The Importance of Consumer Law Obligations in Social Care: Transparency

Topics covered: challenging local authorities, Consumer Law, Consumer Law Obligations, health and social care, legal obligations, provision of social care, service user care

An often overlooked, but fundamental, aspect of the social care industry is consumer law, particularly in relation to the contractual relationship between provider and service user where the services are privately funded. At its core, social care is a contractual relationship between consumer (i.e. service users) and trader (i.e. providers). As such, providers who enter into contracts with privately funded service users will owe them certain legal obligations in relation to the services they provide. Many of the obligations which a provider owes to a service user under contract, from a consumer law standpoint, overlap with the obligations as set out in the legislation which governs regulation of these services, and so will not be completely unfamiliar territory. However, the obligations imposed on providers by consumer law will in some instances go beyond those which are required from a regulatory standpoint and can have even further reaching consequences in the instance of a breach.

There are four main obligations under consumer law which providers must be aware of:

  1. Transparency;
  2. Equality;
  3. Quality of Service; and
  4. Complaint Mechanisms.

The consequences for failing to meet obligations under consumer law can result in court proceedings, compensatory relief for service users who were negatively impacted by a breach, including potentially disapplication of non-core contract terms where they are deemed to be unfair, and potential criminal prosecutions. All of these could result in a negative impact on the financial viability of the service as well as damage to reputation and potentially prompt additional action by regulatory bodies (i.e. the CQC), further exacerbating these negative consequences. Therefore, it is very important for providers to understand exactly what their obligations are under consumer law and how this can affect their delivery of care.

At Ridouts it is not only our job, but our primary objective to assist providers in navigating the legal landscape of the care sector so that they can focus on the most important aspect of their business – delivering safe and high-quality care.

This article will be the first in a series of four that is intended to give providers a basic understanding of their obligations to service users under consumer law as outlined above and how these relate to their regulatory obligations. Please note that this will only apply to privately funded service users as they will contract directly with the provider, as opposed to publicly funded placements, who will contract with the local authority who then contracts with the provider.

Transparency – The Requirement

This is the obligation placed on providers to provide certain “up-front” information to prospective service users in order to enable them to make an informed decision about which provider they choose to enter into a contract with.   

While there is no statutory obligation to provide this “up-front” information, it will be difficult for many providers to argue that they are compliant with consumer law obligations where they have failed to do so. This obligation  can be derived from the numerous rights which consumers possess where the provision of services are required, including the right to a fair price, to expect that the services will be performed with reasonable care and skill and an expectation that information provided about the trader will be binding. Central to all of these rights is consumer expectations. This has been extended to an obligation on the providers to expressly state what consumers can reasonably expect prior to contracts being entered into. This does not serve as a limit on the freedom to contract, or what terms may be agreed to, but rather provides an even playing field for both parties by allowing the consumers to have sufficient information to make an informed decision.

The Competition and Markets Authority, which is a non-ministerial government department responsible for regulating competition law compliance and strengthening business competition and preventing and reducing anti-competitive activities in the UK, has produced helpful guidance on what would be considered adequate “up-front” information:

  • Funding arrangements;
  • Key features of the service (i.e. care needs you are registered for; accommodation specifics; facilities and services available; size; description of staffing arrangements; etc.)
  • Highlight surprising or important terms and conditions; and
  • Fees, charges, and payments.

All of this is likely to be common-place for many services and provided at initial stages of enquiry for prospective service users. It is suggested that this information be included on the website (no more than one click away from the home page), in any type of information pack given to prospective service users and provided over the phone where necessary.

It is also not just a matter of ensuring that this information is provided, but potentially sign-posting this or directing prospective service users to this information, particularly where your service may have out of the ordinary terms and conditions.

Essentially, the goal is to ensure that prospective service users can make informed decisions prior to contracting with a provider. Therefore, it is imperative that this information is clearly laid out in an easy to read and understandable format.

There is also scope for additional information to be provided to prospective service users before committing to a service, including but not limited to:

  • Details of any trial period (if applicable);
  • Detailed information on policies regarding changes in funding arrangements;
  • Complaints procedures;
  • Termination clauses and notice periods;
  • Information on the business (i.e. trading name, address, contact details, etc);
  • Information on how and by whom home is regulated by;
  • Registration details;
  • Up to date food and hygiene ratings;
  • Contents Insurance information;
  • Pets policy;
  • Where to find a copy of your standard terms and conditions; and
  • Information required by sector-specific regulations.

Thus, this obligation placed on providers can appear to be quite onerous and far reaching.

Regulatory Overlap

However, this obligation also overlaps significantly with regulatory requirements, particularly in relation to fees and information about the service.

Regulation 12 of The Care Quality Commission (Registration) Regulations 2009 (“Registration Regulations”) requires providers to supply the Commission with a statement of purpose that outlines the following:

  • The kinds of services provided and the range of needs that can be met by those services;
  • The name of the service provider and of any registered manager, together with their business address, telephone number and, where available, electronic mail addresses;
  • Legal status of the provider; and
  • Details of the locations where the services are to be provided.

Further, Regulation 19 of the Registration Regulations requires providers to supply prospective service users with an outline of the fees associated with their care and support needs in writing as soon as practicably possible.

Additionally, the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 impose related obligations on providers, including requirements to receive and act on complaints, display performance assessments, and obtain consent from service users and/or relevant persons before providing care and treatment.

All of these can be traced back to an overall obligation to be transparent about what the service is, what it does, and the arrangements (i.e. fees) for obtaining that service.

Therefore, the regulatory requirements imposed on providers seem to run parallel to those required for consumer law purposes. However, what many providers may be unaware of is that failure to meet these consumer law obligations can result in a wider range of actions taken against a provider.

Possible Consequences for Providers

Of particular importance, especially in today’s economic climate, will be fees and what constitutes a fair price for the care provided (including increase in fees due to increased needs) and what care is being provided. This is likely to be the area of the contract that is most disputed and one that is certainly subject to limitations from a consumer law perspective. It will also be the most important one for providers because it is this exchange of services for payment that keeps them in business.

These services come at a cost and these costs will be different for different levels of need. Careful drafting of terms will be crucial. The law will imply terms where these are not explicitly stated and may also give scope for the disapplication of terms, especially where these may be considered unfair from a consumer law perspective. This could leave providers exposed to unwanted litigation and lend themselves to a decrease in revenue stream.

Providers will want to ensure that they have the correct contract terms, not only to clarify their obligations, but also to enforce collection of unpaid fees as well as to enable them to increase fees where this is warranted (i.e. aligns with a change in care needs).

Therefore, it is not only in the interests of the service user to have this up-front information provided, but it also protects the provider because it can set expectations as well as protect them from unwanted civil and/or breach of contract claims and regulatory action (i.e. cancellation of registration, conditions imposed on registration, unannounced inspections that result in a ratings downgrade, etc.). This will be particularly important where a dispute arises between provider and service user over the care provided as set out in the contract, whether it is in relation to failure to meet care needs or a dispute over the fees.

As long as the provider has given the above information in prompt and transparent manner, compliance with both consumer and regulatory law can be demonstrated and prevent claims against the provider in the form of damages or other reliefs sought by service users. It can also be used as evidence to challenge regulatory action taken in relation to alleged failures to provide this information. Record keeping will be imperative.

Providers need not fret over this, because much of this is likely to be set out in the welcome packs sent to service users and the service user agreements in place. Therefore, in the case of ‘transparency’ obligations from a consumer law perspective, it is likely that many providers are already complying with this due to the regulatory overlap. However, they should be aware of the wider claims that can be made in consumer law where non-compliance is found, especially where terms are deemed unfair to the consumer or there is a perceived breach of the contract.

If you have ever experienced any issues with any authority or service user, or just want further advice and understanding on legal obligations related to the provision of social care services, Ridouts team of specialist solicitors is here to help you navigate the legal requirements. Please get in touch at 0207 317 0340 or

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