Are universities allowed to limit liability over strikes or not?

Where students call for partial refunds on tuition fees over this year’s industrial action, they are almost always blanket-denied.

Jim is an Associate Editor at Wonkhe

Some might get the odd “goodwill payment”, especially if they submit a complaint (and subsequent appeal when knocked back) – but even then it tends to be recognition of distress and inconvenience rather than the actual failure to deliver some component or other of the service.

This is usually because their provider has a contractual term that limits or excludes said provider from liability in the event of industrial action.

For example, one university says in its industrial action FAQs:

The University, in line with its terms and conditions, will not be offering tuition fee refunds.

Its Ts and C’s say (my bolding):

The University will not be liable to you for any failure to carry out, or delay in carrying out, any of our obligations under the Contract where that delay or failure is caused by events beyond the University’s reasonable control including acts of God, war, terrorism, cyber-attacks, industrial disputes (including disputes involving the University’s employees), fire, adverse weather, pandemics, epidemics or disruption resulting from pandemics or epidemics, and national emergencies. In such circumstances, the University will take reasonable and proportionate steps to minimise any adverse impact on you.

Another says:

Given the actions we are taking to minimise disruption, any circumstances giving rise to a right to financial compensation are unlikely to arise.

Its Ts and Cs say:

If as a consequence of circumstances beyond the reasonable control of the University, it is necessary to make significant changes to your Programme after your acceptance of an offer, the University will tell you about these at the earliest opportunity. Such changes may occur either before or after your Registration, but the University will take account of the reasonable expectations of any student affected by the change. Examples of such circumstances include…

(b) industrial action by University staff or third parties… to the full extent that is possible under the general law the University excludes liability for any loss and/or damage suffered by any applicant or student as a result of those circumstances.

Another, in a section marked “Will I be able to claim for a refund on my course fees?”, says:

We are taking steps to minimise disruption throughout the industrial action. There will be continued learning opportunities, facilities and support during this period, and throughout students’ time at —. This means the University will not be issuing refunds.

Its Ts and Cs state:

The University will not be in breach of its obligations under its contract with you, nor liable to you for any loss caused to you under its contract with you which results from events which are beyond the University’s reasonable control, such as: a pandemic (including Covid-19), an epidemic or a local health emergency necessitating measures to reduce risk of infection or illness; industrial action; acts of God; acts of terrorism; government order or law; action by any governmental authority; the unanticipated departure or absence of key members of University staff; or failure or delay by third party suppliers and subcontractors.

May the majeure be with you

The generally accepted position on these “force majeure” clauses is that even if a service provider was to rely on them, there’s still a general duty to reduce, minimise and mitigate disruption. The Competition and Markets Authority’s updated advice says:

Such terms should not enable the HE provider to refuse redress where it is at fault, for example in not taking reasonable steps to prevent or minimise problems.

But regardless of mitigations, can a provider actually rely on them at all in the event of industrial action? The Competition and Markets Authority’s updated advice couldn’t be clearer:

Terms limiting liability are more likely to be regarded as fair where they are restricted in scope to problems unavoidably caused by factors beyond the trader’s control. The relevant circumstances should be clearly and specifically described, and in the CMA’s view there should be no listing of matters that could be within the trader’s control – for example industrial disputes with the trader’s own employees.”

The problem is that I’ve spent several train journeys over the past few weeks trying to find a provider that doesn’t have a term that limits liability in the event of industrial action. I’ve failed to find one.

On one level we might assume that providers are arguing that the dispute and resolution of it is genuinely outside of their control. Plenty have statements that remind readers of FAQs things like this:

This is a national dispute involving 144 employers, including many other universities and higher education institutions. The University of — cannot act independently to resolve this dispute.

Or like this:

The national dispute on UCU’s claim for pay and working conditions for university staff, which is still ongoing, covers more than 140 institutions. The University… Executive Board and … UCU (xUCU) agree the time, energy, and effort going into a stalemate is not beneficial for our community and we have jointly strongly encouraged the national UCU and UCEA to re-engage to address the areas that we are working on locally, as detailed in our progress update on the January 2023 joint statement.”

Or like this:

The strike action is a national issue, and not one that can be resolved within or by the University. The University cannot negotiate at a local level on pay. The pay dispute has reached an impasse with UCU and UCEA unable to reach agreement following ACAS involvement.”

The problem with all of the above statements is that Queen’s University Belfast appears to have been perfectly able to resolve the dispute with its staff. But the bigger question is whether CMA, as the regulatory body, accepts that industrial action being listed as a reason to limit liability is OK when there’s a national dispute on.

Students might reasonably ask why on earth it doesn’t say so in its guidance, or hasn’t said so since the dispute intensified. It’s hardly a minor issue. If it’s OK to have in there, students need to know. And if it’s not OK, then pretty much all 140 universities with such a clause need to stop, surely?

Part of the problem here is that collective bargaining frames universities as fee-free public services. But fees and autonomy and consumer protection complicates all of that.

Maybe it’s the case that universities have legal advice saying it’s OK to be in there that disagrees with CMA’s interpretation of the law. But in that case we surely need a legal battle to commence that settles it, rather than students being given contradictory messages.

Turn and face the strange

Let’s take a different example. Plenty of universities have been, or are doubtless intending to, reduce the staff complement in a department that has, perhaps, under recruited – substantially reducing optional module choice as a result.

These are becoming more and more common. They’re not course closures per se, but reductions in staff teams and associated dedicated discreet pathways/optional modules. Sometimes it’s done via recruitment freezes.

The CMA guidance does effectively raise concerns at what has started to become established practice – to depend in the Ts and Cs on delivering the “core” modules.

The odd optional module, as long as a reasonable variation clause is in, may not run or be changed. But taking an optional module catalogue from 60 to 20 during a degree without express consent clearly represents a breach of contract.

Similarly merging three or four specialist pathways into one with the option to still “study” the specialisms supervised by a generic staff team would also be a problem.

But again, almost all universities have clauses that suggest the opposite in terms of the way they define minor, substantial or major changes (requiring individual consent) and minor changes.

One says (my bolding):

We may from time to time need to make minor changes to the Programme or these Terms and Conditions (including the documents referred to in these Terms and Conditions). Examples of minor changes include (but are not limited to) reasonable changes to the Programme timetable, number of classes/lectures or other teaching activities, how IT or library or other services are provided to you, the methods by which the Programme is delivered or assessed, the content modules or syllabus of the Programme, the location from which the Programme is delivered, procedural changes, changes to regulations, codes of practice, policies and procedures.”

Another says:

Material changes: These are changes that represent a major amendment to the Programme and could include changes to a substantial part (at least a third) of the Programme’s intended learning outcomes, the level or award or title of the Programme, the credit value of the Programme, a change to the Third Party Provider described in Appendix 4 of these Terms and any Minor Changes that are intended to take effect midway through an academic year.

And another says:

The University will not normally make a material change to your course without consulting you. A significant change is: (a) a change of award title; (b) a change to the availability of or discontinuance of a core module; (c) a change to the type of assessment for your course.”

Most universities then say that if you don’t consent to the changes, you can leave! A typical example is:

If you did not consent to the changes and remain dissatisfied with them, you will be offered the opportunity to withdraw from the course.

But CMA says:

It is vital that the student is given … a genuine right to cancel and switch HE providers if changes are made – rather than being locked into a contract that they cannot get out of without penalty. In these circumstances, the right to cancel must be real and capable of being exercised in practice. In the HE sector, switching course or, in some cases, withdrawing and switching HE provider, is likely to be difficult or impractical in practice, bearing in mind that in many cases the student will not be able simply to transfer their credits to another HE provider, and so saying the student can switch may not improve matters for them, or alleviate the potential unfairness of a variation.

So if a university is still looking to deliver that staff redundancy round and its Ts and Cs are unlawful, it has three choices.

Option one would be to go better than the Ts and Cs and to fully “teach out” the breadth/size/shape of the course as originally offered. That would be hard, but arguably it’s what the student has the right to.

Another is to go better than the Ts and Cs, treat what they frame as a minor change as a substantial change and seek individual consent, allowing the student to switch/leave if they don’t agree.

If they don’t consent, I don’t think switching/leaving that’s a realistic choice for most students – especially when CMA is also pouring scorn on the idea that each academic year is a separate contract with different Ts and Cs.

Option three is do it anyway having consulted with student reps, hope nobody complains but set aside cash in the restructure for compensation to keep actual complaints away from the Office of the Independent Adjudicator (OIAHE) or the SPSO, the CMA or the courts.

My sense is that most universities will choose Option 3.

I also sense that students making complaints under Option 3 or making complaints about industrial action have a good case. The problem is most don’t know their rights, and don’t have the energy or confidence to pursue a complaint if they do.

Cold cases

If we think about consumer protection regulation, in the main CMA and trading standards wouldn’t really look in detail at the detail, they’d look at redress rights – but the lack of engagement from CMA or enforcement over what on the face of it look like problematic contracts is breathtaking.

But the other question is who or what could cause universities to not pursue Option 2 or 3, but instead choose Option 1? What would cause a university to giver proper, partial refunds for partial performance? And what would cause it to amend its Ts and Cs to make them lawful?

That surely is what higher education regulation is for.

In England the law gives OfS a role in ensuring consumer protection law is paid attention to, and a direct role in student protection issues – the former doesn’t seem to be happening, and while my second example is more subtle than a “course closure”, both sorts of circumstances I describe are a kind of threat to the continuation of study for a student.

That suggests a need to address previous commitments on student contracts, and reform to the Student Protection Plan system. But contracts never seem to get better, and we’re not heard a peep from OfS on SPPs for several years now.

I’m not by the way advocating redundancy rounds. I want a better funding system. But right now as more market chaos ensues, OfS does have a duty to protect students’ interests when the “market” does its thing.

It, along with the CMA, is failing even in that limited duty – and it’s students that suffer.

7 responses to “Are universities allowed to limit liability over strikes or not?

    1. Because the point is that the problem issues are near universal and systemic, not about a particular provider or another

  1. Because it would be unfair to single out one example when this applies to virtually all of them.

    I know that we were forbidden from making refunds. However, the distress and inconvenience payments we set out were basically refunds, just not badged as such. Seems to have worked; no OIA issues with the very few cases about this that have reached them about either the pandemic or industrial action.

  2. So far 2 Us have offered £500 a time to Ss whose degree grades are being delayed.

    Expect most/all to have to do the same? – unless really willing to try and defend a fm exclusion/limitation clause when clearly some Us have exercised enough control somehow to get the marking done and when the CMA has cast doubt on an fm clause as being an ‘unfair term’ under CRA15 if it purports to cover industrial action.

    The £500 still leaves scope for an S to claim for further damages arising from U’s breach of contract and of the CRA15 requirement for timely delivery of the teaching & assessment ‘service’ if the S loses, say, a job offer or if an international S faces costs relating to visa extension. It should not, therefore, be accepted by Ss as a full & final settlement when in fact they do not know how long the delay will be and what consequences/losses may yet emerge.

    But it is at least honourable that these Us are offering something as automatic rather than obliging their aggrieved customers to have to lodge internal complaints and then even to have to go off to the OIA.

  3. I think it’s also possible that wealthy parents are telling their children they’ll cover the costs of HE and then the child/student is borrowing the Maintenance Loan without telling their parents to get extra cash. And there are probably a small number of enterprising students who are lucky enough not to need it but borrow the Maintenance Loan to invest it, hoping to get a higher return than it costs to borrow (e.g. students can fall for ‘get rich quick’ schemes such as cryptocurrencies) – again, they might not be telling their parents!

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