February 8, 2019

The CMA issues court proceedings against national care home provider

The CMA contacted Care UK in December last year in relation to the “compulsory upfront ‘administration’ fee” that that it had charged to over 1,600 of its residents (*figure taken from the gov.uk website). It asked Care UK to refund these fees or face legal action.

The CMA issues court proceedings

The CMA gave Care UK until the 10th January to respond.

Due to the action of the CMA, Care UK has stopped charging their administration fee, which is reported to be up to £3,000 per person.  However, Care UK has not agreed to refund these fees to their residents.

The CMA has issued court proceedings against Care UK to obtain a court order to secure refunds for those affected.

The CMA’s guidance

These legal proceedings are a further clear statement from the CMA that they are and will be taking action against care providers where the CMA believes that there is a breach of consumer law.

The CMA issued its final guidance on care contracts and consumer law obligations for care home providers in November last year. In this guidance the CMA stated that they would be carrying out a market review of compliance towards the end of this year (November 2019).  The CMA is taking this seriously and care home providers must review their contracts and business practices to avoid breaching consumer protection law.

How we can help you

We would encourage all providers to review their service user contracts, admissions and complaints documents to ensure that they are compliant with the CMA guidance.

If you would like advice and assistance on ensuring your admissions and complaints processes and service user contracts are compliant with consumer legislation, please get in touch. We have developed model documentation which complies with the CMA guidance whilst protecting your business.

If you are already facing compliance action by the CMA, demands for refunds from service users or relatives, or criticism by CQC, our healthcare dispute resolution team can help.  We are experts in contentious matters relating to care contracts.  We can help to limit the damage and preserve your reputation.

Whether you have had contact from the CMA or not, this is an issue that providers can no longer afford to ignore.


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