As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
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.
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
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