Universities must manage strike risks to avoid student claims

Out-Law Analysis | 22 Feb 2018 | 9:54 am | 5 min. read

ANALYSIS: Universities can put measures in place to minimise the risk of successful compensation claims from students whose studies are disrupted by strike action relating to the ongoing staff pension dispute.

New universities minister Sam Giymah has unhelpfully suggested that students should be refunded if teaching commitments are cancelled, while there are reports of student groups across the UK already petitioning their institutions with demands for monetary compensation and threats of legal action if satisfactory assurances that any demands for loss and damage will be met.

However, what both the universities minister and those promoting the case for compensation appear to be missing is that the contract between a university and student is not simply for the delivery of a set number of lectures, tutorials or seminars but a participatory contract for the delivery of an educational experience. Therefore, there is no clear right to receive compensation if an element of teaching is disrupted if the main purpose of the contract is still being delivered.

In addition, it appears to assume that any alleged disruption cannot be managed.

Members of the Universities and College Union (UCU)  have started an intended 14 days of industrial action today, in response to proposed changes to the Universities Superannuation Pension Scheme.

Over 60 universities across the UK and almost 42,000 students are  affected by the first wave of strikes which are taking place today and tomorrow. There have also been warnings that, if a solution to the pensions dispute is not achieved, UCU could be considering further strikes in March, April, May and June which could impact on the periods when students will be undertaking end of year examinations or finals.

Since the wave of strikes in 2006, universities have become well versed in handling disruption caused by industrial action. Universities affected by the UCU's latest action are already working hard to put in place contingency plans to avoid or minimise disruption to student services. There is no suggestion that students at affected institutions will be deprived of the purpose of their contract with their university or have grounds to bring successful legal claims against their university even if the industrial action means that teaching hours cannot be delivered over the next few weeks or months.

The strength of a university's position in the face of such claims will very much depend on the terms of its contract with its students and whether its actions are such that a court would accept as it taking all steps that would be regarded as fair and reasonable in all the circumstances.

As the relationship between a university and its students is based in contract, an initial step in managing risk is to put in place terms which are intended to provide protection in the event of unforeseen events, including industrial action.

The usual approach to protect against legal challenges is to insert a competent 'force majeure' provision into the contract. Force majeure is a contractual provision found in most commercial contracts. It refers to an event or series of events outside the control of the contracting parties which prevents on of them from performing its contractual obligations to the other. The provision contains a disclaimer which operates to protect the defaulting party from liability for non-performance or late performance when such events arise or continue.

Typical examples of force majeure events include natural disasters such as fire, flood, earthquake, bad weather conditions or other substantial disruptions outside of the parties' control such as explosions, civil commotion, war or terrorist attack. it is now common practice for commercial contracts to include industrial action and strikes as defined force majeure events.

However, like any contractual term, a force majeure provision must be successfully incorporated into the contract at the point it is entered into. In a situation where industrial action is imminently anticipated, it is unlikely that a contract could be varied to include such a clause. The timing and circumstances of any attempts to vary student contracts to limit or exclude liability this close to potential industrial action will inevitably form part of the fairness and reasonableness test the court will apply.

In addition, while force majeure provisions are an important protective measure, they are not by themselves a cast iron defence to claims for breach of contract. Reliance on force majeure provisions can be challenged in the courts, or indeed by the Competition and Markets Authority (CMA). Force majeure in a student contract will operate as an exclusion of liability in a consumer contract, so will therefore also be subject to consumer protection legislation.

The university must be able to demonstrate that any force majeure provisions are fair and reasonable in all the circumstances. As part of this assessment, the court is likely to require that the university demonstrate that it has taken all reasonable steps to avoid the operation of the event, and to mitigate its effects on the other party. A challenge is likely to be made on the basis that the university could have negotiated a compromise or agreed to the demands of the strikers to avoid the risk of widespread industrial action. If the university can demonstrate that it did all that it reasonably could to avoid disruption, the courts are more likely to find that the provision is enforceable.

Regardless of whether a university has a force majeure provision in its contracts or not, it must also carefully plan and document the practical steps it will take to avoid disruption and limit its effects. If a provision exists and is relied upon, the steps taken to minimise disruption will need to be disclosed to the courts if a challenge is made on the basis of fairness or reasonableness. If no provision exists, the university may still be able to avoid or at least limit the scope for a successful breach of contract claim being made by students by demonstrating the steps it took to minimise disruption.

Obvious measures include recruiting extra markers to mark assessments, appointing external examiners, rearranging lectures and assessments where possible and preventing unnecessary delays at all times. Universities may be able to offer web-based materials, lecture capture and other virtual means to address any lost teaching hours, while we also understand that many institutions are looking at reviewing whether questions can be held back from examinations if those subjects have been 'materially' disrupted or making changes to academic regulations in order to permit determination of awards to be made on the basis of a more limited range of marks or results.

If exams are disrupted other options available could include a change in the focus of the degree ceremony from a formal degree confirming ceremony to a celebration, should results not have been returned at that point; delaying the ceremony; or awarding marks on the basis of provisional assessments. An important preliminary point which must be considered here is whether the university has the requisite constitutional powers to implement such measures on an emergency basis. If not, then constitutional reform may need to be undertaken to allow this to happen.

Universities should also consider whether they have adequate insurance coverage in place in case successful claims are brought by students as a result of disruption.

Julian Sladdin is a university dispute resolution expert at Pinsent Masons, the law firm behind Out-Law.com.