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Equine Sale Repositories Under Scrutiny
Thursday, February 4, 2016 RSS Feeds

Information and analysis of endoscopic exams and radiographs placed within repositories at major sales were designed to assist with the auction process, but they continue to pose issues for veterinarians, buyers, and sellers.

That was the consensus from a panel of industry professionals during the Feb. 2 Educational Symposium put on by the Consignors and Commercial Breeders Association at the Keeneland sales pavilion in Lexington.

According to the panelists—veterinarian Dr. Jeffrey Berk and attorneys Mike Casey, Mike Meuser, and Bill Hoskins—the biggest issues surround the subjective nature of the scopes and the radiograph analysis, with no objective measure or standardization on what constitutes a significant enough finding that it might impact a horse's future racing potential.

Noting the wide disparity that can exist in interpreting x-rays in the repository, Berk cited a study conducted by 10 veterinarians in which they reviewed 392 radiographs and compared those they deemed had significant findings with the reports from consignors.

The "significant" findings of the consignors matched only 49% of those found by the vets.

"That's a problem. It's a systemic problem," he concluded.

Berk, who has also bred, raced, and sold Thoroughbreds, said there sometimes is a disparity about what is acceptable to one client and not to another based on what is seen on the scopes and radiographs.

"It is not at all unusual for a horse that is suitable for one client is not suitable for another," Berk said of the situation in which he sometimes is examining the same horse for different clients. "The first person may be buying to race and they have a higher risk tolerance, and there may be a few items that are risky but they are fine with that horse. But for the other client, who may be buying to re-sell, those risky issues may affect their ability to resell the horse. I want my clients to buy horses if they want, so I'm not trying to find things wrong with these horses.

"I don't ever tell a client not to buy a horse. It depends on their element of risk. That whole thing is taken out of the equation when they just get a report. There is a certain amount of subjectivity when analyzing these reports."

Berk said one goal of standardized scopes and radiographic analysis would be to minimize the number of times a sales horse is subjected to the exams, a result of buyers wanting the information from their own vets rather than relying upon someone else's work.

If a consignor believed a yearling had been vetted too many times at one sale, if offered to review another vet's work he would accept it rather than subject the horse to more scoping or x-raying, provided he had confidence in the vet who performed the exams.

"I want to use these videos if they are trustworthy," Berk said.

The veterinarian noted that for nearly all yearlings sold at public auction in France there are videos of throat examinations that go along with the radiographs. "The best videos of throats in the world are done in France," Berk said.

Attorney Meuser agreed that one major issue is the lack of uniformity on what issues would impact a horse's ability to race.

'There is not a lot of scientific evidence that detected lesions in joints would hinder a horse from racing," Meuser said of one example.

Meuser said the addition of the reports to the repository that previously only held the radiographs added a new realm of issues.

"The whole problem with the report (in the repository) is that it is an opinion about what is on those films. If all that was in the repository is what was in there originally, the Conditions of Sale take care of it," Meuser said. "But the body of law that goes outside the Conditions of Sale is if there is something in that report that is materially misleading or doesn't agree with the films, that is the problem."

Hoskins, whose clients include some of the most prominent Central Kentucky breeding farms, said the Conditions of Sale would relieve most parties of liability on matters related to the repository in cases where buyers have used the system.

Meuser said Kentucky law does provide that sales companies have a legal responsibility for the information supplied to buyers.

Meuser and Casey both said litigation comes into play when a buyer has not done their due diligence by having a qualified professional review the repository materials on their behalf and later seek to return a horse they claim has a defect.

They cited examples of buyers who have attempted to return a horse sometimes six months after a sale because of an alleged fault, although they did not review the repository information.

Instead of using the arbitration process set up with the sales companies, they attempt to rescind the purchase or negotiate a reduced price, Meuser and Casey said.

"More people are taking the horse back or reducing the price rather than going to arbitration," Meuser noted.

At the end of the day, Hoskins said it comes down to a bottom-line decision.

"This is all about balancing the needs of the marketplace versus the need of 'no risk' and it is a business judgment you all have to make," he said.

Courtesy of the Bloodhorse

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The CBA works democratically on behalf of every consignor and commercial breeder, large and small, to provide representation and a constructive, unified voice related to sales issues, policies, and procedures. The Association’s initiatives are designed to encourage a fair and expanding market place for all who breed, buy, or sell thoroughbreds.