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The Consumer Rights Act and Higher Education

The Consumer Rights Act and Higher Education

The recently enacted Consumer Rights Act 2015 concerns itself with the rights of UK consumers, including university students who have purchased a service (the provision of education) from UK universities. 

The relationship between students and universities involves elements of both private and public law, as determined by the Court of Appeal in Clark v University of Lincolnshire and Humberside [2000] 3 All ER 752. The Act compounds this hybrid relationship and recognises students’ rights as a matter of principle, but how helpful is the legislation in practical terms?

Sections relevant to students

Section 49(1) of the Act states that ‘every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill’.

What this means is that universities must respond to the kind of problems and issues that students may face, including poor supervision and guidance from tutors and course leaders; poor organisation of courses, modules, and assessments; and delays and poor service when dealing with complaints and appeals.

Section 50 of the Act states:

‘(1) Every contract to supply a service is to be treated as including as a term of the contract anything that is said or written to the consumer, by or on behalf of the trader, about the trader or the service, if—

(2) (a) it is taken into account by the consumer when deciding to enter into the contract, or

(b) it is taken into account by the consumer when making any decision about the service after entering into the contract.’

Therefore, when a student relies on information provided in university prospectuses or at presentations during open days and applies for a place at a university based on that information, and that information turns out to be false, this is – according to the Act – a potential breach of contract. This often occurs with the structure of courses, where certain modules or facilities are promised but then removed.

According to guidance provided by the Competition and Markets Authority, ‘Undergraduates: Your Rights Under Consumer Law’, and section 5 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, if a student is able to prove that a promise has been reneged upon, this could represent a breach of contract.

As higher education becomes ever more popular and expensive, students naturally have a greater expectation of the service they are paying for. In addition to the CMA advice, section 89 of the Act expands the requirement for higher education institutions to join the student complaints scheme. Therefore, not only are students becoming more alive to the issues that they may face at the hands of a university, there is more material available on these issues to assist them in challenging these issues. The Act therefore becomes ever more relevant.

Breaches of consumer rights

Section 54 of the Act states:

‘(3) If the service does not conform to the contract, the consumer’s rights (and the provisions about them and when they are available) are —

(a) the right to require repeat performance (see section 55);

(b) the right to a price reduction (see section 56)…

(6) This section and sections 55 and 56 do not prevent the consumer seeking other remedies for a breach of a term to which any of subsections (3) to (5) applies, instead of or in addition to a remedy referred to there (but not so as to recover twice for the same loss).

(7) Those other remedies include any of the following that is open to the consumer in the circumstances—

(a) claiming damages;

(b) seeking to recover money paid where the consideration for payment of the money has failed;

(c) seeking specific performance;

(d) seeking an order for specific implement;

(e) relying on the breach against a claim by the trader under the contract;

(f ) exercising a right to treat the contract as at an end.’

Although initially this seems like a helpful section of the legislation, one has to question how useful these remedies actually are when considering the high costs of litigation and the amount of time students would lose while their complaints are processed.

While section 55 of the Act covers the right to repeat performance of the service, which seems helpful at first glance, in reality the consequences for the student of any repeat performance can be quite drastic.

For example, a student completing a government-funded degree, usually in health services, requires a placement (sometimes funded by the placement provider) as part of the course. If a university breaches its contract by providing a substandard service, the student may ask for repeat performance. However, the practicalities of repeating the course mean that the student potentially incurs the following losses:

  • Loss of earnings for the year(s) during which the service/contract is being repeated;
  • „„Loss of government funding;
  • „„Loss of potential placement provider funding;
  • „Loss of opportunity, if the student had secured a position for future employment; and
  • Living costs.

It is therefore not difficult to see that section 55, while potentially helpful for most other consumers, is not particularly useful to students. Thankfully, section 55(2)(a) does provide some solace in this respect, requiring the ‘trader’ (in this case the university) to repeat the performance of the contract within a reasonable period of time and without inconvenience to the consumer.

In the above example, however, it could be argued that the health services student would not benefit from any repeated service even if it was completed within a reasonable time because of the above losses becoming engaged. Indeed, there is no definition as to what would constitute ‘reasonable’ in these circumstances, or who might decide what reasonable is.

In cases where the amount of time is deemed unreasonable, one would look instead to section 56 of the Act, which provides the consumer with a right to a price reduction:

‘ (1) The right to a price reduction is the right to require the trader to reduce the price to the consumer by an appropriate amount (including the right to receive a refund for anything already paid above the reduced amount).

(2) The amount of the reduction may, where appropriate, be the full amount of the price.

(3) A consumer who has that right and the right to require repeat performance is only entitled to a price reduction in one of these situations–

(a) because of section 55(3) the consumer cannot require repeat performance; or

(b) the consumer has required repeat performance, but the trader is in breach of the requirement of section 55(2)(a) to do it within a reasonable time and without significant inconvenience to the consumer.

Clearly, where the student consumer has not received the service they were owed under the contract, and repeat performance is not possible, receiving a full refund offers some compensation, but still it is not ideal for students who have paid for a university education in good faith and not received a degree for which they have worked hard.

If we return to our above example and apply section 56, the health services student is left with nothing but the list of potential losses, which suggests that this part of the Act has not been drafted specifically with student consumers in mind. They do not fit comfortably in this section.

Nothing in the Act, however, precludes the student from litigating against any loss, so while they may not have gained anything, the Act does not restrict any rights that the student previously had.

It is clear that the Act lacks practical application for the UK’s two and a quarter million student consumers. The government has attempted to take them into consideration, but has failed to realise that because the service they require shapes their entire lives, they are not like other consumers. It can also be argued that the only practical remedy available for disgruntled student consumers is litigation and the Act makes little difference to the previous position for students seeking a remedy for poor service.

Higher education institutions must therefore look to provide students with the best possible service, as they always should have done, adhering strictly to their obligations under the contracts they have entered into.

 

 

Originally published in Solicitors Journal Magazine - 18 October 2016



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