If students were misled about this term, what are the implications?

There’s a weird yet persistent rumour going around the sector that I feel like I ought to address.

I keep hearing that people are being told that “OfS won’t let us reduce the amount of face to face teaching we’re delivering”, or that “OfS will fine us if we move to mostly online”.

I’d be surprised. Without going over various bits I’ve written on OfS and the way it interprets and enforces consumer protection legislation again, the TL;DR here is that universities have to do what they promised, get consent to do something else, or give a discount/refund. It’s the law, not some monster in Nicholson House.

Of course if you’ve overpromised, don’t want to give discounts/refunds and/or don’t want to get individual consent to change things, you could always blame OfS. It might work.

So what is going on? At Independent HE’s policy conference the other day, OfS CEO Nicola Dandridge was concerned about changes to provision:

One of the concerns we are consistently hearing from students – and also from our discussions with providers – is that there continue to be issues about communications and students saying and thinking that they’re not being communicated with effectively or in a timely way about changes to provision”

And as she made clear – OfS does not expect to take any regulatory action where it reckons “reasonable efforts” have been made to protect the interests of students and where standards have not been compromised. But there are legal aspects too:

Where students are not getting what they signed up to, [or] not getting what they expected, there may be at least a prima facie breach of contract and a breach of consumer protection regulations, albeit that the steps that universities and colleges have taken will have mitigated the impact of the breach either entirely or to a greater or lesser extent.”

Bloody consumers

I often hear things like “an educational system regulated by consumer law is everything that is wrong with higher education” or words to that effect. I understand the concerns that people have about framing education as a “purchase” in a “market” and the impacts that can have on how students (and indeed society) view education.

But for me, given the financial and opportunity costs involved in higher education participation, I think it’s pretty reasonable for providers to be required to do what they promised, get consent to do something else, or give a discount/refund. Ideally we wouldn’t frame that in “consumer” law, but we are where we are.

And where that is is a lot of anger about fees and a clamour for “refunds”. I’ve been ploughing through the qualitative data in our forthcoming research on non-continuation over the past few days, and it’s difficult to overestimate the extent to which students are indignant and angry at having to “pay” “full price”. It’s an issue both about principle and practice. And it’s not at all clear that it’s an issue that’s going to go away.

Elsewhere on the site the authors of The Law of Higher Education assess the prospects of students obtaining a refund under the Consumer Rights Act 2015 and contract law. But there’s another legal aspect to this – the much less discussed Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Protection (Amendment) Regulations 2014, a guide to which is available here.

Commitments

You might recall that over the summer, OfS advised that students will need to understand what a provider is committing to deliver “in the current circumstances and in different scenarios, how this will be achieved, and the changes that might need to be made in response to changing public health advice.”

I *think* what they were getting at was making sure that universities didn’t fall foul of the regulation I reference above. The regs outlaw misleading actions – false information, or information likely to mislead the average consumer in its overall presentation. Omissions of information are a problem too. If the information causes or is likely to cause the average consumer to take a transactional decision they would not have taken otherwise, there’s an issue. The action just has to be a “significant factor”.

Interestingly, there is no need to demonstrate any loss. Nor does the student have to show the university acted dishonestly, recklessly or even negligently. The standard remedies apply on a strict liability basis: if the university’s actions were misleading or aggressive, then the remedies apply.

In the legislation, there’s a difference between a “misleading action” and a “misleading omission”. Both are unlawful, but only the first gives rise to a right to a remedy for a consumer. But the limitation is relatively narrow. It only applies where the trader has omitted material information but the overall presentation of the product or service is not misleading. In most situations, omitting material information would create a misleading overall presentation, and therefore counts as a misleading action.

Dancing is my remedy

The first main remedy is the right to unwind the contract and get their money back. Students have 90 days to complain (unlike “cooling off” regs which only allow 2 weeks). Some students may want to back out in that first 90 days even though the university thinks that a fee liability has kicked in.

Students don’t have to want to unwind the contract, and students might be upset beyond the 90 day deadline. In these scenarios they could get a discount based on how egregious the misleading or aggressive practice was. It’s 25% if it is more than minor; 50% if it is significant; 75% if it is serious; and 100% (full price) if it is very serious. “Seriousness” is assessed by reference to the behaviour of the (university) trader, its impact on the (student) consumer, and the amount of delay.

Many have noted that home undergraduates may not “see” any discount given the loan system, but as well as a discount, student consumers could claim damages if they have suffered losses that exceed the price paid for the relevant goods or service. Rent on a house not being used, for example. Damages can cover distress and inconvenience, as well as losses suffered by the (student) consumer because of a contractor payment they made as a result of the misleading or aggressive practice (heating bill in their HMO or a buss pass or something).

The regulations also expressly provide that consumers have a right to damages if the consumer has suffered “alarm, distress or physical inconvenience” or “discomfort” caused by the misleading or aggressive practice (“I was not warned there would be no real social activity”?)

Under the regulations it is a defence to a claim for damages for traders to show that the misleading or aggressive practice happened as a result of a mistake or other cause beyond the trader’s control and that they took all reasonable precautions to avoid the misleading or aggressive practice from occurring. But this due diligence defence does not apply to standard remedies.

But this due diligence defence does not apply to standard remedies.

Would the courts agree?

So it’s worth wondering whether the courts would agree with a student that what they were told/warned about would amount to a “misleading” practice. Because if failing to warn students in the way OfS suggested “counts”, it feels like a lot of students would think they have a case.

The information that consumers can be misled about can include the main characteristics of the product/service (availability, benefits, risks, composition, delivery, usage, quantity, specification etc) plus motives for the practice. Misleading omissions include omitting material information, hiding it, and providing it in a way that is unclear, unintelligible, ambiguous or untimely, or failing to identify commercial intent.

If (and it’s a big if) a student was able to prove that the information they got was wrong or there was an omission – and that this impacted their decision to “buy” – the remedies apply.

Interestingly for students, the legislation also means that the objective test of the “average consumer” might be unfair and cause hardship – the regulations apply a different test where the commercial practice is directed to a particular group of consumers or where a group of consumers is particularly vulnerable to the practice because of “their mental or physical infirmity, age or credulity” in a way which the “trader” could reasonably be expected to foresee. Aspects of that sound like they may well have applied to prospective students this particular summer!

In the end this needs some case law, or at least an opinion from a QC. We need to know how many and the extent of the aspects that students feel lied to about would count as part of what was “sold”. Does the “teaching” count? The personal tutoring “service”? The “social experience”? The “clubs and societies”? The labs? The library? The studio space? It certainly feels like the description of aspects of the product/service in the regs feels closer to “wider experience” than I suspect many universities would like.

But one of the bottom lines here is that relying on “successful delivery of the learning outcomes” – often through alternative delivery – might work under the Consumer Rights Act, but that’s not the only act to think about.