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The Competition and Markets Authority (CMA) continues to take a close interest in the care home sector.  Its predecessor (the OFT) made recommendations in 2005 to address the issues it had uncovered.  After 12 years, the CMA has found that there remain substantial concerns including the extent to which care homes are complying with consumer law.

The Consumer Rights Act 2015 was not in force at the time of the OFT report however there has been sufficient passage of time for care homes to take action in the light of the Act.  The problem seems to be somewhat embedded and therefore difficult to rectify.  The CMA is reported to be taking direct action against care home providers who are failing to observe the Act.  If they haven’t already done so, care homes need to seek professional help and provide training to their staff.  Further information about the Act can be found here: https://www.stephens-scown.co.uk/corporate-commercial/consumer-rights-act-redressing-the-balance/

What does the Competition and Markets Authority report say?

The CMA report (published at the end of 2017) highlights some structural challenges in the industry.  These will need to be dealt with at higher levels.  For those closer to the ground, there are some easy wins to be gained now.  Care home owners can review the way in which they engage with residents and their families:

  1. against a complex and stressful backdrop, set out options in the provision of care for residents and their families, initially and over the period of the stay
  2. remove any inherent barriers to well-informed choices
  3. give the residents and their families sufficient early access to the terms of the contract to help them in the decision making process
  4. make sure your contracts are in plain English
  5. review very carefully any large upfront fees and deposits
  6. display indicative prices on your website
  7. give proper notice of any price changes and options if the change is not agreed
  8. ensure the termination provisions in your contracts are fair and practicable
  9. consider the fairness of charging fees after a resident’s death (the CMA is already bringing action again care homes continuing to charge the estates of deceased self-funding residents for up to four weeks after death)
  10. set out clearly the complaints and redress systems (and have a permissive culture to allow complaints)

The CMA’s acting chief executive, Andrea Coscelli has said ‘We will be taking steps to assist care homes in understanding their obligations, but we are also taking enforcement action now on some issues where we believe the law is being broken.  It is essential that residents and their families can make informed choices, understand how these services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have concerns.’

We expect to see more guidance from the CMA in 2018, which will also be followed closely by Citizens Advice Bureaux, Age Concern and other regulators.

Gavin Poole is a partner in the corporate team at Stephens Scown. If you have any queries then please do contact Gavin on 01872 265100, or by email info@stephens-scown.co.uk.