Nursing Home Contracts of Care

Under the Health Act 2007, nursing homes in Ireland are required to enter what is known as a ‘contract of care’ with each resident.   This summer, the Competition and Consumer Protection Commission (the “CCPC”), in response to concerns over unfair terms in such contracts, published guidelines (the “Guidelines”) to ensure that nursing home contracts with residents do not incorporate unfair terms.

The aim is to give greater transparency to residents and their families as to what they are signing up to. Contracts of care should be provided to consumers in plain English using easy to understand provisions.

What is an Unfair Term:

An unfair term is one that significantly imbalances the contract and places the consumer at an unfavourable disadvantage.

Under section 3 of the Guidelines, the CCPC advises in regard to the following terms in nursing home Contracts of Care:

Fees

Consumers must be informed of all details of fees (including circumstances around additions and variations to fees) before a contract is entered into. Where optional services (with optional fees) are offered to residents, they should be afforded the opportunity to either agree or disagree to availing of the services offered.

Changes to the Contract

Permitting changes to a contract without prior consultation is unfair unless a change is required to comply new regulations. Any changes made after signing must be reasonable and clearly communicated to the resident as soon as possible.

Guarantor Terms

Terms in a contract that pass obligations from the resident to a guarantor may be unfair if they lack certainty and do not fully inform the guarantor of the obligations that they are entering into.

Sanctions for breach of contract

If a breach of contract occurs, the resident should only be liable for the actual damage caused. Terms that bind consumers to pay interest on any outstanding fees must be proportionate.

Visitation Terms

A term that unreasonably restricts residents from receiving visitors or allows the nursing home a wide discretion to restrict visitors, may be classified as an unfair term. Visitors should be restricted only in very limited circumstances.

Absence Terms

The contract of care should set out how periods of absenteeism are dealt with in regard to fees. The terms must be fair to the resident, for example the providers must consider the cost savings that they will incur whilst the resident is not availing of its services.

Termination Terms

It should be straightforward for a consumer to terminate the contract of care. The terms in which a contract can be terminated by the provider must be laid out in the contract of care in an understandable and precise manner. A term imposing a wide discretion on the part of the nursing home will not be fair on the resident.

Grey List

The Guidelines refer to the “grey list” which is a non-exhaustive list of terms that may be unfair in some circumstances but not others.

Exemption

The main terms of the contract, such as the nursing home services offered and prices for the services, are exempt from the Unfair Terms Regulation provided they are outlined in plain, simple and transparent language.

Other

The Guidelines provide where ambiguity arises in a contract of care, words are interpreted in the favour of the consumer. Onerous terms should not be hidden or put in small print of contracts.

Conclusion

Nursing homes across Ireland should review their contracts of care to ensure that they are in compliance with the Guidelines.

About the Author, Gríana O’Kelly – Partner, Corporate and Commercial Department.