Out-Law / Your Daily Need-To-Know

Force majeure and industrial action

Out-Law Guide | 22 Mar 2011 | 11:03 am | 4 min. read

This guide is based on UK law. It was written in March 2011.

Universities need to have plans in place to avoid or minimise disruption to student services in the case of industrial action. Minimising the impact in students is critical. A wave of strikes in 2006 highlighted the fact that universities could be exposed to legal claims from students, even if the cause of the disruption was arguably due to matters beyond their control.

Contractual Provisions

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 protecting against student legal challenges is to put in place a competent 'force majeure' provision in the student contract. However, if a force majeure provision does not exist in a university's existing contractual documentation and present strikes imminent it may not be possible to introduce such an enforceable term in advance. Therefore, we also provide some guidance on how the risk of future industrial action can be mitigated and the prospect of successful claims avoided without such terms below.

What is force majeure?

Force majeure is a contractual provision that is found in most commercial contracts. The provision refers to an event or series of events outside the control of the contracting parties which prevents one 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 events in question arise or continue. Typical examples of force majeure events including 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.

Potential Areas of challenge

Relying on force majeure provisions is not cast iron defence to student claims. Reliance on force majeure provisions can be challenged in the courts. As force majeure in a student contract will operate as an exclusion of liability in a consumer contract it is subject to consumer protection legislation, most notably the Unfair Contract Terms Act 1977 and the Unfair Terms and Consumer Contracts Regulations 1999.

This means that the university will need to demonstrate that the force majeure provision is fair and reasonable in all the circumstances. As part of this assessment the court is likely to require the university to demonstrate that it has taken all reasonable steps to avoid the operation of the force majeure event and to mitigate its effects on the other party. This is because, amongst other things, a challenge is likely to be made on the basis that disruption caused by strikes is not something which is outside the control of the university as 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.

What if I do not have a force majeure provision already?

Most universities tend to publish a disclaimer at the back of their prospectus. If it has not already been done, this wording could be amended relatively easily to include appropriate force majeure wording.

Like any contractual term, the force majeure provision must be successfully incorporated at the point the contract is entered into. So while this change may be valid and enforceable in relation to future years it is likely to be too late for existing students, particularly final year students who are most likely to be affected by disruption during the exam period and beyond.

It is possible for new terms to be incorporated after a contract has been entered into by making a contractual variation. An attempt to revise existing student contracts by inserting a force majeure provision would, however, require some form of notice to be given to affected students in advance and their written consent to the variation sought.

In a situation where industrial action is imminently anticipated the notice given is likely to be ineffective and the proposed changes probably a red rag to a bull. The timing and circumstances of any attempts to vary the student contract will inevitably form part of the fairness and reasonableness test the court will apply. Given the closeness of any potential industrial action it is unlikely that variations to limit or exclude liability which are hastily introduced will be enforceable. But if a change is introduced at an earlier stage (in a perfect world the start of a student year) it is likely to be regarded more sympathetically by the courts.

Mitigating measures

Whether a university has a force majeure provision or not, it needs to carefully plan and document the steps it will take to avoid disruption and limit its effect. If  a force majeure provision exists and is relied upon, the steps taken to minimise disruption will still need to be disclosed to the courts if a challenge is made on the basis of fairness or reasonableness. If no force majeure provision exists, the university will need to do this anyway to avoid or at least limit the scope for a successful breach of contract claim being made by students as a result of 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.

Other options available could include 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, or delaying the ceremony, or awarding marks on the basis of provisional assessments. However, an important preliminary point which must be considered 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.