SP Jain London School of Management Limited

Students have a right to fair, clear and accessible terms and conditions in the contract they have with their university or college so that they benefit from the protections of consumer law and understand their rights. This case study provides an example of our work to protect students’ consumer rights before and during their studies.

We have also published a version of this case study for students to explain the sort of contract terms that could undermine their consumer rights, and what they should look out for when reviewing terms and conditions.

Where students, their representatives and students’ unions have concerns about terms and conditions, they should raise these with their university or college. If this doesn’t lead to a satisfactory outcome, they can raise a complaint with the Office for the Independent Adjudicator. They can also notify us about concerns that a university or college is not meeting its obligation to uphold students’ consumer rights.

Only a court can determine whether consumer law has been breached. This case report sets out work the OfS and Trading Standards have done to ensure providers’ student contracts do not contain terms and conditions that could be deemed unfair or to affect students’ consumer rights.

Case overview

The OfS referred SP Jain London School of Management Limited (SPJ) to National Trading Standards in April 2024, because we identified terms and conditions in the provider’s contract with students that we considered were likely to be unfair. A Trading Standards assessment identified elements in SPJ’s terms and conditions that it considered could be deemed to be unfair and may not comply with the provisions of Part 2 of the Consumer Rights Act 2015. SPJ worked with Trading Standards to change its terms and informed current and re-enrolling students of the revised terms and conditions. The OfS is not taking any further regulatory action because SPJ took action to address these issues.

This case study sets out the OfS’s role in protecting students’ consumer rights, and shows how our partnership with National Trading Standards works in practice to identify and assess whether a higher education provider’s terms and conditions could be deemed to be unfair under consumer protection law.¹ It explores the terms and conditions we had concerns about in this case, and how these were resolved through our partnership with Trading Standards and the action it took.

We encourage other universities and colleges to use this case study to familiarise themselves with their legal obligations and to revisit their own terms and conditions where that is necessary to ensure compliance with consumer protection legislation. Any changes should be communicated clearly to students.

The consumer rights issue

The OfS engaged with SPJ in 2022, after we identified some aspects of terms and conditions in its contract with students that we considered were likely to be unfair and may not comply with consumer law. We were concerned that, overall, SPJ’s student enrolment terms and conditions compromised students’ rights because the document contained clauses relating to extra costs that were not likely to be clear, intelligible and unambiguous, as required by the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Contracts (Information, Cancellation and Additional Charged) Regulations 2013 and the Competition and Market’s Authority (CMA) guidance to UK higher education providers.²

SPJ made some changes to its terms following our engagement. However, we identified issues in the updated terms and conditions that gave rise to concerns about its compliance with consumer protection law.

The following clauses were of particular concern:

'The school will do all that it reasonably can to provide educational services as described on its website and/or in the programme prospectus, programme specification or other documents issued by it to appropriately enrolled students. Sometimes circumstances beyond our control mean that we cannot provide such education services. This might be because of, for example, industrial action by school staff or third parties.'

We were concerned about this clause because industrial action by school staff is reasonably within the provider’s control and is therefore unlikely to be classified as a force majeure (an event for which no party can be held accountable) and should not be used to limit liability. This is contrary to paragraph 5.37 of the CMA guidance to higher education providers, which states that ‘terms limiting liability are more likely to be considered fair where they are restricted in scope to problems unavoidably caused by factors beyond the trader’s control. The relevant circumstances should be clearly and specifically described, and in the CMA’s view there should be no listing of matters that could be within the trader’s control – for example industrial disputes with the trader’s own employees’.

'The school’s liability to you under the contract shall in no circumstances be greater than the total tuition fees due in respect of your programme.'

We were concerned with this clause because it seeks to limit the provider’s liability to the total tuition fees paid by the student, which is contrary to the CMA guidance to higher education providers. This type of term is blacklisted³ because it contradicts contract law and the provisions of the Consumer Rights Act 2015. In addition, paragraph 5.6.1 of the CMA’s Unfair Contract Terms Guidance states that ‘if a contract is to be fully and equally binding on both trader and consumer, each party should be entitled to full compensation where the other fails to honour its obligations. Clauses which limit the trader’s liability are open to the same objections as those which exclude it altogether’.

'In the unlikely event that, due to a technical error, the amount of the tuition fees displayed on the website or set out in the offer email is incorrect, the school will notify you as soon as it reasonably can. If the correct amount of the tuition fees is higher than as is displayed on the website or set out in the offer email, then you will be given the opportunity to cancel your place and receive a full refund at the time you are notified of the higher tuition fee. If the tuition fees are lower than displayed on the website and/or in the prospectus, then you will be refunded the difference between the lower tuition fees and the amount which you have paid. Any refund will be in accordance with the tuition fees policy.'

We were concerned with this clause because it enabled the provider to alter the contract after it was formed without the student’s agreement. This is contrary to paragraph 4.37 of the CMA guidance to UK higher education providers, which states ’under the Consumer Contracts Regulations 2013, the pre-contract information is treated as being a term of the contract and legally binding. Difficulties will therefore arise if you seek to make changes after the contract is concluded, and any terms that purport to permit you to do so are subject to the test of fairness under the Consumer Rights Act. A blanket provision that purports to allow the higher education provider to change important elements of the course (or make any changes it wants) would not be acceptable and is likely to be unfair under the Consumer Rights Act’. 

The Trading Standards assessment

Due to our concerns about the higher education provider’s updated terms, we referred the case to National Trading Standards. Through our partnership, Trading Standards will examine each referral it receives from the OfS. The agreement means that we are supported by Trading Standards’ expertise in understanding and enforcing consumer protection legislation so that together we can effectively protect students’ consumer rights. 

Trading Standards advised the higher education provider that some aspects of its terms and conditions may not comply with the provisions of the Consumer Rights Act 2015, Part 2 Unfair Terms. Trading Standards advised the OfS that it considered these terms could be deemed unfair under the legislation because the terms as written caused significant imbalance in the rights and obligations of the university and students, which causes detriment to students.⁴

Resolving the issue

SPJ responded to the advice from Trading Standards by updating its student enrolment terms and conditions for the 2024-25 academic year. The main changes SPJ made were:

• The term seeking to limit liability for industrial action by the provider’s own staff was removed.
• The term seeking to limit the provider’s liability to the total amount of tuition fees paid was removed.
• The term that enabled the provider to alter prices where a mistake had appeared in an offer letter was removed.

The OfS did not take any further regulatory action against SPJ on these issues.

We will continue to refer cases to National Trading Standards where we have concerns, and we expect to publish further case reports explaining the outcomes of these cases.

Notes

[1] See 'New OfS-National Trading Standards partnership to protect students’ rights as consumers'.

[2] This guidance Consumer law advice for higher education providers (publishing.service.gov.uk) was updated in May 2023. All references in this case report refer to the updated guidance.

[3] Part 2 of the Consumer Rights Act 2015 contains terms and notices that are automatically unenforceable against consumers. Part 1 of the Act also blacklists certain terms and notices, making them automatically unenforceable and open to challenge.

[4] The Consumer Rights Act 2015 contains an indicative and non-exhaustive list in Part 2 Schedule 2 of terms that may be regarded as unfair, known as the grey list. This also applies to terms that have the same purpose or effect as terms on the grey list. However, these terms are not automatically unfair.