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Insights

CMA updates care homes guidance following High Court decision

Posted on 15th December 2021 in Later Life Planning, Company & Commercial

Posted by

James Orpin

Partner and Solicitor
CMA updates care homes guidance following High Court decision

Following the High Court’s decision in Competition and Markets Authority v Care UK Health & Social Holdings Ltd and another [2021] EWHC 2088 (Ch) (see our Insight here), the Competition and Markets Authority has updated its sector-specific guidance for care homes.

The substance of the guidance hasn’t changed a great deal - its foreword emphasises: “Given the narrow subject-matter of the Care UK case, the vast majority of the original Advice remains as originally stated”. However, reference to the case has been included at various points in the guidance, including the CMA’s view on how “the High Court adopted a narrower, albeit non-binding, interpretation as to the steps which amounted to a transactional decision in the particular circumstances of that case”.

Other key parts of the guidance include

  • Paragraph 1.25 (examples of terms that may be unfair in certain circumstances): “[requiring] other upfront payments, unless there is a clear justification for it, such as where it is an advance payment of the resident’s regular residential fees” (emphasis added).
  • Paragraph 3.12: the CMA has soften its advice on providing information about fees and charges on first contact. It “considers that it is particularly important”, but does not explicitly state that not doing so will fall foul of consumer legislation.
  • Paragraph 4.17: “Examples of the types of payments which we consider are likely to infringe consumer law include charges for: … (b) Activities related to admissions which do not involve the provision of material and distinct services for the resident.
  • Paragraph 4.19: “You are likely to mislead prospective residents and their representatives and infringe consumer law where, at any time, you represent or give the impression that a payment: … (b) Funds specific services provided to the resident as part of the admissions or moving in process, when no specific service is in fact provided at all in return for the payment; or where you describe the fee as covering the costs of the individual’s admission, such as actual disbursements, when in fact the fee is calculated by reference to estimated costs that apply more generally across all residents or homes.

The full guidance can be read here.

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