Possible class action lawsuit against Cordlife by customers could take at least 2 years

A representative action suit against beleaguered cord-blood bank Cordlife could take at least two years to conclude, should affected Cordlife customers decide to go through with such a lawsuit, said partners at law firm Withers KhattarWong.

However, the law firm stressed that the case is at an early fact-gathering and consolidation stage, and that it is not recommending that customers take up such a representative action – also known as a class action-type suit – at this juncture.

This comes after Withers KhattarWong held a town hall meeting for affected Cordlife customers on Friday (May 3). The discussion covered the possible legal actions they could take, as well as the stages that are likely to take place in a class-action lawsuit.

Around 430 parents and other customers attended the two-hour-long meeting in-person or over Zoom. The law firm is currently onboarding customers who wish to seek recourse against Cordlife.

They include families whose cord-blood units are no longer viable or found to be at high risk, those who were informed that their cord-blood units are at low risk, and those whose cord-blood units are still undergoing testing.

The Business Times understands the quoted onboarding fee is S$300 per family, regardless of whether the family has cord-blood units for one affected child or more.

To recap, seven of Cordlife’s 22 storage tanks have been exposed to temperatures above acceptable limits at different periods since November 2020. The lapses were uncovered by the Ministry of Health (MOH), which suspended the cord-blood bank from collecting or processing new cord blood for six months.

Thus far, MOH’s expert panel has found that around 7,500 cord-blood units stored by Cordlife in two tanks and a dry shipper have been damaged or deemed at “high risk of being adversely affected by the temperature excursions”.

Shaun Leong, equity partner at Withers KhattarWong and one of the partners who helmed the town hall, said the meeting “gathered a lot of momentum” from attendees and sign-ups have been robust. But he did not provide exact figures as the case is still at an early stage.

Once the consolidation and fact-finding stage has concluded, the next stage will likely involve engaging and negotiating with Cordlife, as well as engaging with MOH, based on a presentation deck by Withers KhattarWong.

It also indicated that if the legal action progresses beyond this stage, customers should be prepared for arbitration, as well as hearings in court and officially with MOH.

Urgency from parents

Shanta Sundarason, an affected customer who helped to organise the town hall, said a concern brought up by parents was related to the cord blood from children who have turned or will soon turn 21.

This is because the contract from Cordlife, signed by parents, expires when the child turns 21. The child, now an adult, can then take up a new contract to retain ownership of the cord blood, or allow it to be disposed of or donated to the national cord-blood bank.

Parents fear that cord-blood units would be unilaterally disposed of by Cordlife if they are deemed non-viable once the 21-year period is up.

In addition, cord blood that is at high risk of being adversely affected by the temperature excursions may also not be accepted by other cord-blood banks, even if parents wish to transfer their cord-blood units.

Leong said the firm will “allocate its resources accordingly” to the group of parents that conveyed their urgency, without elaborating on specific actions.

Other concerns raised by customers include uncertainty over whether their children’s cord blood is truly viable or not, as well as concern about what protection measures are currently in place for the cord-blood units stored at Cordlife.

Leong noted that Cordlife customers who approached the firm sought various outcomes.

While some are seeking litigation options, others want more information, or simply wish to make sense of the terms Cordlife used in their correspondence. For example, parents questioned the meaning of the term “non-viable”, which Cordlife used to describe some of the cord-blood units that have been affected.

“Many parents would prefer to gather the facts before making an informed decision (on whether to pursue legal action),” Leong said.

Some parents who accepted Cordlife’s refund offer but still seek compensation from the company have also approached the law firm.

Case with many complexities

Due to the different circumstances faced by each affected family, partners at Withers KhattarWong noted the case had many complexities, and it was key for the law firm to identify the different sets of circumstances properly.

“(People signed up) essentially to protect their kids, and it’s important to try to address that in the best way possible, which will mean different things for different people,” said Chenthil Kumarasingam, Withers KhattarWong’s Asia regional division leader for dispute resolution.

As for the possibility of filing a representative action, Kumarasingam noted that there has to be “some common ground” between the representatives and the groups they are representing. In Cordlife’s case, this refers to the terms in the contracts that each customer has signed.

“Part of the complexity here is that some of Cordlife’s terms have changed quite dramatically over the years,” he said.

For example, there were changes in the limitation of liability between earlier and later contracts, and marketing materials have also changed, he noted.

Source: Business Times © SPH Media Limited. Permission required for reproduction.

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