Oxford case: (1) students as consumers

cmaThis is the first of five (or more) articles that will focus on detailed issues that arise from the judgment in the case of Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200 (Pat). This article will discuss what the judge said about whether students are consumers, for the purposes of consumer protection legislation.

As mentioned in an earlier article, IP Draughts is cherry-picking “headline” comments from the judge that he thinks will interest readers of this blog, rather than going through all of the judge’s careful and detailed reasoning. Readers who have responsibility for compliance with consumer law, eg those updating a university’s IP policy, will wish to read the judge’s detailed comments (or take advice on them).

Relevant law

The law in force in the UK at the relevant time, and which the judge discusses, was the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR), which implemented an EU directive. The latest version of the UK’s consumer protection law is to be found in the Consumer Rights Act 2015 (CRA), which also implemented a (different) EU directive, referred to below as UCTD. IP Draughts has not studied whether there are any relevant and significant differences between current law and the UTCCR, but his working assumption is that there are none for present purposes. He notes that the definitions of consumer in each law are:

UTCCR section 3(1): “consumer” means any natural person who, in contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession

CRA section 2(3): “Consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession

CMA guidance – undergraduate students as consumers

The judge mentions guidance given by the UK Competition and Markets Authority on contracts with students. It is worth quoting some of the judge’s comments about this guidance. Paragraph numbers in quoted text are those used in the BAILII version of the case report, linked above.

345. …In 2015 the United Kingdom Competition and Markets Authority (“CMA”) published two advice documents directed at higher education providers and students respectively: UK higher education providers – advice on consumer protection law Helping you comply with your obligations. (12 March 2015 CMA33) and Higher education Undergraduate students: your rights under consumer law (12 March 2015 CMA33(a)). They were published before the changes made by the Consumer Rights Act 2015 and set out the views of the CMA on the applicability of consumer legislation to undergraduates at that time. The advice for UK higher education providers noted that this guidance had been prepared following the findings of the Office of Fair Trading’s (OFT’s) Call for Information (CfI) on the higher education (HE) undergraduate sector in England and further work it had undertaken into potential consumer protection issues in the UK HE sector. The advice was given after “constructive engagement with a range of stakeholders” who had been consulted. There is nothing in that guidance which suggests that objections were made by universities and higher education institutions or organisations acting on their behalf to treating undergraduates (normally) as consumers in so far as their entitlement to invoke the statutory protection was concerned.

377. …the advice given by the CMA to the effect that an undergraduate is a consumer vis a vis a university or higher education institution is plainly correct. An ordinary undergraduate student contract is not the provision of services to the undergraduate as a future prospective trader as the contract was in Benincasa/Gruber.

388. It is true that there may be some courses that are taken as part of professional practice where the contracting party is not the student at all but (for example) their employer. That may be particularly the case for certain kinds of professional diploma. In those circumstances, the contract would not be made with a consumer and the student’s employer could reasonably be expected to ensure that the terms are fair without the need for special protection. But those would not be a typical undergraduate course or indeed a typical DPhil. [Comment: an example that springs to IP Draughts’ mind is the course for qualifying as a notary that is run (only) through UCL Laws.]

Are DPhil (PhD) students also consumers?

391. I have set out at length the approach to dealing with employees and undergraduate students and can now come to the ways in which DPhil students share relevant similarities and differences.

398. I also think that making decisions as to whether an individual was or was not a consumer based on whether they received funding for one or more aspects of their study is undesirable and may create distinctions between students which do not seem to make a great deal of sense in this context.

410. I therefore consider that a DPhil student is normally entitled to be treated as a consumer under the UCTD and that it does not matter for this purpose whether the student is undertaking that educational qualification with a view to her career, profession and/or professional advancement.

413. I must consider as well whether there are other features of Mr Jing’s situation which mean that he should not be treated as a consumer with respect to his DPhil contract.

425. In my view, first DPhil students are prima facie to be treated as consumers within the meaning of the UCTD and second Oxford has not shown that Mr Jing’s circumstances were such that it would be wrong to treat him as a consumer in entering into the DPhil Contract he did.

426. However, some of these considerations are nonetheless relevant to whether the terms in the DPhil Contract are unfair because the closer a DPhil student is to an employed researcher in actual work and status, the less unfair it is to treat the DPhil student in the same way as one would treat an employed researcher as I discuss in the next section.

The judgment considers in detail the EU and UK case law, and other factors, that led the judge to decide that Mr Jing was a consumer. It looks like it was not an easy decision to take, particularly given that Mr Jing was for some of the relevant time an employee (intern) rather than a student, and given that his research was focused on the development of an instrument that had commercial potential. At one point the judge comments on the lack of previous case law to guide him. IP Draughts wonders whether a future court (eg if this case is appealed, or if another case is brought) will agree with the judge’s careful thought process and conclusion on where the dividing line falls between consumer and non-consumer work, particularly in the case of vocational degrees.

The door is left open for a university to argue, on the facts of another case, that a student is not a consumer. IP Draughts wonders, for example, about PhD studentships where the student is an employee of a sponsoring organisation, and remains an employee during their studentship. Such arrangements are increasingly popular. Although the student would be required to follow university rules, this feels more like a commercial relationship involving their employer, and might fall on the other side of the line.

In the next article in this series, IP Draughts will consider the judge’s general comments on the question of fairness in dealing with university students who are consumers.

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