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Published 18 junio 2018
On 31 May 2018, the CMA announced that it is consulting on its advice to help care homes to meet their obligations under consumer law. At the same time, the CMA published its draft consumer law advice for care homes – this draft advice is subject to a period of consultation. Details of how to respond to the consultation can be found here:
Care home providers should take this opportunity to review and respond to the consultation to express any views on, and concerns they may have with, the draft advice and in particular whether any of the requirements will be difficult for care homes to put into practice. Other interested parties such a residents and their families, local authorities, charities and regulators will also be able to respond.
The consultation will conclude on 12 July 2018. The CMA plans to publish a final version of the advice, taking into account comments received, together with an anonymised summary of responses that fall within the scope of the consultation, in Autumn 2018.
The finalised consumer law position is therefore likely to be published later this year. Depending on the outcome of the consultation, this may include some changes to the draft advice document that has been published [by CMA?].
The draft advice sets out what the CMA considers care homes should do to comply with consumer law in order to protect residents, who are essentially people who can be in a very vulnerable situation. This includes:
The draft guidance is helpful in that it gives examples of the types of terms that are unfair and explains what approach would be considered fair and reasonable in accordance with consumer law.
Some of the main headline points which are covered in the draft guidance include:
The draft guidance also provides clarity regarding when changes are made to services, terms or fees. For example, the draft guidance recommends that a notification of price increase must be communicated to a resident with at least 28 days' notice. Care homes are also required to make clear both the circumstances in which changes to the fees can be made and also how these will be calculated.
A particular area requiring consideration by care home providers is the recommendation to review a resident's position at the care home after a set period of absence (for example, 8-10 weeks), to ascertain whether a resident is likely to be able to return to the home. In the interim, care home should be providing a discount of the fees payable, during the terms of absence, to reflect that a resident is no longer benefitting from certain aspects of the service.
On 31 May 2018, the CMA also published its final advice on charging fees after the death of a resident following a consultation which took place in February 2018 that a number of stakeholders in the sector responded to.
The CMA has the ability to enforce consumer law, and has explicitly stated in its advice:
“Now that the advice is finalised we expect all care homes to review as soon as possible and, where necessary, change their contract terms and practices or risk enforcement action.”
The advice includes a range of recommendations, including a proposal that charging a resident for 3 days following their death is reasonable:
“It is the CMA’s view that a payment period of up to three days (beginning from the day following the resident’s death) should normally strike the right balance between the legitimate needs of the care home and the resident. The CMA notes that many care homes offer resident rooms on a fully furnished basis, with residents usually bringing into the home items such as clothes, photographs, pictures, soft furnishings and maybe a few small items of furniture, all of which are relatively easy to remove. In these circumstances, a payment period of up to three days (beginning from the day following the resident’s death) should normally allow residents’ representatives sufficient time to remove possessions, without undue pressure. We would be unlikely to challenge this period.”
We understand that the 3 day recommendation will have a potential impact commercially across the sector, as well as the impact on a resident’s family who may consider that 3 days is not enough time to clear a room of its possessions when grieving. It should be noted however that this is guidance, rather than the law, and the guidance does state that care homes should seek independent legal advice regarding the implementation of the recommendations.
Our advice is that any departure from the positions set out in the guidance need to be carefully thought through and there needs to be a clear rationale for doing so. Departing from the guidance runs a greater risk of challenge to care homes, and a successful challenge could mean that the care home must repay fees that have been found to be unlawfully charged to residents, as well as potential negative impact on reputation that a publicised case on these sorts of issues can have in the market.
That risk can be mitigated to a degree by ensuring that the care home has a clear rationale as to why its terms and conditions might include a longer period of time than 3 days after death where it would charge fees, and ensuring that the terms are reasonable, and clearly expressed in a way that can be understood by residents.
In light of the above, we advise that our care home provider clients take action as soon as possible to review their terms and conditions and any other contractual documentation with residents and their families. Such reviews are recommended to ensure compliance with consumer law and the CMA guidance.
Whilst providers will of course need to review their contracts again in accordance with the finalised CMA guidance on compliance with consumer law, the draft advice document sets out some clear areas that should be complied with and therefore taking the draft documentation into account indicates good practice by care home providers and should be done as soon as possible. Care homes must be prepared to have clear and robust justification in place for any departure from the guidance and of course ensure that their terms and conditions with residents are articulated in a consumer friendly, jargon free manner which is not overly legalistic.
DAC Beachcroft can help its care home provider clients to ensure their compliance with consumer law and with the CMA guidance. We can also assist with any necessary mitigations that care homes may need to put in place should any departures from the CMA guidance are required.
+44 (0)191 404 4093
+44(0)191 404 4006
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