Healthcare providers must navigate a complex legal and regulatory landscape to provide their essential services.
In addition to the range of laws specific to the provision of health services in the UK, healthcare providers must also comply with broader commercial legislation. One key area to consider is consumer legislation and its impact on businesses in the health sector.
As far as the law is concerned, patients, as buyers of health services in a non-business capacity, are consumers, rather than businesses. The UK’s key consumer legislation, specifically the Consumer Rights Act 2015 (the “CRA”) and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the "CCRs").
For healthcare providers this legislation warrants a closer examination.
The CRA applies to all contracts for the sale of goods, services and digital content between traders (which extends to healthcare providers) and consumers. Its principle objective is to protect the rights of consumers and the consumer's remedies if these rights are not met, as well as the requirement for consumer contracts and notices to be fair and transparent.
Chapter 2 of part 1 of the CRA regulates the sale of goods. For healthcare providers, this would include the sale of medicine, prescriptions and medical equipment. The CRA outlines that any goods supplied must be of satisfactory quality, fit for purpose and as described. Should these requirements not be met, the CRA provides the consumer with several remedies.
Under which circumstances each remedy can be exercised is relatively complex and healthcare providers should ensure they have a sound working knowledge of this legislation. In brief, should the product be faulty or defective, the consumer may reject the goods within a 30 day period, and may require the trader to repair or replace the goods at the trader’s cost. If this is not possible, the consumer may demand a price reduction or return the goods for a refund. If the goods are returned after 6 months, the trader may make a reasonable deduction from the refund, to reflect any use the consumer has enjoyed during their period of ownership.
Note that this position is different to the situation where the consumer simply changes their mind about goods purchased (but the goods are not faulty). In this case, whether they can return the goods for a refund is governed by the return policy of the trader.
Purchases of digital content, for example healthcare apps, by a consumer, are treated in a similar way to goods, as above.
Chapter 4 of Part 1 of the CRA applies to the provision of services, such as appointments and operations, with requirements that all services must be performed with reasonable care and skill, at a reasonable price and within a reasonable time. Should the service provider fail to comply with these requirements, again, the CRA provides the consumer with several forms of redress. In particular, the consumer may require the trader to repeat its performance of the services within a reasonable time and to bear any additional costs in doing so.
Should repeat performance not be possible within a reasonable time and without significant inconvenience to the consumer, the consumer may be entitled to a price reduction for the services, which can amount to the full cost of the services.
Turning to the CCRs, this legislation focuses on what pre-contract information businesses must provide to consumers, as well as "cooling-off" periods for consumers who buy online or off-premises.
Under the CCRs, there is a particular focus on how the contract is formed (e.g. online (distance contract), on-premises or off-premises)
Businesses must give specific information to consumers when goods, services or digital content are being provided at a distance (i.e. online), with other less onerous provisions applicable to on and off premises sales. The specific information required can be found at schedule 2 of the CCRs, and includes details such as the delivery costs, delivery payment and performance arrangements and the consumer’s cancellation and return rights. This information must have been provided by the time that the business confirms the contract by acknowledging the order, and must be in a durable medium such as on paper or via email.
Should the healthcare provider fail to provide such information, they will be in breach of the legislation. Where the trader fails to provide the consumer with information regarding its right to cancel the contract, the CCRs go further, giving additional rights to the consumer beyond those afforded to them under the CRA. The CCRs give the consumer 14 days after the day on which they receive the goods to cancel the contract, without giving any reason, or 14 days from when the services or digital content contract was entered into. Should the trader fail to inform the consumer of this, the cancellation period will end 14 days after the consumer receives the information, if that information is provided in the 12 months after the day on which the consumer took possession of the goods. If the trader fails to provide the information in the following 12 months, the consumer’s cancellation period will extend for a further year. Ensuring this information is communicated to the consumer is therefore of great importance to businesses.
Other notable provisions to be aware of in the CCRs relate to taking payment from the consumer for the goods or services. The CCRs require that information about payment arrangements be provided pre-contract.
It is common for many businesses to require customers to pay in advance of receiving their products or services. However this is potentially in breach of the law, because for the consumer this can be detrimental if:
One potential way to navigate this issue is for businesses to:
For some businesses, it is not possible to defer taking payment until they are ready to dispatch goods or supply services or digital content. This is because certain payment providers will not allow businesses to store consumers' payment details; the trader is obliged to take payment when the consumer enters their details at the time of order.
In the case of services, some businesses may take payment immediately because they need money upfront to pay its suppliers or subcontractors (for healthcare providers, this may be outsourced health practitioners, such as physiotherapists or phlebotomists). In such situations, the business should consider initially only taking a deposit (and making clear where certain sums are not refundable after a certain time), together with some form of staged payments where the services are provided over a period of time. Staged payments are generally acceptable where they fairly reflect businesses' expenditure.
An alternative is to place customer monies in escrow, however this is not always practical for many businesses.
The CRA and CCR operate alongside each other, and if there is a conflict, the consumer will enjoy whichever rights are more favourable to them.
However it should be noted that unlike the CRA, the CCRs do not apply to contracts for the supply of a medicinal product by administration by a prescriber (such as a medical or dental practitioner or a pharmacist) or under a prescription, or for the supply of a product by a health care professional as part of the health service where the product is one that can be available for free or on prescription.
Please also note that for the purposes of this note we have focused on key consumer-legislation, and as such we have excluded from the scope of our review certain types of consumer relationship, including contracts for financial services, contracts for consumer credit and non-contractual consumer protections (e.g. product liability, misleading advertising).
The UK government are currently in the process of reforming competition and consumer law, with the Digital Markets, Competition and Consumer Bill presented to Parliament on 25 April 2023. Some of the key areas of reform include creating a new regime for subscriptions to enable consumers to more easily cancel them, tackling fake reviews on digital platforms and an increase in enforcement powers for the Competition and Markets Authority, including an increase in fines for breaches of consumer protection law. Healthcare providers will need to be mindful of these forthcoming changes and ensure they update their practices to ensure they are compliant.
Clearly, the need to act lawfully makes compliance with consumer law critical for all businesses. However, for healthcare providers, compliance assumes even greater importance. Ethically, healthcare providers should uphold the rights of consumers. If they fail to do so, they are not acting in the best interests of their patients and risk significant reputational damage.
Staying abreast of any updates to consumer legislation, such as the new Digital Markets, Competition and Consumer Bill, is therefore of vital importance for healthcare providers for legal, ethical and commercial reasons.