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Updated guidance from the Competition and Markets Authority for care homes to comply with their consumer law obligations
17th February, 2022 by Paula Dumbill
What is happening?
The Competition and Markets Authority (CMA) has updated its guidance on consumer law advice for UK care home providers. As care home providers, it is important for you to understand and comply with consumer law obligations, not only to avoid enforcement action taken against you but also to have your residents and their representatives in a position where they can make informed choices about their care and be confident that they are being treated fairly.
Although the majority of the guidance remains the same, there are some key updates in respect of upfront administration charges following the High Court decision in the case of CMA v Care UK Health and Social Holdings Ltd and another [2021] EWHC 2088. The CMA has also incorporated aspects of its consumer law advice on charging of fees after death.
This case concerned whether upfront administration charges of two weeks residential fees was unfair, misleading and exploitative. The Judge took into account the pressures on consumers choosing care homes who are making tough decisions involving people in a vulnerable position and unlikely to be familiar with the process of choosing a care home. The average consumer was a family member or a representative of prospective residents. Although the consumers were facing difficult circumstances, the Judge found that they were able to make decisions rationally and that the consumer contract in this case was clear on the upfront administration charge at the point of the resident or representative’s transactional decision.
A valid concern for care home providers may be whether upfront administration charges are justifiable. Thankfully for care homes, the updated CMA guidance maintains that they are, where care homes provide clear, accurate and unambiguous, prominent upfront information to residents and their representatives to confidently work out how much the fee will be. There should also be a clear justification for an upfront payment, such as advance payment of the resident’s regular residential fees.
What should care homes be doing to comply with consumer law obligations?
Key information about your care home should be provided in a clear, accurate and timely manner when a resident or their representative first makes contact with you, including on your website and in other materials that you issue when people first get in touch, for example a ‘key facts’ sheet or as an insert to a brochure. Take active steps to provide the important additional information for residents or their representatives to consider before an offer of a place is made or entering the care needs assessment stage.
Below are some other helpful tips to ensure compliance with your consumer law obligations:
- Treat residents and their representatives fairly ensuring that your terms and conditions of residency are simple, clear and easy to understand without putting the residents at an unfair disadvantage. Residents must be able to foresee and understand the circumstances in which changes to your terms and conditions may be made.
- Perform your services to residents with reasonable care and skill to avoid acting in breach of contract or being in a position where your residents or their representatives may be able to seek compensation from you.
- Ensure that you have an effective, written procedure in place for dealing with complaints that is easy to find, easy to use and fair.
Howes Percival Solicitors is currently offering a discounted fixed fee for reviewing your residents’ terms and conditions to ensure they comply with the latest CMA guidance and all other applicable laws. If you would like to discuss this offer, please contact Paula Dumbill at [javascript protected email address].
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.