Care home briefing 186 – Care homes told to act now
Care home providers should not delay in reviewing their operating systems and processes and terms and conditions of contract. It is likely that enforcement action will be swift and determined and will inevitably have a detrimental effect on businesses.
Comprehensive advice and guidance has been issued by the Competition and Market Authority (CMA) in the latest round of its initiative to review the care sector and as part of its drive toward reform of practices heralded as unfair.
An investigation was opened by the CMA in June 2017 amid concerns that some of the contract terms and/or practices of a number of care operators may breach consumer law. The initial focus was on self-funding residents and the issues of large upfront fees and the fees charged after a resident’s death.
Following a market study and two consultations on draft consumer advice in January and May 2018, the CMA has written to care home providers to remind them of the obligations imposed upon them by consumer law and to advise them that they should review their practices.
The open letter which was published on the gov.uk website on 16 November 2018 recommends that the care home provider should:
(a) Immediately read the advice.
(b) Carefully consider whether changes need to be made to contracts and business practices to make sure the provider is complying with the law (which may involve reviewing whether all charges are fair).
(c) Consider a wider review of internal procedures to support compliance with the law.
[Examples provided suggest making sure that important information is clearly, accurately and prominently provided to prospective residents and kept up-to-date (including on websites, in written materials such as information packs and user guides, and in response to telephone enquiries), and that fair complaints-handling procedures are being followed].
(d) Make sure that all customer-facing staff understand these requirements and comply with them, since the care home provider will be responsible for their actions.
It is clearly stated that care home providers that don’t meet their obligations under consumer law risk facing enforcement action by the CMA or Trading Standards Services.
The detail of the advice and guidance is contained in ‘UK care home providers for older people – advice on consumer law’ and in short guides published on 16 November 2018 for care homes and residents and their families. It applies to all care homes including independent homes – regardless of whether they are run on a voluntary or charitable ‘not-for-profit’ basis or a ‘for-profit’ basis – and local authority operated homes.
Transparency, Quality and Fairness
- Upfront information – what information should be provided by providers to prospective residents and their representatives, and when and how it should do so. This includes giving an indication of the weekly fees charged to self-funders and highlighting any especially important or surprising terms and conditions that will apply (such as any requirement for residents to prove they can pay for their own care for a minimum period of time)
- Treating residents fairly – what should be done to ensure that contract terms and the way residents and their representatives are treated are fair under consumer law. Examples of unfair contract terms include requiring someone to act as a guarantor, without providing the prospective resident and guarantor with clear and transparent details, upfront, of the extent of their potential liability if the resident defaults.
- Quality of service – how to comply with obligations to perform services to residents with reasonable care and skill.
- Complaints handling – what should be done to ensure that complaints handling procedures are easy to find, easy to use and fair. Open reporting of complaints is encouraged as is cascading of learning from them to develop improvements.
Monitoring and Review
In addition to ongoing monitoring there will be a formal review of the level of compliance from November 2019. Action will be taken to hold care homes to account where appropriate. This could include civil action or a criminal prosecution.
CMA Chief Executive Andrea Coscelli said: ‘We’ll continue to monitor how well care homes are complying and won’t hesitate to take action again if we find evidence that providers have broken consumer law.’
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.