The following text field filters the results that follow as you type.
Ensuring clear contracts in care homes can prevent misunderstandings and legal complications
Published on 17 February, 2025
A recent investigation by the Local Government and Ombudsman into a care home’s contract issues is a lesson to all businesses on the importance of water-tight contracts.
As of March 2024, the government reported that 660,460 people were receiving long-term, local authority provided, adult social care. And with approximately 1.59 million individuals (2023-2024) employed by the adult care sector in the UK, this makes it one of the most demanding and complex working environments.
With such busy workloads and so much to organise, it’s important for care homes to ensure their contracts and operational structures are clear from the start, so they can avoid unnecessary payments and difficulties down the line.
Funded Nursing Care
In November 2024, a care home came under investigation from the Ombudsman. The investigation was sparked by an individual filing a complaint to the local authority. He complained that the home had not fulfilled its requirements under the contract he had with his mother, who was a resident in their care home.
According to the Local Government & Social Care Ombudsman website, the man stated that the home had “agreed to refund his mother’s estate money it had received as Funded Nursing Care (FNC) payments, but then the care home went back on this verbal agreement and did not refund the money”.
FNC payments are financial contributions made by the NHS in the UK, with the intent of covering the cost of nursing provided by a registered nurse in a care home. Those eligible are those who have been assessed as needing nursing care but do not qualify for full NHS Continuing Healthcare (CHC) funding.
The Ombudsman’s findings
The Ombudsman investigation was carried out predominately by Ms Amberdeep Somal, who is a Local Government and Social Care Ombudsman, Chair of the Law Society England and Wales and, previously, a judge for the Ministry of Justice for 20 years.
Somal’s approach was very detailed. She spoke with the family and considered the information provided, looked at the home’s complaint response, assessed the contract in question – and emails and correspondence alongside legislation etc. She concluded that in the contract it had provided, it was unclear about what would happen to the FNC payments.
This led Somal to advise the care home to reissue the resident’s final invoice and deduct the FNC payments it had received. On the back of this, the home has amended its contract – and issued it to all residents.
The Ombudsman shared its findings with the Care Quality Commission, and since has issued an Adverse Findings Notice – a formal document that can be issued by regulatory bodies, which highlights concerns and issues found. It’s often seen as an ‘early warning’ – but it can often be followed by a formal notice of improvement and enforcement action.
Lessons to be learnt
Somal said: “This case highlights the importance of care providers having clear contracts which state what will happen when a client is in receipt of FNC payments, as emphasised in guidance issued by the Competition and Markets Authority and the CQC regulations.
“At the time the woman was living in the home, the provider’s contract was silent on this exact scenario, and so I have asked the care provider to deduct these payments.”
Ensuring operations are run effectively
Contracts and operations go hand in hand – so, on the back of this, Markel’s value-add services can help brokers support their clients on these complex issues. These services can help, for example, care homes ensure contracts are fit for purpose.
Our Business Hub, for example, is an online hub containing hundreds of customisable contracts, policies, forms and letter templates covering every area of business. These are written by expert solicitors who have daily experience of advising on various business issues.
Markel Care Practitioners are experts across the health and care sector. They provide a range of key business services to help providers meet regulations and ensure operational viability. And through the Markel business and legal helpline, our in-house team of lawyers offer advice on everyday matters including contractual queries.
Through these services, brokers can help their clients avoid difficult contractual situations.
Markel’s Business Legal Helpline, Business Hub and PR crisis management are all offerings that can assist businesses in creating strong and fit-for-purpose operations and contracts.
Sources: