A home care provider based in the North of England has escaped paying a charge of £180,000 plus VAT (£216,000) to cancel 800 phone connections.
Be Caring, which provides services in Newcastle, Leeds, Liverpool and Manchester, said the cost imposed by its mobile phone supplier, Blu-Sky Solutions, would have been “catastrophic” and “highly likely” to have resulted in redundancies being made.
The High Court of Justice held that Blu-Sky was not able to charge an administration fee of £225 per cancelled mobile phone connection because the clauses relied upon were not incorporated into the contract; they were “unduly onerous” clauses which were not fairly and reasonably drawn to the defendant’s attention; and the administrative charge was a “hugely inflated compensation” for loss of profit and “penal in nature”.
In a recent blog post, Emma Watt, associate at Anthony Collins Solicitors, said that whilst the care provider was fortunate that the court held the cancellation fees unenforceable, the judge was not influenced by Be Caring Limited’s status as ‘the UK’s largest employee-owned not for profit social care provider’.
“The judge, in this case, was critical of the supplier for not providing a copy of the terms with the order form and for not making it clear that Be Caring would be exposed to a very substantial contractual liability if it chose to cancel,” she said.
Whilst the judge accepted that “the [standard terms and conditions] were reasonably clearly brought to the defendant’s attention in the order form”, the offending clause itself was not and was “cunningly concealed in the middle of a dense thicket which none but the most dedicated could have been expected to discover and extricate”.
Watt stated that this case is a reminder for both parties to be clear whether signing an order form marks the first stage in their commercial relationship or if it concludes their whole contract.