The Competition and Consumer Protection Commission (the “CCPC”) has today published the first legally binding guidelines for contracts of care for residents in long-term residential care services (the “Guidelines”). The Guidelines set out the obligations and responsibilities that providers must adhere to under consumer protection law and are aimed at providing greater transparency, clarity and certainty for consumers.
The Guidelines set out the obligations and responsibilities that providers must adhere to under consumer protection law and are aimed at providing greater transparency, clarity and certainty for consumers. The Guidelines are available to view in full here.
In the background section of the Guidelines, the CCPC notes that engaging the services of a nursing home may be one of the most expensive purchases that a consumer will make in their lifetime.
In the nursing home sector, the relationship between the nursing home and the resident is often based on the terms and conditions that are contained within the contract of care, which is generally a standard form document with terms that have been drafted in advance with little or no opportunity for the consumer, or their representative, to negotiate or change.
Ultimately, the purpose of the Guidelines is to assist providers of long-term residential care services for older people in nursing homes comply with their obligations arising from the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995, as amended (the “Regulations”), which provide specific protections to consumers who enter into standard form contracts for goods or services, including nursing home services. These protections ensure that consumers are not bound by unfair terms and mean that standard terms must be provided to consumers in plain and understandable language.
Under Section 3 of the Guidelines, the CCPC advise that:
- Contracts of care are to be presented in plain and intelligible language which the Guidelines explain means “must put the consumer in the position of being able to assess the consequences of each term”.
- “Catch all” terms with respect to guarantors run the risk of being unfair under the Guidelines. Where there is a lack of certainty or clarity in the contract of care, a guarantor and resident may not fully understand or appreciate what they are committing to. All details of the obligations and responsibilities which a guarantor will assume must be outlined clearly and unambiguously in the contract.
- Particular attention must be paid when drafting terms which limit or exclude liability of nursing homes. The CCPC consider this vital in order to maintain a safe and secure environment for residents. Any such term needs to be explicit in order to ensure clarity for residents on the practical effects of such a term. Terms which use vague or uncertain wording (for example, “in accordance with all legislative and regulatory requirements”) are so broadly drafted that residents are unlikely to understand the practical effect of such terms.
- Where there is a breach of contract, any financial sanctions must be “reasonable, proportionate and reflective of the loss incurred by the nursing home”.
- Any terms which seek to unreasonably restrict a resident from receiving visitors run the risk of being challenged on fairness grounds. The circumstances in which visitors may be prohibited should be very limited.
- The grounds on which a contract of care may be terminated must be precise and clear-cut from the point of view of the resident. A wide discretion on the part of the nursing home with regard to termination is inadvisable.
- All fees should be included in the upfront fee and sufficient detail must be included surrounding variations or additions to fees. Ideally, according to the CCPC, all fees should be included in the upfront fee for the services to be provided. Where this is not possible, all fees, whether mandatory or optional, should be provided to any prospective resident. Where the additional fee is genuinely optional, then this has to be communicated clearly to the resident and the resident should be afforded the opportunity to either agree or disagree to availing of the service concerned.
Other matters outlined in the Guidelines relate to periods of absences of a resident, terms which allow nursing homes avoid legal obligations, and contractual arrangements following the death of a resident. Helpfully, the Guidelines contain examples of terms/clauses that could potentially be unfair. Schedule 3 of the Regulations also contains a “Grey List” of terms that may be considered unfair.
The Guidelines have a legal status. The CCPC is empowered, pursuant to section 10(3)(h) of the Competition and Consumer Protection Act 2014 and section 90 of the Consumer Protection Act 2007 (the “CPA”), to publish guidelines to inform and assist traders in understanding their obligations under consumer protection law. In any proceedings before a court, guidelines issued and published under section 90 of the CPA are admissible in evidence. If any provision of the Guidelines is relevant to a question arising in those proceedings, the provision may be taken into account in determining that questions.
It is important to note that, under the Regulations, even if a consumer accepted the terms when entering into the contract, this does not necessarily mean that he or she is bound by unfair terms. Such terms are never valid if they are in breach of the Regulations. The entire contract will not be binding if the contract is not capable of continuing without the existence of the unfair term. The CCPC has the power to apply for a court declaration that a term is unfair, but also has the power to accept undertakings from a nursing home in respect of an infringement of the Regulations.
Nursing home providers across the country should now review their standard form contracts of care in order to ensure that they do not fall foul of the Guidelines and/or the Regulations.