Legal update


the average profitability figures for ‘large providers’ of care homes set out in the CMA’s market study report.


Self-funders versus publicly-funded residents Evidence was also put forward that Care UK incurred higher costs in admitting self-funded residents compared to publicly-funded residents. Publicly-funded residents typically had some form of care needs assessment carried out by the local authority or CCG (Clinical Commissioning Group).


On the other hand, self-paying residents were usually assessed primarily or exclusively by Care UK. Self-funded residents also had customised rooms, which was not normally the case for publicly- funded residents. Contracts for self-funded residents


were individually negotiated and required discussion on a case-by-case basis as opposed to publicly-funded residents, who were admitted under block contracts. Care UK also produced evidence that


a prospective customer would be given information about the administration fee when the manager considered that the customer was ‘seriously interested’ in proceeding. It was also noted that Care UK’s policy was for the administration fee to be discussed together with other key contractual terms during the first visit to a care home. Training had been given to managers to


provide a breakdown of the price, including the administration fee to a prospective customer on their first visit. Care home managers were provided with a guide to administration fee charges for self-paying customers and were trained to discuss the fee on the basis of that guide.


Care UK also had an internal ‘mystery


shopper’ exercise, as part of its ongoing monitoring of standards and one of the issues monitored during those exercises was whether staff members informed the mystery shopper of the administration fee. If the mystery shop identified that relevant information was not provided, follow-up training was put in place.


‘Misleading actions’ In summary, the law provides protection against unfair practices in relation to a contract between a trader and a consumer. Contractual terms that are not individually negotiated are regarded as unfair if, contrary to the requirement of good faith, the terms cause a ‘significant imbalance’ in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. Commercial practices are also prohibited if they are unfair because they amount to a misleading action or misleading omission or are aggressive. Misleading actions include commercial practices that contain false information and


are therefore untruthful, or if the overall presentation of the information deceives, or is likely to deceive the average consumer in relation to any of those matters. An aggressive commercial practice is


defined by the relevant regulations as a practice that significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned, through the use of harassment, coercion, or undue influence.


The first issue which the court considered


was whether the requirement to pay the administration fee was an unfair term. The second issue was whether Care UK’s practices amounted to unfair commercial practices prohibited by the regulations.


An ‘average consumer’


The court spent some time considering the definition of the ‘average consumer’. The court said that the starting point was to look at the consumers at whom Care UK’s fees and fee practices were directed, namely the consumers making decisions about the admission of a resident to a care home. Both parties in these proceedings agreed that the judge should have regard to the Ipsos MORI report commissioned by the CMA and that the key decision-makers when choosing a care home were most likely to be representatives of care home residents i.e., family members. The court was influenced by Care UK’s


evidence that those decision-makers were usually well-informed and took their responsibility seriously. The Ipsos MORI report noted that self-funders tended to have a clear understanding of the financial details of the resident’s care.


January 2022 www.thecarehomeenvironment.com 21


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52