They’re interesting for all sorts of reasons, not least because it’s still so difficult to discern what students’ rights are in this area – something OfS CEO Nicola Dandridge accepted was a major problem at our Secret Life of Students Event.
There is a dedicated regulator, of course. Slowly but surely the Competition and Markets authority is working its way around large consumer sectors in the UK to offer detailed analysis and advice on the way the pandemic has impacted consumers.
So far it has prioritised four sectors for investigation – weddings and private events, holiday accommodation, nurseries and childcare provision and package holidays.
You’d have thought that by now the CMA taskforce might have turned its attention to students – there’s about 250k marriages in the UK every year, but add in new and graduating students since March, even if we slice out “free education” students in Scotland we’re looking at well over 3m fee paying “consumers” who need some clarity on their rights. Alas not.
We’ve previously looked in detail on the site at the Office for Students’ efforts in this area, and we’ve looked at some of the CMA’s own stuff – there was this on nurseries and childcare provision, for example.
Now CMA has published a dedicated guidance note on weddings. The question is whether any of the aspects of that note might apply to higher education?
There are two big, related but ultimately separate issues that hang over from March, April and May, for example. The first is could universities make unilateral changes, and the second is whether students should have paid full price.
It’s probably fair to summarise the first issue legally as “yes”, as long as a “Force Majeure” clause was present and appropriately worded in the contract. There’s a different debate for a different blog on whether the “Force Majeure” event is still going on.
But that’s not the only question. Students have been arguing that various (principally physical) services and facilities were not supplied, and the question there is that even if a provider could unilaterally make changes, whether a student should get a partial refund for services not supplied.
After all, back in the summer, CMA said:
Sometimes, a consumer will already have received some of the services they have paid for in advance. In those cases, the CMA considers that the consumer would normally be entitled to at least a refund for the services that are not provided.”
What we’re getting at here is aspects of the service that universities didn’t or couldn’t move online – in the main, physical facilities. And various aspects of this new weddings advice potentially clarify things.
First, on (partial) refunds the sector sometimes says “all we’ve promised in the contract is the course”, but CMA would definitely say that all the aspects “sold” to a student would count. If you’re taking lovely pictures of things for the prospectus or taking students on a tour of them, you’re not presumably doing that on a whim. You think they’re “material”.
Sometimes the sector says “well we’ve already shelled out for X or Y”. CMA says here that a business can deduct some of its costs from a refund either for services or products which it has already provided, and a limited contribution to other costs incurred by the business which have a sufficiently direct connection with the contract in question.
As such CMA says for a wedding, you could include costs like buying food or flowers (or other perishable items) for a specific wedding, because you couldn’t re-use them for another wedding and a fair proportion of the business’s overhead expenses might relate closely to the cancelled wedding. That split is worth considering in a university context.
There are some costs which, in the CMA’s view, a court would not ordinarily allow a business to retain when refunding consumers – including costs which produce ongoing and re-usable benefits for the business, such as general refurbishment costs for the venue and fixed costs of doing business like depreciation or rental payments, general staff costs, general IT system costs and other general business costs like utilities costs, bank charges and business rates.
Again, once you have put a value on the aspects that couldn’t move online, that split between costs would be interesting to apply in a university context when “valuing” a partial refund.
Separately CMA has stuff to say on variation clauses that applies here. Such terms, it says, are likely to be unfair (and unenforceable) unless they give the consumer the right to a pro-rata price reduction if they accept the change, with interesting implications for continuing students and those who’d already accepted offers before changes were made.
It also says that terms are likely to be unfair (and unenforceable) unless they only allow the business to change what it agrees to provide in a narrow range of specified circumstances that are genuinely outside its control such as changes in the law. Universities in March, all summer and right now are right now making decisions that they would have to prove rob them of control over providing services.
If you’re thinking about going further than the current “Tier” voluntarily for example, could this present a legal problem? Are you sure that changes beyond legal minimums (ie restricting seating capacity in a Library or cancelling all non-essential F2F without a mandate from Public Health) would be legal in this context? And even if there is a mandate – courts tend to want things to have become impossible (“what, were there no Cinemas you could have hired for extra space”) rather than just really very tricky or expensive.
As ever, I’m not suggesting that if students have better rights here than governments have suggested that universities should pay up from existing budgets. But we do need to know what students’ legal rights actually are.