Stephen Daker, a doctor at Lowlands University dreams that he is on trial on campus, prosecuted by his colleague Rose Marie and judged by the Vice Chancellor, Ernest Hemmingway. He calls his lover Lyn to his defence, but she runs away. As two nuns sharpen an axe, he awakes.

Hemmingway prepares an instruction that all staff hired before 1971 must undergo medical examinations to determine their fitness to continue work. The medical centre receive a 'hit list' of staff for whom medicals are a priority: the list includes the practice's own head, Jock McCannon, and Lilian Hubbard, warden of the women-only Fairlie Hall.

As the government threatens financial cuts, Hemmingway is seeking private finance for the university. He shows a group from the Sakamoto Corporation around, suggesting that Fairlie Hall may provide suitable accommodation for their staff in a new science park development.

Rose Marie and another doctor, Bob Buzzard, consider submitting a medical report on Jock based on what they know to be his true state of health. Stephen examines Lilian, and while he finds that she suffers from aphasia - an occasional inability to identify the correct words for things - he is moved by her plea for more time before retirement to complete her academic work.

At a practice meeting, Stephen announces that Lilian has passed her medical, getting angry with Bob when he suggests that Lilian is a hindrance to the development of Lowlands' relationship with Sakamoto. Jock conducts his own medical. Hubbard and her students stage a demonstration outside Fairlie Hall to prevent Sakamoto executives entering.

Bob submits a failed medical result for Jock to Hemmingway. Hemmingway calls Stephen in, and tells him that although Lilian passed her medical, he wants Jock and Stephen to declare her mentally ill for conducting the protest. Stephen talks to Lyn, who is considering leaving Lowlands to return to the 'real world'; Stephen says that he now considers Lowlands to be the real world and that he is joining the opposition to the Vice Chancellor.

Jock exposes Bob's fake medical result, and presents Hemmingway with the results of the self-administered medical, which is unorthodox but not prohibited. Jock and Stephen visit Lilian, who is determined to continue the protest and gives her last lecture of term from a window in Fairlie Hall. The Sakamoto Corporation executives tell Hemmingway that their deal is now off. Lyn joins Stephen and Jock listening to Lilian's lecture.