The CMA expects all relevant care homes “to review as soon as possible and, where necessary, change their contract terms and practices or risk enforcement action.”

A failure to comply with CMA advice may result in enforcement action by the CMA and local authority Trading Standards, actions by residents under consumer law, action by sector regulators or by the relevant Ombudsmen. While these may have monetary consequences the impact of reputational damage for your business may far outweigh these sums.

Key messages

The CMA sets out the following time periods for charging fees after a resident’s death that it considers “fair” under consumer law:

  • only charge for up to 3 days (from the day following the resident’s death), and have a mechanism in place to stop this charge should the room be re-occupied within this period;
  • only charge for up to 10 days (from the day following the resident’s death) until the resident’s possessions are cleared from the room, unless there has been a written request from the resident’s representative asking for an extension to this period (permission should not unreasonably be withheld);
  • clearly set out any charges for removing the resident’s possessions, storing them and ultimately selling or disposing of them, if they are not removed within the agreed period.

Detailed guidance is provided by part-funded residents including:

  • any top up fees payable after the resident’s death by a third party can only be for the same payment period as the local authority pays (it is recommended that this should be up to 3 days from the day following the resident’s death);
  • you cannot charge for any shortfall in the Funded Nursing Care payments as once someone dies they no longer require nursing care;
  • you cannot charge a third party for any shortfall in local authority funding – this must be settled between the care home and the local authority.

Next steps

To minimise the risk of disputes and the associated financial and reputational costs of these, operators should ensure:

  • prospective residents and their representatives have “prominent, clear, accurate and full information about the contract terms that will apply in the event that the resident dies”;
  • such terms should be brought to the attention of the prospective resident;
  • these terms should also be clearly communicated to the resident’s representative following the resident’s death.

Our team can help protect your business by:

  1. Reviewing your contracts to see if they are compliant with current law and relevant advice and guidance.
  2. Advising you on steps you can take to minimise disputes with residents.
  3. Supporting and advising you on any disputes to minimise any adverse financial and regulatory consequences.

Please contact Mike Clifford or Sarah Skuse for further advice and to find out how we can help you.