Strength in Numbers? Mass litigation against universities, lessons learned and the implications arising from Hamon & others v University College London [2023] EWHC 1812 (KB)

Introduction

There can rarely have been a period of such turbulence in the higher education sector. Strikes by academic staff due to proposed pension changes have been ongoing intermittently since 2018, combined with strike action since 2019 relating to the Universities and Colleges Union’s ‘Four Fights’: pay inequality, job insecurity, rising workloads, and pay deflation. Covid-19 resulted in the complete cessation of normal teaching activities and an overnight switch to online teaching, and even once the worst ravages of the pandemic were over, students have inevitably been impacted by the cost-of-living crisis and rapid inflation.

It was inevitable that such substantial changes to the university experience would result in students looking to their universities for remedial steps, both practical and financial. Importantly, the seismic events outlined above took place in the context of increasing consumerisation of the student-university relationship, accelerated by the Consumer Rights Act 2015 and an increasing regulatory focus on the sector.

It was no surprise that claimant firms should consider this an area of potentially fertile ground, as campaigners and potential litigators on students’ behalf. It is now around five years since the first recruitment drive for a class or group action against universities.

Background and context

From a litigation perspective, progress from that point has seemed relatively slow. As strikes continued, universities became more adept at reducing their impact, so reducing students’ cause for complaint. In respect of any complaints that were made, universities created bespoke complaints procedures aimed at concluding strike-related complaints more quickly.

The Office of the Independent Adjudicator (‘OIA’) also engaged proactively, publishing a briefing note on a ‘pre-emptive’ basis in March 2018, explaining the approach the OIA would take to future strike-related complaints. In a further briefing note in February 2019, the OIA identified some key themes that had arisen in its consideration of strike-related complaints, noting that universities had “gone to considerable lengths” to ensure that students had not been disadvantaged academically, for example by removing topics from assessments and extending deadlines. However, the OIA found significant variation in how providers had sought to replace what it called “lost learning opportunities”. Whilst some universities had replaced lost teaching on particular topics by other methods such as recorded lectures, others appeared to have done nothing “on the basis that there is no contractual obligation to provide a specific number of taught sessions. They have argued with some vigour that students have suffered no loss provided they are not academically disadvantaged”. The OIA rejected that approach: “If a student is led to believe they will learn about a specific topic, then the provider cannot make up for failing to deliver that learning simply by not examining the student on it”. The OIA thereby recognised the inherent worth of teaching what had been advertised, and rejected any suggestion that a degree at the end of the course was all that really mattered. From February 2019 onwards, the OIA published case summaries to guide universities (and students) as to the sort of outcome they could expect.

This activity assisted universities in resolving complaints relatively quickly, and the initial flurry of activity in relation to potential claims appeared to lose momentum. Indeed, it is perhaps not unrealistic to think that the upheaval caused by strikes would not have resulted in substantial litigation were it not for the chaos then wrought by Covid-19, which affected all students at all universities and to a greater extent (and for a much greater period) than strike action. In short, students were being asked to pay full fees for a substantially different university experience, academically and otherwise. It is no surprise in these circumstances that students would begin to wonder whether they were receiving value for the substantial sums they had paid. The momentum that had stalled began to increase once again.

The present litigation

The culmination of that fresh momentum came on 12 January 2023, when a claim was issued on behalf of 924 claimants against University College London (‘UCL’), with a stated intention to add a further 2,147 claimants by amendment (and students from 17 other universities said to be awaiting the outcome). The claims are for breach of contract in respect of UCL’s failure to provide in-person tuition during academic teaching years between 2017 and 2022, where teaching days have been cancelled due to strike action and/or where tuition was moved online and access to facilities was restricted due to Covid. In short, the claim is that students contracted for the provision of in-person tuition and facilities, paid substantial tuition fees for those services, but did not receive those services and were not given  any reduction in fees.

The claimants made an application for a Group Litigation Order (‘GLO’) under CPR r19.21, and this was heard by the High Court in July 2023. The Defendant resisted the application, and at the same time made an application for a stay of the proceedings to enable the Claimants to utilise the university complaints procedures, and thereafter take their complaints to the OIA if necessary.

The applications

The claimants’ application made no secret of the fact that the reason for a GLO included (perhaps primarily) the facilitation of access to justice where claimants lacked resources and had modest claims which would be uneconomic to pursue individually. The claimants’ common costs could be shared, and the determination of common issues would allow early resolution of many of the claims.

UCL’s position was that there was no basis for a GLO, as the claims were inadequately particularised, and proper particularisation would show that issues of liability and quantum were fact sensitive and without sufficient common issues to justify a GLO. Particular disparities amongst claimants were noted in relation to contractual terms, the variety of different programmes and modules, years of study, different strike dates and variations in the effects of Covid-19.  In addition, permitting these students to proceed via a GLO would allow them to sidestep the usual procedure for resolving student claims, as well as encouraging many other students to avoid utilising the OIA. UCL’s position was that the correct approach to the claims was to order a stay so that the parties could seek to resolve the matters without recourse to the Court, and that the OIA had been recognised and approved for this purpose by statute and in caselaw.

The claimants’ position was they were not averse to taking part in an appropriate form of ADR, but they did not consider the OIA scheme to be appropriate. First, this was because the recommendations that the OIA makes are not informed by legal analysis, noting that the pleadings raise issues of law with which the OIA scheme was not equipped to deal, including the construction of the student contracts and the interpretation and application of consumer rights legislation. Secondly, the claimants argued that neither the University nor the OIA were equipped to deal with a group complaint on this scale.

The decision

The decision was to grant a stay of proceedings for eight months so that the parties could consider entering into an appropriate form of ADR. However, the form of that ADR would not necessarily have to be the OIA, with the parties required to co-operate in relation to the most appropriate method of ADR and what steps were necessary in order for that to take place. The order also gave permission to apply after 4 months in the event that insufficient progress towards ADR was made.

Analysis and discussion

It was the Court’s analysis as to what the parties should do, and in particular in relation to the relevance of the OIA, that is of most interest to parties to student complaints generally, as well as being of interest to the OIA itself.

The OIA has long been considered the primary route for the resolution of student complaints against universities. In R (Maxwell) v OIA [2011] EWCA Civ 1236, the Court of Appeal made clear that Parliament’s intention was that students should use the OIA scheme in preference to litigation. The Courts have repeatedly made clear that the making of a complaint to the OIA is a form of ADR sufficient to satisfy parties’ obligations under the CPR (see for example R (Crawford) v Newcastle upon Tyne University [2014] EWHC 1197 (Admin), and that the OIA is the approved consumer ADR body for higher education complaints. A point often made in the OIA’s favour (and that of other similar bodies is the advantage “of being able to produce outcomes that are more flexible, constructive and acceptable to both sides than the all-or-nothing results of unaffordable contests in courts of law” (Maxwell), and whilst the OIA does not provide rulings upon legal rights and obligations, the OIA “does scrutinise the behaviour of the HEI to a standard which would reflect that contained in judicial review proceedings [and] the redress it can provide has a practical flexibility which judicial proceedings lack (R (Rafique-Aldawery) v St George’s, University of London [2018] EWCA Civ 2520).

It is therefore notable (and surprising) that of various concerns about the OIA process relied on by the claimants (and shared by the Judge), one of the most significant (other than the logistical capability to handle the number of complaints) was a substantive issue. Having been referred to a number of published OIA decisions in relation to strikes and Covid, the Court noted that whilst the OIA had considered whether universities had been reasonable in deciding to put teaching online in response to strike action or the pandemic, there “does not seem to have been any consideration as to whether it was reasonable for UCL to do so without providing an adjustment to the fees charged for the period of on-line teaching and where there was no physical access to resources”. In the Court’s view, if that approach was maintained in relation to these claims, then ADR through the OIA scheme was likely to be unproductive.

That does seem a somewhat surprising conclusion. The OIA decisions which are published are brief summaries and it is unclear whether the point referred to by the Court had been the basis of the students’ argument in any of those cases. In the event that the present complaints were made to the OIA, the OIA would presumably not ignore an argument made for return of fees on the basis that teaching was online and in-person facilities were not available.

Indeed, the Court’s attitude to the OIA appears to have been surprisingly sceptical as to the OIA’s ability, or perhaps willingness, to consider the relevant issues. In practise, whilst not making determinations of complex legal issues, the OIA routinely does decide issues of fact and considers the legal position.

Indeed, it is instructive to note the following passage from the OIA briefing of March 2018: “A relevant factor for us to consider will be the terms of the contract between the student(s) and the higher education provider. The OIA does not determine legal rights and responsibilities in the same way that a Court would do. But we will consider the duties and responsibilities of higher education providers under consumer protection law in order to decide whether the provider has acted fairly. We will always consider the terms of a contract through the lens of the CMA’s guidance, but we do this in a broader context than the strict legal principles the Courts have to apply. Our approach is to establish what the higher education provider promised, and what the student could reasonably expect (taking into account our understanding of sector norms and consumer protection law)”. It is clear from this that legal issues are a central factor in the OIA’s considerations.

Moreover, as a form of ADR it is far from necessary (or even essential) for the ADR body to make an assessment of the strict legal merits of claims. The majority of mediators will not provide their views on the legal merits of a party’s position with each party well able to take advice as to the merits of its position and factor that advice into its approach to settlement. No claimant is bound by the recommendations of the OIA, and claimants who are dissatisfied, because of the legal position or otherwise, have the option of a legal claim, with pre-action correspondence and additional attempts at more traditional ADR being an expected part of those proceedings (as the Court recognised).

The claimants’ argument that unsuccessful claims were unlikely to provide a useful indication as to the merits of the claims and would not deter the litigation, appears to overlook the breadth of consideration undertaken by the OIA as well as that argument being applicable to many other forms of traditional ADR. Indeed, it could easily be argued that the outcome of an OIA complaint gives a better idea of the potential merits of a claim than most other forms of ADR.

A further issue where the Court appears to have been sceptical about the OIA’s approach was in relation to the determination of quantum, but again this criticism appears wide of the mark. The OIA’s approach to compensation is generally equivalent to the principles applied in legal claims, i.e. so far as possible to put the student back in the position they would have been in had the university not acted unfairly or unreasonably. Indeed, in one respect students are often better compensated by the OIA than they would be by a Court, as the OIA routinely makes awards for ‘mere’ distress and inconvenience that would not be available in a claim for breach of contract or negligence. The OIA has shown itself well able to grapple with similarly complex issues of the ‘valuation’ of student services in its approach to strike complaints, where fee refunds were made for teaching not provided. As noted in its briefing on its approach to strike complaints: “It is difficult to make a direct correlation between missed contact hours and annual tuition fees. You cannot simply divide £9,250 by the number of teaching weeks, and the number of taught sessions per week to work out the “cost” of the missed sessions. Such a crude measure does not take account of other learning opportunities, facilities, or the potential difference in “value” of final year teaching compared to first year teaching”.

Irrespective of the claimants’ concerns, these inevitably had to be balanced against the costs, and time, likely to be necessary in order to resolve the claims through litigation, whether under a GLO or otherwise. The claims are funded by a damages-based agreement under which the claimants would only receive around two-thirds of the (in any event modest) damages that might be awarded. Accordingly, the parties were encouraged “in the strongest possible terms to engage in an appropriate form of ADR, which will involve serious attempts by both parties to find a compromise in the manner in which that can be achieved”.

It will be fascinating to monitor the progress of these claims. The scepticism of the Court as to the suitability of the OIA as an appropriate means of ADR runs contrary to the approach that has long been accepted in this sector, and it will be interesting to see whether other claimants seek to rely on the Court’s decision as a basis for arguing that they can reasonably proceed straight to a legal claim. The Court’s attitude to the OIA may well be somewhat alarming to universities, given the apparent encouragement to students that matters involving complex legal issues may not be suitable for resolution via the OIA.

As the claimants freely conceded as part of their argument in favour of a GLO, in the absence of such an arrangement these claims will be unviable from an economic perspective. However, a GLO in these circumstances will be far from straightforward. Many different contractual terms apply to different students, depending upon which course they studied and/or when they started their course. The Court noted that UCL had identified 14 different sets of contractual terms affecting students in 7 different academic years. There are wide factual disparities in relation to, for example, science, medical and engineering courses, as compared to the arts and humanities, and many Claimants who are alleged to have accepted their offers after the effects of Covid were known. Issues of quantum appear highly fact-centric, and even the Court appears to have expressly envisaged the possibility that in respect of quantum each claim will need to be considered individually.

A final word

As defendant solicitors acting on behalf of universities, it is easy to be cynical about the way in which potential group litigation is sold to potential clients. It is, however, worth noting that concerns were expressed by the university, and shared by the court, that the claimants may not have been made aware of the level of involvement they would need to have in the provision of relevant evidence. Before the Court was a transcript of the Claimants’ solicitors’ webinar, which included the following statement: “People, I don’t know whether everyone on this call has signed up to participate in the claim. It’s very easy to do, it takes, you know, less than 30 seconds to fill in the form. And that’s, you know if, as I said, if you want that’s the only time you spend on it until the compensation comes through. It’s very straightforward…”).

A final, final word then from the OIA itself, as there is at least one case summary where the OIA refused to consider a complaint on the basis that the student had attempted to pursue it through solicitors without first completing the university’s own complaints procedure. It is not difficult to detect the somewhat caustic tone in the OIA’s conclusion that “It is a pity that students who have signed up for the so called “class actions” risk being disadvantaged in this way”. It remains to be seen whether that tone is consistent with the ultimate resolution of these matters.