Cordlife clients launch legal action; first letter of demand sent

[The_King]

SINGAPORE: Legal proceedings by clients of the cord blood storage service provider Cordlife have commenced, with the first letter of demand received, the company said on Thursday (May 2).

A letter of demand, usually sent by lawyers, contains a list of demands. If the recipient - in this case, Cordlife - does not meet these demands, legal action, such as a lawsuit, may follow.

In November last year, it emerged that seven of its 22 storage tanks were exposed to sub-optimal temperatures, affecting the cord blood units of thousands of its clients. So far, investigations have revealed that over 7,000 cord blood units have been damaged.

In an announcement on the Singapore Exchange (SGX), Cordlife said the letter of demand was the first it had received from a client.

In response to CNA's queries, Cordlife said on Thursday evening that the letter alleges that the company was negligent and had breached its obligations under the service agreement, in relation to the storage of the client's cord blood unit.

 

07:45 Min

Cordlife's former Group CEO, Tan Poh Lan, has been arrested for potential breaches of the company's disclosure obligations. The private blood bank is under investigation for mishandling cord blood units last year.…see more

Cordlife said the sum the client is claiming falls within the jurisdiction of the district courts, which deal with claims between S$60,000 and S$250,000. 

After seeking legal advice, Cordlife said it does not agree with the client's contention that the company is precluded from relying on various clauses of the client’s contract. 

It intends to defend the claim and said the client's lawyers have not provided any supporting details so far. 

The letter was received earlier this week and is the only lawyer's letter of demand the company has received, it added.

 

Cordlife also said on Thursday, that in February, it had received notice of a claim lodged against it in the Small Claims Tribunal (SCT) by another client. 

The claim alleged that the damage to the client's child's cord blood unit was a result of Cordlife's storage of the unit. The claim amount was not stated. Matters dealt with by the Small Claims Tribunal have a claim limit of S$20,000 and lawyers are not allowed to represent parties.

In the SGX filing, the company said it was unable to determine the exact financial impact of the claim in the letter of the demand. 

"Should the Company be ultimately required to settle the claim in the Letter of Demand, the SCT Claim and/or claims made by multiple clients, this will likely result in a negative impact on the financial position of the Group for the financial year ending Dec 31, 2024," said Cordlife.

So far, seven directors or former directors have been arrested in connection Cordlife's alleged mishandling of the cord blood, including former Group CEO Tan Poh Lan. On Apr 17, Cordlife's board of directors lodged a police report over the "potential wrongdoings" of former employees. 

The cord blood bank has offered customers a refund of annual fees "since the start of temperature excursion" and promised to waive subsequent fees until their child turns 21. 

However, some customers told CNA in April that they were not satisfied with Cordlife's offer, citing that it lacked fairness. 

Some parents told CNA then that they would not accept Cordlife's refund offer or that they were weighing their options, including legal action. 

Customers who do accept the refund offer must agree to four clauses - one of them being accepting the offer as a "final settlement". 

Source: CNA/at(ac)