Last week, the NHF published its final version of its new Code of Governance and made some important changes from the previous draft that will impact on those housing associations looking to adopt it.
Whilst we continue to wait for the Competition and Market Authority’s (“CMA”) wider guidance addressing standards of behaviour towards residents expected of care home providers, the use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider. This update is particularly relevant for those operating in the residential care market and social care sector, but the general principles apply to all businesses providing repeat or on-going services to consumers.
We highlighted in June last year that care home providers were at risk of breaching consumer rights protections where they impose unreasonable fee increases and large up-front fees or deposits, particularly where the regular cost of care is charged monthly in advance. Since the CMA published the findings of its market study in November 2017, a number of providers have found their customer contracts subjected to enhanced scrutiny.
We have already seen that the Maria Mallaband Care group has dropped the use of a contract term which required residents to pay one month’s care fees following the death of a resident. Instead, fees will only be charged up to the date of death. In a similar vein, Sunrise Senior Living Ltd will no longer charge ‘several thousand pounds’ of payments in advance labelled as a “community fee”. An average sum of £3,000 was payable and in some instances before customers had secured a place in the care home. The CMA raised concerns that it was not clear to consumers how the fee would be used and that the fee was non-refundable once someone had lived in the home for more than 30 days. After discussions with the CMA, Sunrise Senior Living Ltd has agreed to repay the community fee to some 1,500 residents who were living in their homes for less than 2 years, resulting in more than £2 million compensation being paid to residents.
Although these changes have been described as voluntary by both organisations, we know from our own work with providers that the CMA is investigating and taking enforcement action against those it believes to be in breach of consumer rights legislation. What is clear from the CMA’s ‘constructive conversations’ to date, is that it is not enough for providers to assert that they never rely on or enforce the term in practice. The mere existence of an unfair term is enough for the CMA to take action.
Where social care providers intend to charge fees before services are provided, these should be a proportionate reflection of the costs incurred before the service begins or allow for refunds to reflect the true value of the service received by the consumer. If providers do intend to charge sums which go towards central costs, such as maintaining quality facilities and communal areas. This should be built into the overall fees, so that those residents who stay for a shorter period of time are not unfairly prejudiced by paying towards services which they may not benefit from.
If you have not done so already, it is important to review your customer terms and conditions to check that they are easy to read, do not contain hidden fees and do not risk confusing consumers as to what they’re paying for. We expect these issues to be at the heart of the CMA’s wider guidance when it is published and that they will social care customer contracts generally, not just residential care.
As the end of 2020 beckons, we take a look at what progress the Sterling market has made in its preparations for the end of the London Interbank Offered Rate (LIBOR) on 31 December 2021.
Finally, there is a glimmer of hope that perhaps the Covid-19 pandemic could be reaching its end.
For part 2 in this series of short podcasts, Chris Lloyd-Smith interviews senior associate Lisa Whitehouse on how she has been coping during these unprecedented times.
Delayed since Spring 2020 as the Government tackled the Covid-19 crisis, Tuesday 17 November saw the publication of the Social Housing White Paper, setting out the future regulation of the sector
In this ebriefing, we examine how the duty holder regime will apply to social housing providers with existing HRRBs in their housing stock.
Following Katherine's "heads up" last week, the Government has now confirmed that for claim periods post 1 December, employers will not be able to claim for employees who are serving their notice
For part 1 in this series of short podcasts, Chris Lloyd-Smith interviews solicitor Puja Desai on how she has been coping during these unprecedented times.
Over 100 trainees and future trainees from Birmingham joined the BTSS for a webinar to address concerns around training remotely and qualifying during a possible recession.
Anthony Collins Solicitors has supported Birmingham-based Complete Care Holdings in its acquisition of Amegreen Complex Homecare Ltd.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.