by Matthew Austin , Cian Clinch August-26-2019

In May 2019, the Competition and Consumer Protection Commission (the “CCPC”) published guidelines to assist nursing homes in providing their residents with contracts of care that are fair and easy for residents to understand (the “Guidelines”).

The Guidelines use examples of clauses that are regularly contained in contracts of care and explain why such clauses could be deemed to be unfair and, as a result, potentially unenforceable. The Guidelines can be read in full here.

The CCPC is empowered by statute to publish guidelines to inform and assist traders in understanding their consumer law obligations. If a legal dispute arises in relation to a contract of care, the Guidelines can be admissible as evidence in Court and the Court may have regard to the Guidelines when considering whether a particular clause is fair.

The main points raised by the CCPC are set out below, however it should be noted that the Guidelines set out a number of other important points that should be considered:

  • Contracts of care are to be presented in plain and intelligible language.  Legal or technical jargon should be kept to a minimum and if there is any ambiguity regarding the meaning of a particular clause, it will be construed in favour of the resident.  
  • If the contract requires a guarantor, both the resident and guarantor should understand the full implications of the obligations being imposed. For example, there should be no ambiguity regarding when the guarantor’s payment obligations become triggered and what their potential exposure is. 
  • Any terms which attempt to exclude or limit the liability of the nursing home in circumstances where the nursing home would otherwise be liable, such as negligence, are at risk of being considered unfair and therefore unenforceable.  Nursing homes therefore need to be careful to ensure that any limitations on their liability strike a fair balance between the rights of the nursing home and the rights of the residents.
  • If a resident breaches the contract, any financial sanction imposed on them must be reasonable, proportionate and reflective of the loss incurred by the nursing home. The Guidelines suggest that any interest on outstanding fees or other financial penalty imposed that is not directly linked to the financial loss suffered by the nursing home as a result of the breach is potentially unfair.
  • There should be extremely limited circumstances in which visitors can be restricted and the grounds for restriction should be clearly outlined to the resident.
  • Unilateral termination of the contract or terms allowing the contract to be terminated on grounds outside the control of the resident could be open to criticism. The CCPC notes that residents need certainty regarding the circumstances in which they may be required to leave the nursing home and clauses that allow for them to be removed as a result of matters outside of their control (for example, as a result of a visitor being disruptive) are potentially unfair.
  • All fees should be included in the upfront fee. The CCPC recognises that this is not always possible and advise that details of all additional and/or optional fees should be clearly communicated to the resident.

The CCPC has noted that they will allow a period of time for nursing homes to consider the Guidelines and amend their contracts appropriately.  It appears that the CCPC then intends to assess compliance with the Guidelines across the sector.

Should you have any questions in relation to your standard form contract and its compliance with the Guidelines, or require assistance with updating your standard form contract, please contact Matthew Austin or Cian Clinch

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