Student consumers, refunds, discounts and the law

David Palfreyman and Dennis Farrington review the legal position facing students in the pandemic, and ask whether their "consumer" rights will be helpful.

Much has been written about whether and how students deserve a part-refund of 2019-20 tuition fees – and a discount on 2020-21 fees – because of the Covid-19 disruption to both “face-to-face” teaching and more generally to the on-campus experience.

Wonkhe is kindly hosting our detailed assessment of the legal issues involved and in which we set out the June 2020 guidance from the OfS, OIA, and QAA – “paragraph 12.114a” being an addition to our recently revised Chapter 12 on “The Student Contract”, which is now with Oxford University Press ready for publication in the third edition of “The Law of Higher Education”, due later this year.

In this section we try to explain some of the complexities for a Court in trying to determine whether a student would be entitled to a refund or discount.

In a relationship

There is a contract-to-educate between the university and the student – to which all the usual concepts and remedies of the common law of contract apply and which, as we have called for over several decades, needs to be in a standardised, clear, comprehensive, fair, sector-wide format. We very much hope the OfS will push for this to happen.

It is a business-to-consumer contract (B2C), and the provisions of the Consumer Rights Act 2015 (CRA15) apply, along with other consumer protection legislation – in the blunt terminology of the Act the university is a “trader”.

As s54(6) of CRA15 states, the new statutory remedies granted to the consumer under the Act do not mean that the student can’t also seek “other remedies” – so a student could, in theory, utilise both CRA15 remedies, and also common law remedies.

CRA15 repeats the long-established consumer law protection, based on case law, that the university must supply its “service” (teaching, assessment, examining, and other facilities and services) “with reasonable care and skill” (s49).

Care, skill and quality

Here is problem one for the court – if the student is complaining about the quality of online teaching provision the global norm is that there is judicial deference to the proper exercise of academic judgement as a kind of academic professional immunity to challenge, so will any court entertain the student’s complaint over alleged poor teaching not delivered “with reasonable care and skill”?

The OIA is similarly prevented by its founding statute from taking such complaints – as it has just pointed out in its June guidance. Might the statutory requirements of CRA15 override this judicial doctrine, that otherwise would need a case to reach the UK Supreme Court to see this academic immunity ended? This has already happened long ago for doctors in medical negligence cases, and more recently for expert witnesses in other litigation.

Unhappy students

But are the new CRA15 remedies of more use to our aggrieved student? One allows the student to call for “repeat performance” (s55) so that any shortfall in delivery of the contract’s obligation upon the university is corrected “within a reasonable time and without significant inconvenience to the consumer”.

Clearly this might well be pertinent where the supposed deficiency is not in teaching quality but in the teaching quantum – X number of laboratory practicals or studio sessions have been missed which could not be replicated on-line. And where s55 can’t be complied with because “completing performance of the service in conformity with the contract is impossible” (or the trader can’t do so within a reasonable time and/or without causing significant inconvenience), then s56 offers “the right to a price reduction” of “an appropriate amount”.

So, problem two for the court – how to calculate the amount due to be refunded where those X sessions fall by the wayside?

And another thing

There’s another problem. Might the court in applying CRA15 be influenced by the cases arising in the common law of contract?

Whether the concept of “frustration” applies – so as in effect to bring the university-student contract to an end as being now “impossible of performance” (s1(1) Law Reform (Frustrated Contracts) Act 1943)? This seems unlikely, since Covid might make the teaching more difficult to perform and require its delivery in a different format, but not impossible to the extent that either the student or university would want to tear up the contract – or could lawfully do so unless both parties wanted to throw in the towel.

Whether there is a valid “force majeure clause” this shifts the risk from the university to the student, as where special circumstances arise that make performance by the university impossible (not just awkward, more costly, or inconvenient), the student must then just put up with whatever is offered or not offered as the way to muddle through. CRA15 potentially outlaws such a clause as “unfair” (ss61-76) unless it meets certain conditions in the way it was notified to the student and in the way it operates – and the OIA June guidance has stressed that the OIA would not expect a university’s reliance on any such FMC to be reasonable.

What if the student has accepted the likely messiness of 2020-21 teaching and on-campus life if the university has provided fair warning of what could happen? This is what the OfS/OIA guidance tells universities to do ready for September, and notes that doing so by way of updating “material information” is a requirement of consumer protection legislation. Thus, the 2020-21 university to student contract will have been amended, with the student’s acceptance, and so the student is in a weaker position to allege a breach during 2020-21.

And – where breach is alleged re 2019-20 or 2020-21 – it should be considered whether it has really led to any measurable and compensate-able loss for the student if in practice the university has achieved “substantial performance”? If the timetable towards completion of the degree course has been maintained, if there are no complaints from any professional body linked to the course that it no longer is a qualifying degree because stuff has been missed, if employers are not protesting about the degree suddenly failing to inculcate the right skills – then, arguably, there has been “substantial performance” albeit partially by way of different delivery, given the reasonable efforts the university has taken to mitigate the impact of the Covid-19 disruption.

Damages limitation

Finally, if there is a compensate-able breach, might the court award non-pecuniary damages on top of any other compensation? Here the OIA makes such awards on analogy with spoiled holiday cases, but doing so has never been yet tested by the Court of Appeal ruling on whether the higher education industry is to be treated like the package tour industry. Even if such awards are small, making payments of even £500-1000 to thousands of students would certainly not help a university’s covid-19-impacted 2020-21 finances.

Short of political intervention – as NUS called for in launching its June refund/discount campaign – we are sceptical that the courts will be awarding significant damages across the board to any and all students complaining that their universities have breached the contract by resorting to entirely online teaching in term three of 2019-20, or some hybrid teaching arrangement for 2020-21. Moreover, it will take some time for any such claims, whether as a class-action or a one-off test case, to grind through the County Court, the Court of Appeal, and even reach the UKSC as noted above.

Note: David Palfreyman as a Member of the OfS Board is not here representing or purporting to be expressing any OfS policy or thinking.

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