The Retained EU Law Bill and the potential impact on the relationship between HE providers and students

Introduction

The Retained EU Law (Revocation and Reform) Bill (the “Bill”) will, if passed, have significant implications for sectors currently affected by retained EU law (i.e. EU-derived law that remains on the UK statute book following Brexit). This includes consumer protection law, which is of central importance in governing the relationship between higher education (“HE”) providers and students. In this article, we consider the Bill’s potential implications.

Consumer protection law and the relationship between HE providers and students

Consumer protection law underpins many key elements of the relationship between HE providers and prospective and current students. In 2015, the Competition and Markets Authority (“CMA”) published advice for HE providers in order to help them understand and comply with consumer protection law in their dealings with students.[1] This explained the CMA’s view that an HE provider will be a “trader” or “seller or supplier”, and an undergraduate student a “consumer”, for the purposes of consumer protection law.

The CMA’s advice focuses on the requirements of consumer protection law in three areas:

1. information provision to prospective and current students;
2. the need for terms and conditions to be fair and balanced; and
3. complaint handling processes and practices.

The relevant requirements in those areas derive primarily from the following legislation, all of which was originally enacted (at least in part) to implement EU law.

• The Consumer Protection from Unfair Trading Regulations 2008 (“CPUT Regulations”). These can apply at any stage of an HE provider’s interaction with prospective and current students. They prohibit HE providers from engaging in unfair practices in their dealings with students and prohibit misleading actions and omissions and aggressive practices which are likely to have an impact on students’ decisions. For example, it may be a breach of the CPUT Regulations for an HE provider: to give a misleading impression at an open day that a particular individual will be involved in teaching a course, when this is not the case; or to engage in certain aggressive practices towards students relating to the use of academic sanctions for non-tuition fee debts. The CPUT Regulations are domestic, but EU-derived, secondary legislation and originally implemented the Unfair Commercial Practices Directive (2005/29/EC).
• The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“CC Regulations”). These require HE providers to provide certain pre-contract information and provide students with cancellation rights for contracts made at a distance or away from business premises. For example, the CC Regulations: require HE providers to give or make available to prospective students information about complaints handling policies before a contract is concluded and subsequently confirm this information on a “durable medium”; and provide students who enrol remotely with a 14-day right of cancellation. The CC Regulations are also domestic, but EU-derived, secondary legislation and originally implemented the Consumer Rights Directive (2011/83/EU).
• The Consumer Rights Act 2015 (“CRA”). This prevents HE providers from enforcing unfair terms in in consumer contracts with students. A term or notice is unfair if it causes a “significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer” (i.e. the student) and is contrary to the requirement of good faith. The CRA sets out a “grey list” of certain terms which may be regarded as unfair and blacklists certain other terms. It may, for example, be unfair to include terms in student contracts giving a wide discretion to vary course content and structure or to increase fees during the course, or giving a blanket assignment of intellectual property rights from students to HE providers. The CRA also imposes statutory obligations on HE providers, such as an obligation to provide educational services with reasonable care and skill, and provides specific statutory remedies to students where HE providers do not meet those obligations. Various provisions in the CRA are EU-derived and originally implemented EU law, including the Unfair Contract Terms Directive (93/13/EEC) and the Consumer Rights Directive (2011/83/EU).

The Retained EU Law (Revocation and Reform) Bill

The Bill was introduced into Parliament in September 2022 and had its second reading in the House of Lords on 6 February 2023. Key provisions of the Bill include:

• The sunsetting (i.e. revocation) of certain EU-derived legislation at the end of 2023 (clause 1). This includes EU-derived secondary legislation which was originally made for the purposes of implementing EU law, such as the CPUT Regulations and the CC Regulations. Primary legislation (such as the CRA) will be unaffected by the sunsetting provisions in the Bill.
• Minsters having the power to make regulations exempting particular legislation from sunsetting (clause 1(2)) or to delay the sunsetting of legislation until no later than 23 June 2026, the tenth anniversary of the Brexit referendum (clause 2(4)).
• Ministers having a broad set of powers to re-write EU-derived secondary legislation by, for example, re-stating or replacing it (clauses 12-17). The “restatement” of legislation may involve resolving ambiguities, removing doubts or improving clarity or accessibility. The “replacement” of such legislation may involve enacting new provisions which either “achieve the same or similar objectives” or are simply what the relevant Minister “considers appropriate” (clause 15(2) and (3)).

The relevant powers provided to Ministers under the Bill would be subject to varying degrees of, but limited, Parliamentary oversight and scrutiny.

Implications for the relationship between HE providers and students

Significant uncertainty remains about the effects of the Bill on consumer protection law and, in particular, any consequences for HE providers and their relationship with students. Quite apart from the uncertainty about the ultimate effects of the provisions themselves, and the exercise by Ministers of their various powers, the Bill has not yet completed its passage through Parliament. The House of Lords may pass significant amendments to the most controversial provisions of the Bill. It is possible that the Bill itself may therefore ultimately be enacted in significantly different form (assuming it is enacted at all).

However, assuming that the Bill is passed substantially in its current form, HE providers should be aware of the following key implications:

• The Government will have to consider how to deal with the CPUT and CC Regulations. The default position, in the absence of any action taken by the Government, is that these regulations will sunset (i.e. be revoked) at the end of 2023. However, as primary legislation, the CRA will not sunset.
• Rather than allowing the CPUT and CC Regulations to sunset, the Government may either exempt them from the sunsetting provision in the Bill entirely or postpone their sunsetting until some point no later than 23 June 2026.
• Alternatively, the Government may decide either to restate or replace the CPUT and the CC Regulations. Under the Bill in its present form, the Government would have broad powers to do so (subject to Parliamentary oversight). It is not yet clear whether the Government would seek to make changes to consumer protection law which would substantively affect the relationship between HE providers and their students. However, this is not inconceivable. It appears less likely that students’ rights under consumer protection law could be strengthened, given that the Government’s powers to replace EU-derived secondary legislation may not be exercised, broadly speaking, in such a way as to give rise to additional regulatory burdens (clause 15(5) of the Bill).

In summary, therefore, HE providers should be alive to the possibility that substantive changes may be made to important elements of the consumer protection law that governs the relationship between them and their students. We will be closely following developments in Parliament and pronouncements about Government policy in this area over the course of 2023.

You may also be interested to read our recent article on a High Court case which looked at whether postgraduate research students are “consumers” for the purposes of relevant consumer law, in the context of a dispute about IP rights: High Court looks at student related consumer law issues.

[1]              UK higher education providers – advice on consumer protection law, 12 March 2015, CMA33 (available here). As with the CMA advice, this article is limited to considering the position with respect to undergraduate students.