AUA Annual Conference 2016 – Students as Consumers

How has the HE landscape changed post the CMA?

Key contacts: Karen Stephenson

Position: Partner, Education 0207 822 7178

karen.stepheonson@weightmans.com

Jo Farrington Position: Solicitor, Education

0207 822 0836 Jo.farrington@weightmans.com

05 April 2016

Disclaimer

We are not providing you with legal advice today and these notes should only be used as an aide memoire. If you have any concerns or questions regarding compliance (or otherwise) with the relevant legislation please do seek your own independent legal advice.

Please note: We were originally planning for a smaller group of 30 delegates which would have lent more itself more easily to discussion – however we found ourselves oversubscribed with 100 very welcome delegates! We have some practical questions at the end of this presentation and will make every effort to talk them through with you. Questions are welcome and we will be around for a while at the end for further discussion if anyone wishes.

Importance of compliance

▪ Compliance with the legislation is important, not only for protecting students but also for maintaining student confidence and the reputation of your institution.

▪ As such, institutions must ensure that:

▪ students are given clear, accurate and timely information;

▪ standard terms, conditions, pre-contractual information and marketing practices are all compliant to avoid liability risks;

▪ ensure that your complaints process is accessible, transparent and fair;

▪ be aware of the new consequences of a failure to comply.

Compliance - Discussion

▪What have been the most challenging aspects for your institution?

Relevant Consumer Rights Legislation

▪ Consumer Rights Act 2015 (“CRA”)

▪ Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (“CPR”)

▪ Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (“CCR”)

▪ Provision of Services Regulations 2009 (SI 2009/2999) (“PSR”)

▪ Green Paper: This theme is carried through into the new Green Paper

published 6 November 2015: “Fulfilling our Potential: Teaching Excellence, Social Mobility and Student Choice”

▪ “ambitious proposals to put students at the heart of higher education”

▪ new Office for Students

Consumer Rights Act 2015, s.2:

Consumer:

“an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”

Trader:

“a person acting for purposes relating to that person’s trade, business, craft or profession”

Competition and Markets Authority (CMA)

▪ HE providers are acting for purposes relating to their trade, business or profession when providing educational services and will be a “trader” or “seller or supplier” for the purposes of consumer protection legislation.

▪ Undergraduate students will generally be acting for purposes outside their trade, business or profession and therefore will be “consumers”.

Case law examples

▪ Clark-v-University of Lincolnshire and Humberside [2000] EWCA Civ 129

▪ His Honour Judge Charles Harris QC, in the case of Buckingham and others v Rycotewood (re damages 28/2/2003)

▪ In Abramova-v-Oxford Institute of Legal Practice [2011] ELR 385

Consumer Rights Act 2015 (CRA): ▪ Three contract types: Goods, Services and

Digital content (latter two most relevant for HE sector)

▪ Statutory rights (implied terms of satisfactory quality)

▪ Remedies

▪ Unfair contract terms and notices

▪ Enforcement

Consumer Protection from Unfair Trading Regulations 2008 (CPR):

▪ Prohibition of unfair commercial practices is the General Obligation. Specific obligations prohibiting:

▪ Misleading actions

▪ Misleading omissions

▪ Aggressive practices

▪ ‘'Blacklisted’ practices

▪ Offences

▪ Enforcement

▪ Consumers’ rights to redress

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR):

▪ Provision of information

▪ Right to cancel

▪ Additional payments and help-line charges

▪ Delivery and risk

▪ Offences

▪ Enforcement

Provision of Services Regulations 2009 (so far as relevant) (PSR):

▪ Provision of information

▪ Responding to complaints

Underlying principles ▪ “Fairness” and “good faith” and “fair and open dealing” are central to

consumer protection.

▪ The focus of the legislation is

▪ Provision of information

▪ Terms and conditions

▪ Complaint handling processes and practices

▪ All in the context of:

▪ Provision of information to prospective students

▪ Provision of educational services

▪ Provision of accommodation

▪ Provision of other support to students

Failure to comply with the CRA may result in:

▪ Wasted time in dealing with issues and queries

▪ Pay-outs to students

▪ Legal costs

▪ Court costs

▪ Fines

▪ Negative publicity

Response - discussion

▪ How has your institution responded to the CMA?

▪ What steps has your institution taken to implement the CMA’s guidance and associated legislation?

Steps that institutions in the sector have generally undertaken to ensure compliance with the new law

▪ Conducted an audit

▪ Make the relevant changes

▪ Staff training

Complaints - Discussion

▪ What impact (if any) have you seen post-CMA on the number and content of student complaints?

How does the CRA apply to complaint handling?

▪ In addition to the above CRA provisions, s.89 of the CRA

extends the scope of the Student Complaints Scheme (operated by the OIA) to many additional types of HE providers and their students in England and Wales.

▪ The Student Complaints Scheme (OIA) now applies to:

▪ institutions which provide higher education courses and are designated for the purposes of student support; and

▪ institutions which have been granted degree awarding powers. This will include many further education colleges, sixth form colleges and other providers of higher

education courses.

Claims/Enforcement ▪ Possible Claims

▪ failure to obtain a qualification

▪ failure to obtain a higher class/grade

▪ Damages

▪ repeat time/repeat fees

▪ difference in pay

▪ psychological damage –loss of years/loss of career

▪ What could give rise to a claim?

▪ Provision of Teaching

▪ Examination process and procedures

▪ Disciplinary processes or complaints processes

▪ Administration

Enforcement by the student: ▪ CRA:

▪ an unfair term is not binding (section 62)

▪ where service does not conform with the contract, consumer has right to repeat performance, in default of which to a reduction in price (sections 55-56)

▪ CPA ▪ Right to redress only in the case of misleading or aggressive practices -no

right to redress in the case of misleading omissions or other unfair commercial practices

▪ Redress includes right to unwind contract, right to a discount and right to damages

▪ Query extent to which OIA would investigate any allegations of breach or make any findings on such allegations

▪ CCR: ▪ Contracts covered by the regulations are deemed to include a term that the

trader has complied with regulations 9-14 and 16 (main requirements)

Enforcement by the CMA

▪ CRA, CPR and CCR all enforceable by CMA

▪ Governed by Part 8 of the Enterprise Act 2002

▪ Can apply for civil enforcement orders and bring criminal prosecutions

“Guidance on the CMA’s approach to use of its consumer powers” (March 2014)

Sector attitude ▪ Independent legal advice

▪ Partner Colleges: encourage to seek independent legal advice and confirm compliance – contractual enforcement required

▪ O/S partners: encourage to seek independent legal advice and to provide copies to the University and confirm compliance

▪ Many institutions are struggling with staff who are reluctant to accept the concept of student as consumer

▪ Quite different approaches across the sector as to the meaning of “durable medium”

▪ Which report(s)

▪ CMA – has and will continue to undertake web site reviews

▪ CMA – will take student and third party complaints into account

▪ Each allegation of breach of contract will turn on its own facts and we won’t know the attitude of either the CMA or the courts until we start to see complaints filtering through

▪ Continuous ongoing process to ensure compliance

CMA - Discussion

▪ Do you think that the CMA involvement in the sector has been helpful?

▪ What developments do you think there will be in the future?

Questions for discussion

▪ How do we prove that a student has received the relevant information?

▪ When does the course handbook need to be provided to applicants?

▪ Can we provide a draft handbook now and an ‘updated’ final version later?

▪ How do periodic course reviews or external validations sit with the legislation/CMA Guidance?

▪ What costs information should be provided?

▪ Timetables – do we need to provide these to students at the offer stage (2nd stage) or the confirmation of contract stage (3rd stage)?

▪ How does the legislation/guidance apply to employer sponsored students?

▪ what does ‘durable medium’ mean?

▪ What do we do about deferring students?

▪ What if we have not told students they have a 14 day cooling off period – what are the potential consequences?

Thank you all very much

Questions?