Education e-briefing - The Student Contract: “CMA” Implications of Suspension or Withdrawal of Programmes

• United Kingdom

• Education - Briefings

27-06-2017

Welcome to the eighth in our series of fortnightly Student Contract: ''CMA'' Implications ebriefs for universities, colleges and private providers. These ebriefs highlight aspects of the application of consumer law to the student contract which pose challenges for the tertiary education sector.

This time we focus on the implications of the suspension or withdrawal of programmes.

Strictly speaking, where an institution suspends or withdraws a programme of study which it has promised under a legally binding student contract to deliver to a student, the institution will be in breach of the student contract.

Even where the institution may have a genuine reason for looking to suspend or withdraw a programme, the Competition & Market Authority’s Guidance (please click here for the Guidance) states the CMA’s view that a term which affords a wide discretion to an institution to withdraw or cancel a programme in its entirety before it commences, for any reason, is likely to be unfair under the Consumer Rights Act 2015.

Where an institution is concerned that a programme may not run due to (for example) low enrolment numbers or lack of accreditation, it should include very clear statements in its pre-contract information and relevant sources, such as the prospectus, confirming (where relevant) precisely what the necessary enrolment numbers / accreditation status is for the programme, by what date this needs to be achieved, and details of the notice mechanisms and options available to students should the enrolment numbers / accreditation not be met together with the rights which students will have in those scenarios (e.g. a right for the student to terminate the student contract and receive a refund or apply for an alternative programme).

Such information should be provided to students in a very clear and prominent way, enabling the student to make an informed decision as to whether to apply to that institution or not.

This will assist the institution in demonstrating that it has acted fairly, as students will then be applying for the programmes in the full knowledge that there is a risk that such variations/suspensions/withdrawals of programmes may be made. This is also relevant bearing in mind that criminal sanctions may be applied under the Consumer Protection from Unfair Trading Regulations 2008 were the institution to be seen to be acting in a misleading manner.

There has been discussions about whether or not providing a student with a right to terminate the student contract in these circumstances would make a variation clause purporting to permit the institution to suspend/withdraw a programme more likely to be fair, and the CMA does use this as a mitigating factor in its Guidance. However, this approach would need to be used sparingly and in the full knowledge that this may not provide the student with an adequate remedy in the event that the programme is no longer running.

Next time - The Student Contract: “CMA” Implications of the Provision of Pastoral Support

Eversheds Sutherland has a wealth of experience advising on student contract / “CMA”-related issues in the HE and FE sectors. If you would like to discuss how Eversheds Sutherland may assist you in managing any of the issues addressed above (or any other student contract/consumer related issues) please contact Siân Jones-Davies or Eve England.