The High Court recently handed down judgement in the claim brought by the Competition & Markets Authority (“CMA”) against Care UK. The claim arose as a result of Care UK’s practice of charging an administration fee when admitting self-funded residents into care homes in addition to the usual care and accommodation fees. The CMA asserted that this was contrary to the Unfair Terms in Consumer Contracts Regulations 1999, the Consumer Rights Act and the Consumer Protection from Unfair Trading Regulations 2008.
The court had to decide whether the administration fee was an unfair term. This requires considering the relevant balance in the parties’ rights and whether any imbalance is contrary to good faith. The CMA asserted that Care UK was not providing any specific additional service in return for the administration fee which should thus be part of the ordinary care costs. However, the court found that the fee was not unfair. Care UK did provide additional services such as a pre-admission needs assessment, and preparation of a care plan.
The court also had to consider whether the fee was an unfair commercial practice. It had to consider whether it amounted to a misleading action, misleading omission or aggressive commercial practice, leading to a transactional decision being taken that would be different to that of the average consumer.
The CMA relied upon the fact that the information on price provided by Care UK on its website did not refer to this fee. The fee was not calculated on an individual basis, and was only disclosed once potential consumers were interested in moving into the care home.
The court rejected these three assertions in relation to unfair commercial practices relied on by the CMA. It considered the average consumer would realise that the guideline price information may not be comprehensive, and would not expect the calculation of that fee to be specific to the particular resident. Nor was the timing of the discussion of the fee inappropriate.
Obviously, the case turned on its own individual facts, but it has provided useful guidance on whether fees of this sort can properly be charged.
However, please note that the CMA is seeking permission to appeal.