There is much in the media about students seeking a partial refund of tuition fees where UCU strike action has denied them delivery of teaching. There’s also some suggestion that universities might try to argue that such partial non–delivery is beyond their control and covered by a force majeure clause implied into the student– university contract– to– educate. But what’s the technical and legal position exactly?
Wither the contract?
Egregiously, most students “buying” (for example) undergraduate degree courses at £27,000 – £36,000 have no detailed contract to which they can refer. Hence the courts would need to imply fair terms in line with the Consumer Rights Act 2015 (CRA15).
This lack of a standardised student – university contract (covering teaching and also assessment/examining) needs urgently addressing by the higher education sector as a matter of self-regulation: or, failing that, by OfS as the new regulator acting (as its name implies) “for” students.
It is clear that the contractual relationship between the student and the university is a business-to-consumer (B2C) contract under the Consumer Rights Act – where indeed, in the language of the act, the university is a “trader”.
Meanwhile, it may need a High Court case – perhaps by way of (almost literally) a class action at a particular university – to establish case law as to whether universities can invoke such a clause or have to pay compensation for what is only partial delivery.
Such a case would also helpfully clarify how such compensation is to be calculated as a refund for services not delivered, plus possibly any damages for distress and hassle along with potential damages for losses caused by delays to degree results that impact on employability.
It just might be a fairly simple case in that arguably under CRA15 the student has a new statutory right to require a “price reduction” of an “appropriate amount” where the “trader” fails to deliver part or all of a “service” – and the trader is unable in the B2C contract to require the consumer to contract out of such CRA rights.
How does the Consumer Rights Act 2015 impact upon the student– university contract?
Under CRA15 the student-university relationship is simply a B2C contract, the university is a “trader” providing a “service” (teaching and assessment/examining) that is to be delivered “with reasonable care and skill” and “within a reasonable time” to the student who in return can be asked to pay “a reasonable price”.
If the university fails to deliver a service in conformity with the contract, the student has a new “statutory right” that is “the right to a price reduction” – and similarly if the delivery of the service is delayed beyond a reasonable time. And the student can use CRA15 to call for “a right to require the trader to perform the service again” and to do so “within a reasonable time” as well as “without significant inconvenience to the consumer”.
The student can, however, still pursue “other remedies” which may include “claiming damages”, “seeking specific performance”, “exercising a right to treat the contract as at an end”. In effect, CRA15 does not prevent the consumer utilising rights under general contract law within the common law.
The “right to a price reduction” includes a reduction “by an appropriate amount” – which may be by way of “a refund” which the university/trader must give “without undue delay”.
But how would “an appropriate amount” be calculated? In theory, that calculation and amount are agreed between the student(s) and the university, with the university not proceeding too slowly. The students(s) will probably claim that, say, 15% of lectures have been lost, and hence 15% of the £9,250 tuition fee needs to be refunded; the university is unlikely to agree.
So, off to the court to apply CRA15?
But how might student S enforce their statutory rights against the university?
Step one is to raise them with the university. If a student gets nowhere via the university’s complaints processes, they could take the matter to the OIA which might, eventually, adjudicate in favour of them.
Or the student could go to the local trading standards department for the university. After trying a direct “appropriate consultation” with the “trader” and failing to agree that the university will give an “undertaking” to cease infringement of CRA15, trading standards could seek from the court an “enforcement order” as a “public enforcer” under Part 8 of the Enterprise Act 2002. Such an order would aim at stopping the infringement, with (at the court’s discretion) financial penalties upon the university for not complying with due expediency.
And the Consumers’ Association is a “designated enforcer” – so the student could also ask Which? to step in, and it, in turn, could approach the university and then the court as above. Indeed it may do so of its own accord to gather consumer complaints, given its strong interest in the student-university contract, tuition fees and value for money.
But a specific university would have to be targeted. Which? may take a more nationwide view of any seeming harm to the “collective interests of consumers” (students as the public “buying” the HE service) – whereas local trading standards take, by definition, a local perspective.
If it is a nationwide test – a case or action brought by, say, Which?, then the relevant court is either the County Court in the area of the university or the High Court (Chancery division).
The defendant is likely to be the vice chancellor along with the university as the body corporate. It is not necessary for individual students to give evidence; those bringing the case can simply refer to consumer complaints. Any enforcement order made by the court could specify how compensation due under CRA15 to the student should be calculated.
The court can order the trader to publicise the order. And ignoring of the order would be contempt of court – the university is fined, and the vice chancellor goes to jail.
For further reading, try Palfreyman & Tapper Reshaping the University: The Rise of the Regulated Market in Higher Education and Palfreyman & Temple Universities and Colleges: A Very Short Introduction.
18 responses to “Unpicking strikes, tuition fees, and (possible) refunds”
Presumably if a UK/EU undergraduate were refunded, the refund would actually go to the Student Loans Company and all the student would see would be a slightly earlier date for paying off their loan a few decades hence – that is, if it weren’t written off first?
How would this “contract” work in relation to student non-attendance / non-engagement with their studies? Student attendance at lectures is worsening and those that do attend show little engagement with the topic at hand, preferring to hide behind a laptop.
Unsurprisingly I agree with David’s analysis. I would add that some universities retain pretty well verbatim the disclaimer of liability clause in respect of industrial action first introduced in the institutions recruiting through the former PCAS. I remember writing about that at the time, querying whether it was ‘fair’ according to the then legislation on consumer contracts. You have to drill down into the small print of the prospectus, but it is worth doing if you are a potential or current student. See for example – and this was honestly a random check – page 98 of 98 in the current 2018 ug prospectus for the University of East Anglia. It is not an absolute disclaimer, as the University notes that it will make every effort to maintain services, but It is followed by a clear condition that it is not liable for any financial loss.
I agree with Tom there is a question about how the compensation might find its way back to U.K./EU undergraduates but no problem where the student is a self-funded postgraduate or overseas student.
There’s a Public Accounts Committee session on the higher education market at 1630 today, live on Parliament.tv.
Hi Dennis I note your point about the disclaimer, but from what I understand (I should stress I am not a lawyer) – a disclaimer only works if it is clear and pointed out, it could be considered an unfair, or unreasonable term. Only a court can say some one is not liable for financial loss, Universities tried this with student charters, and this was something that the CMA noted was not fair. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/411392/HE_providers_60ss.pdf
That’s irrelevant – what the service consumer does with the service they are provided is their business. They can take it and wipe their arse with it if they want – that doesn’t exonerate the service provider from providing the service in the first place when they’ve been paid for said service.
My comment (Mar 12 2018 at 11:38) was in response to Eric York’s comment on Mar 12 2018 at 8:53 am – thought that there’d be a link to that or some kind of indication to that effect when posting.
There’s an interesting potential conflict here between the OIA and local trading standards and it will be interesting to see how this plays out. If trading standards ends up being the main focus of redress then does the OIA’s position become redundant and the sector move more into a direct relationship with consumer groups? I would imagine that trading standards would surely encourage students to go through the OIA first?
I’m grateful to David for spelling out the legal questions so clearly, but maybe the law (and the wider regulatory framework) just isn’t fit for purpose here.
Education is not just like any other service as it is a *relationship* between two parties, not a service provided by one and received by the other. In other words, it’s something you do, not something you get.
Sure, a university can fail to support that education (by, for example, failing to provide teachers because of strike action) and a student may expect and have a right to compensation for that failure, but this needs to be distinguished from another relevant story in the media today – a graduate who has filed a suit against Anglia Ruskin Uni for giving her a ‘Mickey Mouse’ degree. Even if one accepts that the degree she has obtained isn’t valuable (which is surely contentious), she had a responsibility to find out more about it and to get from it what she could through her own active engagement.
Ironically, it sounds like she did engage actively, given that she attended lectures and got a first. Part of her complaint though is that a lecturer told students to “self-study”. Obviously, I don’t know the circumstances, but if she expected to be spoon-fed her learning, then her complaint may be more properly addressed against the nature of higher education than against her course.
Any system of compensation for HE needs to take account not only of what the uni failed to do for the student, but what the student failed to do for themselves.
The Government has a role here in protecting students by ensuring their expectations are realistic and they are well informed. Branding institutions and subjects as ‘gold’ is doing exactly the opposite.
Nobody knows – doubt the ‘contract’ between the S and the SLC allows for the situation of possible refunds from the U in the event of strike action, as opposed, say, to where the S withdraws part way through the year. DP
Any such contract would carefully set out the expectations of and obligations upon the S – like gym membership, some personal effort is needed to see an effect and simply turning up to stand by the machines seems not to work! See my Paper on ‘The TEF 2020’ for such possible wording – at the Occasional Papers page of the OxCHEPS website. DP
Relieved my co-author of ‘The Law of Higher Education’ (OUP, 2012) agree with me!
Indeed – the CRA15 incorporates the old law re Unfair Terms in Consumer Contracts, so any disclaimer or force majuro clause the U pointed to would be tested by the court against that section of the CRA.
Correct, even if not expressed in language suitable for litigation in court!
Suppose the TS could, as broadly now do the courts – in the way that they expect all litigants to be open to genuine attempts at mediation. But TS has a statutory duty to receive the complaint from the S(s) so not sure TS could just duck the issue. And anyway the OIA is as much in need of High Court case-law guidance on interpreting the application of contract law principles of calculating compensation/damages under the S-U contract as everybody else. DP
Agree – the contractual relationship between S and C is unusually long, complicated, and inter-active. But it remains a ‘simple’ B2C contract for services and ‘the HE industry’ needs to get its collective act together to clarify and standardise the contract relating to a service that the punter is paying £27-36k for at UG level. DP
Sorry – to clarify, my above replies are in order of the postings above them! Unfamiliar with the way the Wonk system works! DP
Presumably tuition fees include the provision not only of the lectures, but also of the lecture halls, library, campus facilities etc. Even if it comes to pass that compensation is due for non-provision of lectures, it will never get to the level of 15% of fees for 15% of lectures. If HE providers are forced to provide an itemised list of what the fees are “paying” for, expect the “value” of lectures to be measured in pennies per hour per student.
I did some “mystery shopping” this week. I emailed Trading Standards, who said they don’t/won’t deal with me and referred me to the local CAB who front out interaction with the public on their behalf.
CAB came back to me today and said “It is unlikely that the contract would be deemed as a Business to Consumer contract, as it is likely that the qualifications being earned will be used to gain future employment for monetary gain; therefore it is unlikely the Consumer Rights Act would apply”.
I have sent therm CMA’s briefing- but as I’ve said before, what a mess. Students really do need the various “grown ups” at least to understand the law…