Care home giant wins legal battle over £3,000 fees: Care UK has won court battle over watchdog over claims it imposed charges on residents
One of Britain's biggest care home providers has blocked a legal challenge that would have forced it to shell out compensation to hundreds of residents.
Care UK, which was accused of levying controversial administration fees of up to £3,000, has won a court battle against the markets watchdog over claims it levied the charges on 1,600 residents.
The Competition and Markets Authority went to court alleging the fees were unfair and were not properly disclosed to customers.
But the High Court has now ruled that the company disclosed the fees early in its discussions with customers and it provided a 'very significant' service in return.
Helping hand: Care UK was accused of levying controversial administration fees of up to £3,000
Care UK, owned by private equity giant Bridgepoint, has maintained that the fees were 'widespread across the care home sector'.
The CMA has until the end of this week to seek permission to challenge the ruling at the Court of Appeal.
The judge said Care UK started charging the fees in 2013 to recover the additional costs of taking on residents who fund their care themselves rather than through the NHS.
The judgment said: 'Care UK took its responsibilities to its customers seriously, recognising the pressure that many would be under when they were dealing with the admission of a permanent resident to a care home, and emphasising it was important in those circumstances that the contractual details were properly explained at the outset.
'That conclusion is not undermined by the fact that Care UK also identified the administration fees as a basis on which additional revenue and profit could be made.'
The judge also concluded that Care UK generally discussed the fees during a customer's first visit to the care home.
The CMA had already forced Care UK to pay more than £1million in refunds to residents funded through the NHS. Care UK made the payouts over claims it levied an unfair additional fee for essential services on residents in its premium homes.
Care UK was also forced to axe the fee for current and future residents.
A CMA spokesman said it brought the case because of 'practices which were causing us concern', adding: 'We will consider the implications of the judgment carefully, noting the judge's view that her ruling largely turned on the specific facts of this particular case.'
A Care UK spokesman said: 'We have remained confident in our defence that the administration fee reflected the efforts required to effectively welcome new residents.'
- Guides for my finances
- The best savings rates
- Best cash Isas
- A better bank account
- A cheaper mortgage
- The best DIY investing platform
- The best credit cards
- A cheaper energy deal
- Better broadband and TV deals
- Cheaper car insurance
- Stock market data
- Power Portfolio investment tracker
- This is Money's newsletter
- This is Money's podcast
- Investing Show videos
- Help from This is Money
- Financial calculators
This is Money's brilliant guide now available on the Kindle
