Cordlife customers push for legal action

Seeking compensation for their non-viable cord blood, some Cordlife Group : P8A +3.28% customers have banded together to sue the beleaguered cord-blood bank, with at least two legal actions under way.

The Business Times understands that these groups are mulling over class action-type suits and are seeking legal opinion from various law firms.

One group currently has around 80 customers, and will be speaking to a law firm on Wednesday (Apr 24) evening, according to Shanta Sundarason, a parent who had banked her youngest child’s cord blood with Cordlife since 2003.

She told BT that she had started gathering fellow customers through Facebook and Telegram, after calling up the cord-blood bank a few weeks ago and finding out that her child’s cord blood was likely affected.

“It was very important for me to store my daughter’s cord blood, as my child is of four (different races)… and finding a match if something happens is more difficult for families where there is a big mixture,” she said.

According to the public Singapore Cord Blood Bank, patients who need the stem cells found in cord blood are more likely to find a match from someone of the same ethnic background.

Sundarason, who relocated to Canada and runs a non-profit organisation there, added that her husband is a cancer survivor.

“The fact that I have been told that my daughter’s cord blood has been affected is extremely disappointing,” she said.

To recap, seven of Cordlife’s 22 storage tanks were 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”.

BT previously reported that the lapses in tank temperature warrant compensation, but a class action-type suit would be difficult to mount in Singapore due to it being logistically complex to organise.

Contract extensions

Parents are not the only affected customers. While parents have the initial ownership of the cord blood, children have the option to continue storing the cord blood with Cordlife once they are 21 years old.

One such customer extended the storage of her cord blood with Cordlife after the 20-year contract her parents had signed ended.

The customer, who declined to be named, said the cord blood had been stored with Cordlife since 2002, and that she was given the option to renew the contract, or donate or dispose of the cord blood.

She decided to pay an additional S$2,700 to continue keeping the blood on the advice of medical professionals.

After she was informed that her cord blood was likely to have been damaged as it was in a tank with non-viable samples, the company offered to refund the S$2,700, but she does not intend to take up the refund.

She said Cordlife had enabled her to renew her storage contract in 2022, despite having several tank temperature breaches since 2020.

“If this case had not surfaced, I would be paying for a spoiled cord,” she said. “They’re scamming me to pay.”

Sundarason added that the group has at least two customers who now have ownership of their own cord blood, which means their cord blood has been stored at Cordlife for more than 20 years.

Beyond the refund debate

Shaun Leong, equity partner at law firm Withers KhattarWong, explained that what is at stake goes beyond the question of fee refunds.

He pointed out that Cordlife refers to the stem cells in cord blood as “life-saving” and from Cordlife’s advertising, the loss of stem cells could have a “serious impact on a child’s health outcome” if treatment from the stem cells becomes necessary.

In addition, more than 7,000 cord-blood units have been found damaged or non-viable, which could indicate that a high number of families have been affected, he said.

Despite the perceived value of stem cells in cord blood, it is not commonly used. MOH in November said that the utilisation rate of privately banked cord blood is low, with Cordlife customers retrieving only seven cord-blood units since the company started services in 2001.

Leong also highlighted that besides cord blood, there is a viable alternative in adult stem cells. However, it carries a risk of being impaired by toxins or affected by changes in DNA, among other challenges.

“The opportunities that cord stem cells can bring to further human health, well-being and mortality are still being explored,” he said.

“The future of cord blood nevertheless seems bright, as the substantial funds raised by Cordlife indicate significant public confidence in the long-term viability of developing technologies relating to cord blood.”

Leong has worked on previous class action-type suits – he is the leading partner acting for over 100 Singapore-based investors in the case involving the write-down of Additional Tier-1 bonds issued by Credit Suisse.

Next steps

Sundarason said that the group intends to hold a town hall meeting for all customers after discussing next steps with counsel on Wednesday, including about litigation funding.

BT understands that Withers will be involved in this town hall meeting, slated for May 3.

Lawyers on the team include Leong, joint managing partner Shashi Nathan and Asia regional divisional leader of dispute resolution Chenthil Kumarasingam.

Participants in the town hall meeting will be screened to ensure that only Cordlife customers can attend, noted the group.

Said Leong: “Ideally, families would want to have recourse that would be internationally enforceable.”

Besides Singapore, Cordlife has operations in markets such as Hong Kong, Macau, Indonesia, India and the Philippines. It also recently set up a Vietnam subsidiary.

BT understands that another group of customers has also been seeking legal opinion for all cord blood stored with Cordlife, regardless of whether or not the cord blood was confirmed to have been affected.

Customers in this group were previously invited for a town hall meeting on Jan 24 to discuss their options. Sign-ups for this group are currently closed.

In response to queries from BT, a spokesperson for Cordlife said the company is aware that a number of affected clients are looking into legal options related to the issue.

“We respect that clients may want to consider all possible options in order to decide on a resolution that best suits them, and we understand that such endeavours would include exploring whether they have any legal rights for recourse,” the spokesperson said.

“Cordlife has engaged a team of external legal advisers that have been advising the company on various issues, including its responsibilities and obligations with respect to all of the company’s stakeholders.”

Shares of Cordlife closed 3.3 per cent or S$0.004 higher at S$0.126 on Wednesday.

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

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