CSL pays $67.9 million to US hospitals
In Arthur Miller’s classic play about the Salem witch trials in early America, protagonist John Proctor willingly walks to the gallows rather than sign his name to a crime he knew he didn’t commit that would implicate others and ruin his good name forever.
Miller was of course using the famous Massachusetts hysteria over imagined witches as a novel literary device to comment on a more modern event of the McCarthyist trials of the 1950s. Either way the lessons were still the same.
CSL has chosen a different path to that of John Proctor. And although it isn’t facing a similar fate at the end of the hangman’s noose, it has decided to hand over $US64 million to a handful of hospitals who instead of witches saw a grand conspiracy by CSL to defraud customers through price fixing.
After four years of fighting, CSL has given up any chance to clear its name and prove its innocence in the full public gaze of the US court system.
But John Proctor never had shareholders, customers and a multi-billion dollar global plasma business to run, and this looks to have finally won over the CSL management and its board to pay off the plaintiffs and make the case go away – no matter how distasteful it might be.
The distraction was very real. CSL boss Paul Perreault recently spent nearly eight hours being deposed by plaintiff counsel, and that’s a day’s work he could have spent working for CSL shareholders.
Former CSL boss Brian McNamee, who consistently denied any wrong doing and claimed the court case was completely frivolous, also spent time being deposed by lawyers just as he was about to hand over the reins to Perreault. Again wasted time that could have been better spent walking through the key challenges and risks of the business to his replacement.
Then there were the ongoing costs.
Although moderate at first, around $2 million in the first year back in 2009 when the lawsuit began to gather form, it has now averaged $5 million a year and the running bill for CSL is $20 million.
Internally, CSL lawyers believed a trial would have cost another $20 million. This is pretty small against CSL’s annual revenue of more than $5 billion.
CSL has always seen lawsuits as a cost of doing business in the US, where court cases sometimes resemble vaudeville and are great fodder for the evening news or afternoon chat shows.
It seems that CSL didn’t like its chances given the price fixing case would have gone to a jury. Imagine it, simple folk presiding over a case like price fixing and cartel behaviour.
But if juries can sit on cases as complex as Enron and the wash-out of the GFC, why not a case about cartels? We will now never know.
The plaintiffs lined up against CSL never found a ‘smoking gun’ that would have proved their case.
But sometimes a little bit of hysteria can go a long way, just look at the graves in Salem.
The original release of this article first appeared on the website of Hangzhou Night Net.