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The rights of students as consumers - a brief reminder of the implications of the 2023 CMA advice update for HE Institutions

on Wednesday, 14 February 2024.

2023 brought significant changes to the rights of students in higher education.

After a protracted parliamentary journey, new legislation has built on existing laws relating to freedom of speech and academic freedom and given the Office for Students a wider regulatory remit.

Litigation has considered standards of fairness in student disciplinary proceedings and the responsibilities of providers investigating allegations that may constitute criminal offences. Calls for a statutory duty of care for students have been resisted and the High Court has since declined to clarify the parameters of the student-provider relationship. There is also the spectre of the group litigation against higher education providers for alleged breaches of contract following the disruptive effects of strike action and the pandemic being resumed after an eight month stay.

Given these developments, many institutions will naturally be reflecting on the terms of their student contract, regulations and procedures. As the full implications of the statutory and common law changes outlined above are not yet known, we set out below a brief reminder of the effects of the Competition and Markets Authority's recent update to its consumer law advice for UK HEIs.

The updated advice, which was published last May, is more detailed than the 2015 version it replaces in some key areas, commenting on practices adopted by providers during the Covid-19 pandemic, as well as referencing additional obligations on providers and changes to existing ones. However, focus was maintained on the same three areas: the information provided to prospective students, terms and conditions and complaints procedures.

Information provided to prospective students

Further to arrangements made by individual providers during the pandemic, students now generally expect courses to be delivered in person, online or through a mix of blended learning. The CMA considered this and advises providers to inform prospective students how their course will be delivered at the earliest stage.

If any changes to course content or delivery arise before the contract, the CMA states that providers must bring the likelihood and scope for such changes to the attention of prospective students "at the earliest opportunity". Failure to do so could be considered a misleading omission. The CMA indicates that all information provided must be accurate as it may become a term of the contract and bind the provider. The advice explicitly states that the provider cannot contract out of the accuracy obligation and any attempt to do so will be unenforceable, particularly where such information is found on its website.

Where third parties are involved or delivering significant parts in a course, the provider must set out clearly which entity has responsibility for each part of the educational service.

The advice includes new paragraphs explaining what information should be provided for students looking to defer entry to the following year. Clear, transparent and accurate information on courses, including fees and other costs, should be given to prospective students before they apply or accept a deferred offer. Where the issue of deferral arises after an offer has been accepted, information should be given on any key matters that would be likely to influence the student’s decision whether to defer admission. This would include possible fee increases for the following year and significant elements of the course that the provider thinks may change during the deferral period.

The CMA opted to briefly expand on the stance taken in the 2015 version against HEIs issuing new contracts at re-enrolment, reiterating that students should not be given a new contract at the start of each year during re-enrolment and that the contract for educational services given at the first enrolment should be for the full duration of the course. The advice states that new contracts at re-enrolment may be interpreted as attempts to bypass requirements to obtain express consent to changes and vary the terms. As a result, re-enrolment contracts may breach consumer protection law.

Terms and conditions

The advice has slightly expanded on how terms should assist students' decision making. Students' contractual obligations must be clear, transparent and intelligible, particularly for policies concerning academic progress, withdrawal and refunds. Students should also be able to understand terms in a way that allows them to foresee and evaluate how they will be affected in the future, including probable changes and consequences.

The advice now states that exclusion clauses should not go further than is strictly necessary for the provider to achieve a legitimate aim, specifically where the provider provides something different to its contractual obligations or in cases of non-performance or sub-standard performance. Exclusion clauses which limit their scope to problems caused by factors beyond the provider's control are more likely to be regarded as fair. These circumstances should be clearly and specifically described and providers should not try to exclude factors that would normally be within their control, such as industrial disputes with their own employees.

The advice now specifically cautions against the use of "force majeure" style clauses as blanket terms to exclude liability. Similarly, legal jargon should be avoided (particularly if used without explanation) to keep terms transparent. Terms should not enable the provider to refuse redress where it is at fault, for example not taking reasonable steps to prevent or minimise problems.

The CMA expanded its view on the inclusion of terms which prevent students from progressing when they owe non-academic debts. These practices are open to challenge as being unfair and may also constitute aggressive commercial practices. The CMA states that: "a contract cannot be considered fair and balanced if it gives one party the power to impose disproportionately severe sanctions on the other". This is particularly prevalent where non-academic debts stem from a separate contract to the academic course, such as accommodation.

Complaints procedure

The advice is largely unchanged from the 2015 version, emphasising the importance of processes being transparent, clear, easily located and accessible. As many providers will now be reviewing their complaints arrangements in order to prepare for the full effects of the Higher Education (Freedom of Speech) Act 2023 and ensure they are fit for purpose, these principles remain relevant.

Although relatively limited, the 2023 CMA update is a useful reminder of what is required to ensure that providers' contractual terms are enforceable. Hopefully, similar clarity will emerge regarding the parameters of other key legal and regulatory obligations towards students.

For further information, a copy of the advice can be found here.

For more information, please contact Kris Robbetts in our Regulatory Compliance team on 07795 662 796, or complete the form below.