end. of June 2019.

The directors stated: “The year from July 1, 2018 to June 30, 2019 represented continued development and investment in this market. Directors were satisfied with the progress made in this regard given the prevailing economic climate in Ireland.

Referring to the ongoing legal claims involving the company in the new accounts, a note states that “the company has insurance to cover these types of claims”.

The memo says the company “should only be exposed to amounts deductible under the relevant policies and certain legal fees, unless policy limits are exceeded or a claim is denied.”

The note adds that € 594,043 of relevant costs have been incurred since the balance sheet in relation to claims arising after the closing date that were settled or rejected before the date of signing of these financial statements.

Transfer of pathology work

Mr O’Carroll said Monday that Medlab Pathology “has generally been quite strong in defending ‘the claims against him’ but we have yet to fail in any action.”

Rising costs in the 12 months leading up to the end of June 2019 resulted in Medlab Pathology Ltd’s pre-tax profit being cut almost in half to € 59,305.

Accounts show that Medlab transferred its pathology work to a connected company, Sandyford Clinical Diagnostics Ltd, on February 14 of this year. It was a day before parent company Sonic Healthcare sold Sandyford Clinical Diagnostics Ltd to a third party.

However, the sale will not impact legal actions against Medlab as Sonic Healthcare has retained all of Medlab’s contingent liabilities.

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The directors confirm that on February 8, Medlab Pathology received a capital contribution of € 7.4 million from its parent company.

Medlab Pathology personnel costs in the 12 months to end of June 2019 increased by 16.5% to 3.75 million euros, with headcount decreasing by one to 65,

The 2019 result takes into account non-cash depreciation charges of € 259,911.

The HSE previously said it paid MedLab € 5.84 million to process cervical check results for 2017 and 2016.

About Hector Hedgepeth

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