The Court of Appeal has overturned a landmark ruling governing who should have the multimillion-dollar contract to provide all community laboratory testing in Auckland.
In March 2007, the High Court quashed a $560 million eight-year contract awarded to Lab Tests by the Auckland region's three district health boards.
Justice Asher said there was a serious conflict of interest on the part of the then head of Lab Tests, Tony Bierre, who was also a member of the Auckland DHB.
He also faulted the district health boards for failing to consult family doctors.
But in a decision issued on Thursday, the Court of Appeal says Justice Asher took too broad a view and Dr Bierre held no confidential "inside information".
The court said there was no need for the DHBs to consult family doctors.
It ruled Lab Tests should take its contract up as soon as it can after the interim deal with Diagnostic Medlab Limited ends in December this year.
The court awarded costs of $48,000 each to Lab Tests and the DHBs as a group.
The Auckland District Health Board said it welcomed the Court of Appeal decision.
However, Diagnostic Medlab Limited says it will fight the decision and now has 20 working days to ask the Supreme Court to hear its appeal.