The case of Churchill v Merthyr Tydfil is still on its way to appeal, to decide whether a Claimant should use a Council’s internal complaints process before starting proceedings.
In the meantime another Court has found that students in a group action against a university regarding in person tuition, should use ADR.
The case hit the headlines as the Daily Mail announced that
“Students could be given the green light to sue universities for more than half a billion pounds in compensation over learning lost to Covid and strikes.
A legal judgment opens the door to a torrent of claims – with every student who attended university since 2018 potentially in line for an average of £5,000.”
The case is called Hamon & Ors v University College London [2023] EWHC 1812 (KB) (17 July 2023)
URL: http://www.bailii.org/ew/cases/EWHC/KB/2023/1812.html
The Claimants had applied for a group litigation order and the Defendant university applied for a stay.
The claim was issued on behalf of 924 Claimants, although there was now an intention to add a further 2,147 Claimants. UCL deny liability, causation and quantum in a Defence served without prejudice to its case that the claims should be stayed for ADR and that the claims are inadequately particularised. As the judge set out:
“The Claimants and proposed additional claimants are all current or former students at University College London (“UCL”). Their claims are for breach of contract in respect of UCL’s failure to provide in-person tuition during the academic teaching years 2017-2018, 2019-2020, 2020-2021 and 2021-2022, where teaching days have been cancelled due to strike action and/or where tuition was moved online and access to facilities restricted due to Covid. In summary their claim is that they are consumers who contracted on standard terms with UCL for the provision of in-person tuition and campus facilities, who paid substantial tuition fees for those services ranging from £9,250 p.a. for UK-resident undergraduates to £25,000 p.a. or more for UK graduate students and international students, but they have not received the services for which they contracted and paid.”
I set out below an extract from the judgment, but essentially the same arguments as will be raised in the Churchill v Merthyr Tydfil case were raised. The university argued that there should be a stay while students used the university complaints process and the OIA, which is a registered ADR provider like ProMediate,. The Claimants objected on various grounds.
The judge decided to order a stay for 8 months, for ADR. Interestingly the judge gave the parties 4 months to apply to vary the order to address the Claimants’ concerns, saying that:
“I shall accordingly order such a stay of 8 months from the handing down of judgment. I expect the parties to adopt a more consensual approach than has been the case previously, and do their best to use this time productively.
This order will however include a provision for permission to apply after 4 months. This is due to my concerns as to: That permission should be used only as a last resort, and if an application is made the court will expect the applicant to explain what had occurred since this judgment was handed down and justify why they consider that ADR was not proving to be successful or why, if that were to be the case, it had not been attempted.”
This decision should give the Defendants in the Merthyr Tidfyl case heart that the Court of Appeal will find in their favour too.
Defendants in cases, particularly involving public authorities should study this judgment as they can use the same arguments to seek a stay in their cases. It suggests that the groundswell is moving in the direction of mandatory mediation or other forms of ADR. Notably the judge did not say that the Claimants had to use the ADR suggested but could use mediation.
The Decision
“In any event, I do not propose to make a mandatory order for the Claimants to engage in ADR, but I do intend to make an order for a stay, with the express intention of encouraging the parties to use the period of the stay to engage constructively in some form of ADR. I consider that in this claim the usual sanction for failure to engage appropriately in ADR will be sufficient. The Claimants have stated that they are willing to engage in ADR, both in open court and in correspondence in May and July 2022. They are just not willing to do so via the medium of the OIA scheme. Whether their objections to that scheme, if persisted in, are reasonable or not will be a matter for future determination.
I encourage the parties 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. If UCL/the OIA can provide satisfactory assurances as to the concerns noted above, then there is a ready-made ADR process that will, if successful, limit costs substantially because legal representation may be unnecessary. I accept that it was not Parliament’s intention to give the OIA exclusive jurisdiction in respect of student complaints against universities, unlike the previous regime where complaints had to be submitted to the University Visitor. In the debate of the Bill in the Lords on 19 April 2004 before the HEA was passed, the Minister introducing the Bill, Baroness Ashton of Upholland, said of the OIA scheme, which replaced the exclusive jurisdiction of university visitors in respect of student complaints:
The CPR and the many authorities referred to by UCL support the encouragement of ADR as an alternative to litigation whether before proceedings are issued, at the commencement of proceedings or during proceedings. The most important considerations are that both parties know the other parties’ case, so that the litigation risk can be assessed, and that ADR is attempted at a sufficiently early stage to enable costs to be saved, so that parties are not discouraged from settlement by the extent of incurred costs. These claims are all individually of low or modest value, group litigation can be costly, and there is a statute backed ADR scheme in place, all factors that point in favour of the parties attempting construction discussions through some medium of ADR. The fact that the OIA scheme is not aimed at addressing legal issues would not prevent satisfactory resolution of at least a reasonable proportion of claims, and potentially a significant number, if sufficient resources are committed.
There is also nothing to prevent UCL agreeing to some form of ADR outside the statutory scheme, such as mediation, and if the Claimants were to propose a reasonable alternative, my view is that this should also be given appropriate consideration. In any event, in order for the stay to have the best chance of being constructive, both parties should be willing to provide information to enable some progress to be made in identifying facts relevant to quantum, such as dates when teaching for the courses affected moved online, whether this was by reason of strike action or Covid, and dates when physical access to the university for study or research was not possible. “
The Judgment:
UCL seeks a stay for “a period of time sufficient for the Claimants to participate in the statute backed ADR process”. It was submitted at the hearing that a period of 8 months would be likely to be sufficient to allow for participation in the OIA scheme.
UCL relies on Paragraph 3 of the Practice Direction – Pre-action Conduct and Protocols, which states that before proceedings are issued the court expects the parties to have exchanged information to “try to settle the issues without proceedings“, “consider a form of Alternative Dispute Resolution (ADR) to assist with settlement” and Paragraph 8 which states: “Litigation should be a last resort” (White Book Vol 1 p2539). Once proceedings are issued, the CPR requires the Court to further the Overriding Objective by actively managing cases. CPR r.1.4(2)(e) specifies that active case management includes:
The use of ADR to resolve disputes is an integral part of the litigation process. The White Book Section 14-2 states:
It is submitted that if the Claimants participate in the free, statute backed OIA scheme, the time and cost of High Court proceedings might not be incurred; and any claims that are not settled will at least then be properly particularised.
UCL also notes that there is no witness evidence from any Claimant explaining why ADR has not been pursued. UCL’s request for confirmation that each Claimant has been informed of UCL’s invitation to submit a complaint form in the free UCL complaints procedure has not been answered.
The court was referred to recent examples of Court orders which encourage or facilitate ADR, such as: Although the Claimants rely on Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576; [2004] 1 WLR 3002, it is submitted that UCL is not seeking an order compelling all students to enter into ADR, but an order staying these proceedings. Halsey does not deprive the court of the power to stay proceedings with a view to giving the parties opportunity to undertake ADR. The ordering of a stay with a view to the parties engaging in ADR does not contravene Article 6 European Convention of Human Rights. Such stays have been ordered or approved in many reported cases. If the case does not settle during the stay, the claimants still have their right to litigate, albeit that they will be at risk of adverse costs orders if they refuse to participate at all in ADR during the stay.
UCL rely on Andrew v Barclays Bank href=”https://www.bailii.org/ew/cases/EWHC/Mercantile/2012/B13.html”>[2012] CTLC 115, a claim by numerous consumers for PPI mis-selling. Barclays set up an internal complaint handling process in compliance with its regulatory obligations. A customer not satisfied with the outcome of that process could take their complaint to the Financial Ombudsman Service. The bank sought a stay of court proceedings to permit it to consider the complaint made by the claimants. Waksman J rejected the claimants’ argument that a stay was a fetter on the claimants’ access to justice at [28]. The judge said at [24] that the courts can give “robust encouragement” to the parties to use ADR and a stay was ordered at [41]. Other cases have ordered stays for the purposes of ADR despite the opposition of one or more of the parties, including in the context of group litigation: Grenfell Tower Litigation[2022] EWHC 2006 (QB) [99] per Senior Master Fontaine.
The fact that the claims are defended is no reason not to order a stay: that argument was rejected by Waksman J in Andrew v Barclays at [36] where he described that argument as “absurd” and pointed out “there are many cases that are defended and defended vigorously which nonetheless end up in settlement”.
It is submitted that it is also relevant to the exercise of this discretion that the 2021 report by the Civil Justice Council expressed the view that Halsey was wrong to say that the court could not also direct a claimant to actually participate in ADR. After Halseywas decided, the Court of Justice of the European Union held in Rosalba Alassini [2010] 3 CMLR 17 at [61]-[66] that Italian legislation requiring a consumer to attempt mediation before suing phone companies was compatible with Article 6. To similar effect is the CJEU’s decision in Menini v Banco Popolare Societa Cooperative [2018] CMLR 15. Speaking extra judicially in 2010 (in ‘Compulsory ADR’ para 47 produced by the CJC) Lord Dyson (who gave the leading speech in Halsey) concluded that “it is clear that in and of itself compulsory mediation does not breach Article 6.” The cases are clear that this court can order a stay with a view to the parties undertaking ADR.
Furthermore, some of the Claimants agreed to use UCL’s complaints procedure. The undergraduate terms for students commencing studies in the 4 academic years 2018 to 2021, and the post-graduate terms for students commencing studies in the two academic years commencing 2020 and 2021, contain a term that: “UCL has an established Student Complaints Procedure…which you should use for dealing with both academic and non-academic complaints that you wish to make“. In Cable & Wireless v IBM UK Ltd [2002] CLC 1319, Colman J held at 1326-1327 that the court should uphold clauses requiring ADR procedures to be undertaken. This was recently approved by the Court of Appeal in Kajima Construction Europe (UK) Ltd v Children’s Ark Partnership [2023] EWCA Civ 292 where it was noted at [1] and [79-81] that a court is likely to stay proceedings until the dispute resolution procedure has been completed. The remedy of a stay is of course discretionary, but there is good reason why the complaints procedure should be used for these small claims which has the potential to avoid wasting court time and legal costs.
The OIA has been approved by the Chartered Trading Standards Institute as the consumer ADR body for higher education complaints (pursuant to Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes).
Section 14 of the HEA provides that the designated operator must comply with the duties set out in Schedule 3 to the Act. Paragraph 2 of Schedule 3 obliges the OIA to provide a “scheme for the review of qualifying complaints” which must meet the conditions set out in Schedule 2 to the Act. Those conditions include that a reviewer must make a decision as to the extent to which a qualifying complaint is justified (paragraph 5 of Schedule 2).
The OIA, in common with almost all other forms of ADR, was not established to be another court of law or tribunal “but as a more user friendly and affordable alternative procedure for airing students’ complaints and grievances” per Mummery LJ in R (Maxwell) v OIA href=”https://www.bailii.org/ew/cases/EWCA/Civ/2011/1236.html”>[2011] EWCA Civ 1236, [2012] PTSR 884 at [37]. Mummery LJ also noted at [38] that processes such as the OIA scheme “have 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”
The Administrative Court has made clear that the making of a complaint to the OIA is a form of ADR and falls within the ambit of ADR procedures envisaged by Lord Woolf in his Access to Justice report (June 1995) (R. (on the application of Crawford) v Newcastle upon Tyne University [2014] EWHC 1197 (Admin) [38-44]).
The CPR, the Higher Education Act and the caselaw all firmly support UCL’s application for a stay for the purpose of the Claimants participating in the statute backed OIA scheme.
UCL has waived the requirement for the Claimants to bring their complaints within three months (Sladdin 1 §19).
Although Dunleavy 1 at §15 suggests that all students would need to go through the UCL complaints procedure and and then also the OIA referral procedure, that presupposes that UCL would reject all complaints, and there is no basis for such an assumption. Sladdin 2 explains that UCL has upheld complaints about both the impact of industrial action and Covid (see Sladdin 2 §10). Further, UCL has already set up funds to compensate students affected by industrial action which has paid out a total of £281,725 in respect of 854 applications made by the Applicants (Sladdin 1 §171.1 – 174.3).
The National Union of Students endorsed the OIA scheme as the preferable route for resolving claims for compensation for missed teaching time as a result of strike action in its newsletter dated February 2020 (Exhibit JMS 1 729)
It is submitted that the Claimants’ other objections to the use of ADR are also without merit, for the following reasons:
In summary, UCL submits that the various objections put forward by the Claimants for not using the statutory-backed OIA procedure do not withstand scrutiny and that their denigration of UCL and the OIA is unwarranted. UCL also stated that there would be an adverse impact on the Claimants’ solicitors’ financial interests if the Claimants’ claims are resolved without recourse to litigation (see Sladdin 1 §47-48), an assertion which is disputed by the Claimants.
The Claimants note that a stay is sought because the OIA cannot review a complaint which is the subject of court proceedings unless they have been put on hold: OIA Rule 5.7. Thus the common practice of building time for ADR into the case management timetable is therefore not an available option for this particular form of ADR. Further the OIA will not review a complaint unless the student has completed the UCL complaints procedure which means that the stay would not take effect until complainants have completed the two-stage process of (1) complaint to UCL, and (2) referral of their complaint to the OIA, unless their complaint under the UCL complaints procedure is resolved to their satisfaction.
The Claimants submit that they cannot be compelled to take part in ADR as a condition of pursuing claims: Halsey at [9], cited with approval by the Court of Appeal in Swain Mason v Mills & Reeve (a firm) [2012] EWCA 498 at [76]. In Wright v Wright [2013] 4 Costs LO 630 the court queried whether Halsey should be reviewed (at [3]), but Halseywas subsequently endorsed by the Court of Appeal without criticism in PGF II SA v OMFS Company 1 Ltd [2014] 1 WLR 1386 at [22].
However the Claimants are not averse to taking part in an appropriate form of ADR, whether now or later. They consider the OIA scheme to be inappropriate because the recommendations are not informed by legal analysis. The Claimants rely on R (Siborurema) v Office of the Independent Adjudicator [2007] EWCA Civ 66 at [17] where the then holder of the Office, Baroness Deech, gave a witness statement in which she said the OIA desires “to avoid a legalistic approach” and that OIA decisions are based on “fairness and a consideration of higher education practices rather than legal rights.
The Claimants also refer to R (Shelley Maxwell) v OIA [2012] PTSR 884 at [23(2) and (4)], where the Court of Appeal held that the OIA scheme involves conducting a fair and impartial review of a complaint against a university, drawing on its own experience of higher education, with a view to making recommendations. It considers whether the relevant regulations have been properly applied by the university, whether it has followed its own procedures and whether its decision was reasonable in all the circumstances. It is submitted therefore that it is not the function of the OIA to determine the legal rights and obligations of the parties involved, or to conduct a full investigation into the underlying facts. It was held in Maxwell at [23(5)] that “Those are matters for judicial processes in the ordinary courts and tribunals. Access to their jurisdiction is not affected by the operations of the OIA.
The GPOC and the Defence raise issues of law with which the OIA scheme is not equipped to deal. Those issues include, but are not limited to, the construction of the student contracts, the consideration of implied terms, the interpretation and application of consumer rights legislation, and the doctrine of estoppel by convention. The UCL Complaints Procedure at [1.6] states that “[l]egal representation is not permitted at any meeting held under this Procedure” and the Complaints Panel would not necessarily include any individual with legal expertise (Complaints Procedure at [6.2]).
It is submitted that this is not a case in which there is an agreement by the parties to submit their disputes to ADR. The Defence at [11(9)], [12], [13(4)], [14(6)] and [15], cites various clauses of the standard terms which refer to the UCL complaints procedure, but does not allege that such clauses oblige the student to use that procedure prior to or instead of bringing legal proceedings, nor is the stay application made on such a basis. All versions of the applicable standard terms expressly and unequivocally state that the courts of England and Wales have jurisdiction over any disputes, and none provides that the UCL complaints procedure and the OIA referral process must be used first.
It is also submitted that there are reasons of principle why a stay should not be ordered:
The two stage complaints procedure is unsatisfactory for the following reasons;
For these reasons, it is highly unlikely that either the UCL complaints procedure or the OIA referral process will lead to a speedy, cost-effective resolution which is satisfactory to all parties. These thousands of claims will almost certainly end up back before the Court when the processes of the OIA scheme have been exhausted. The consequences of requiring the Claimants to pursue their complaints through these channels will be (1) increased (irrecoverable) costs and (2) delay to the Claimants’ access to justice.”