Who holds the whip hand? – Student protection plans

Higher Education’s new regulator, the Office for Students (OfS), published a number of conditions for institutions to join its Register of Approved Providers and one of the items of evidence required (for Condition C3) is a student protection plan.

Prior to the OfS, student protection plans were voluntary. The Higher Education and Research Act brought about the expectation that all providers would have a student protection plan in order to inform students what would happen in circumstances such as course, campus or even institution closure. They would also ensure that institutions identify the contingency plans they have in place for such eventualities.

The template provided by the OfS for a student protection plan is quite prescriptive and is arranged in four sections:

  1. An assessment of the range of risks to the continuation of study for your students, how those risks may differ based on your students’ needs, characteristics and circumstances, and the likelihood that those risks will crystallise.

  2. The measures that you have put in place to mitigate those risks that you consider to be reasonably likely to crystallise.

  3. Information about the policy you have in place to refund tuition fees and other relevant costs to your students and to provide compensation where necessary in the event that you are no longer able to preserve continuation of study.

  4. Information about how you will communicate with students about your student protection plan.

In this post I’m interested in section 3 and how institutions may go about determining their policies on refunds and compensation, which are now mandatory. At a recent Academic Registrars’ Council (ARC) Quality group meeting no institution represented admitted to having such specific policies in place at the present time, although it is important to say that there is likely to be provision for refunds in documents such as enrolment terms and conditions.

Although there is widespread opposition to the notion that students are consumers, from a contractual point of view their rights are protected under consumer protection law and this governs how policies on refunds and compensation will be formulated.

Student protection plans must be made publicly available and institutions are likely to be in somewhat of a quandary as to how detailed their policies should be.

In respect of when refunds and compensation may be required, there are a range of circumstances; from an institution ceasing to operate, to closure of a subject department, to being ‘no longer able to deliver material components of one or more courses’ (OfS, 2018, 15). The term ‘material components’ is not defined anywhere in the Regulatory framework, however. There is an obvious association with the term ‘material information’ used in the Competition & Markets Authority (CMA) Guidance; however, ‘material information’ is wide-ranging, ‘information that the average consumer needs’ (CMA, 2015, 24), such as course title, core modules and course costs, and it is inconceivable to recourse to refunds or compensation in the event of changes to such information. Instead, refunds or compensation would only apply in the event that ‘it is not possible to preserve continuation of study’ (OfS, 2018, 16), which suggests more significant issues.

Practice in other sectors

In any transaction where a good or service has been purchased there will be contractual terms regarding refunds and compensation. An example from the transport sector is passenger rights where trains are cancelled or delayed (National Rail ‘Passenger Rights to Rights & Compensation’). Typically there are a range of outcomes (e.g. a refund of 50% of the fare for delays over 60 minutes), which are based upon factors such as the severity of the delay, whether the issue was within the control of the rail industry and the status of the contract when formed (e.g. it may be specified that a cheaper fare purchased in advance is not refundable). I.e. the issuing of refunds or compensation is dependent on the terms and conditions set out when the contract is formed and there is scope for variability in setting these terms, as long as they are deemed to be reasonable.

In the airline industry, for example, the duration of delays when compensation may be available are typically longer. The policy on compensation operated by British Airways (link) includes the clause:

Compensation can be claimed where you are either:

1) Delayed at your final destination by more than three hours and that delay arises from causes within the carrier’s control (rather than extraordinary circumstances which could not have been avoided by all reasonable measures). …

This last line refers to clauses on ‘force majeure’ – unforeseeable circumstances that prevent a contract being fulfilled – and this is where some scope lies for defining what can reasonably be covered as outside of a goods or service-provider’s control.

A further example: – TalkTalk, the mobile network, has a policy that provides a full refund when the network is down, providing that you inform them of the fault and they cannot fix it within a specified timescale. A refund would not be available if, amongst other things:

  • The fault was caused by something outside TalkTalk’s control, e.g. network or atmospheric conditions

Redress or refund

The Consumer Rights Act 2015 states that if a service is not provided with reasonable care and skill or as agreed then you can ask for it to be provided again and if this is not possible then you should receive a discount.

The implication of the new student protection plans is that the onus is now being placed upon universities to set-out how they would determine any discounts (refunds or compensation) in respect of any circumstances where ‘it is not possible to preserve continuation of study’. It will not be possible to quote a force majeure clause in response to student claims for refunds where statements had been made in a published student protection plan about how a specific set of circumstances would be dealt with.

A shared baseline

The sector does not, yet, have any minimum refund or compensation requirements, such as those set out in the National Rail Conditions of Carriage for the rail industry, so it will be for individual institutions to determine the terms as appropriate to their circumstances, subject to the approval of the OfS. That the Universities Minister, Sam Gyimah, called recently for students to be compensated for the loss of lectures as a result of the recent UCU strike action illustrates the attention on student rights. A shift towards consistent terms may be around the corner.


References

Office for Students (OfS) (2018) Regulatory Advice 2: Registration of current providers for 2019-20. Available at: https://www.officeforstudents.org.uk/media/1049/ofs2018_04.pdf [Accessed 16 March 2018]

Competition & Markets Authority (CMA) (2015) Advice for higher education providers and undergraduate students – Information on your consumer law obligations/rights. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/428549/HE_providers_-_advice_on_consumer_protection_law.pdf [Accessed 16 March 2018]


 

 

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