Consumer laws in the care home sector – update
Care homes are undoubtedly facing the toughest of times at the moment. A review of residency agreements or terms and conditions is not likely to be high on the agenda. However, a recent case brought by the Competition and Markets Authority (CMA) shows that the current difficult circumstances will not excuse poor or improper practices on the part of care homes, in their dealings with residents under consumer laws.
I wrote last year about the publication by the CMA of its guidance document “Care homes: consumer law advice for providers” which is intended to assist care homes in meeting their requirements under consumer laws (and which can be found here.
At the time of publication there was some suggestion that the CMA would permit care homes some time to adjust their practices in light of the new guidance. A recent case indicates that any ‘adjustment’ period is coming to an end. The CMA has issued court proceedings against a major care home operator, Barchester Healthcare. Barchester run over 200 care homes and 7 registered hospitals across the country, and so this is a significant step by the CMA.
To recap the general tone of the guidance, care homes owe a special duty of care to residents and prospective residents when it comes to applying consumer laws. Care home residents are a particularly vulnerable class of consumer, owing to their reliance on family members (in many cases) and inability to ‘shop around’ in the normal sense. Transparency and fairness are key principles that care homes must adopt when dealing with residents – providing full details of the legal rights and obligations of both parties, in plain language, is vital.
Several allegations have been made regarding Barchester’s practices towards its residents, the most notable being:
- The requirement for residents to pay a substantial non-refundable upfront administration fee, for which residents received no discernible benefit. The CMA’s position is that Barchester misled prospective residents in relation to this charge, and informed them of it far too late in the application process. These practices are highlighted as being unfair in the CMA’s guidance document.
- The imposing of excessive charges in the period following a resident’s death. The CMA provides clear guidance on how long a care home can continue to charge for a room following the death of a resident. Barchester allegedly imposed charges that went beyond the recommended amount.
To the extent not done so already, care home operators are advised to ensure that they are familiar with the CMA’s guidance, and if necessary to conduct a review of their current policies, procedures and contractual documents, to ensure compliance with consumer laws. Whilst the guidance is fairly wide-ranging, it uses plain and clear language and is easy to follow.
Falling foul of consumer laws could result in the contract being unenforceable, and in more serious cases court action (as with the Barchester case).
If you would like further advice on the best-practice guidance issued by the CMA, or if your care contract is due for a review, please contact Tom Rook at firstname.lastname@example.org or call Tom on 07971 118042.