Alerter by Thomas Evans – Potential Group Action stayed for ADR

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The High Court has stayed a potential group action against University College London, which cancelled in-person teaching (due to industrial action and Covid-19) but without making any fee adjustments.  Whilst the High Court did not require the parties to engage in any particular form of ADR, the stay was imposed in the context of the defendant’s proposal that the claimants should submit complaints to a statutory adjudication scheme.  The stay was imposed against the wishes of the claimants, who – whilst expressing a willingness to engage in ADR – did not want to participate in the particular form of ADR proposed by the defendants.

INTRODUCTION

Between 2017 and 2022, and in common with other universities, University College London cancelled in-person tuition, and restricted access to premises, during strikes and the Covid-19 pandemic. It did not adjust tuition fees.  Over 900 students and former students, who each paid between £9,250 and £25,000pa in tuition fees, issued claims alleging breach of contract on the part of UCL, with a further 2,100 students and former students having intimated an intention to bring similar claims against UCL.  Separately, there are proceedings pending against 17 other universities, similarly arising out of industrial action and Covid-19 lockdowns.

The claimants in the UCL claims applied to the High Court for a group litigation order. In their application, they contended that a GLO could result in the disposal of a large number of claims in a single set of proceeding, and facilitate access to justice for claimants with modest individual claims.  That application was opposed by UCL, including on grounds that the claims were pleaded at an inappropriately high level of abstraction, and that in any event the individual claims were disparate in terms of differing contractual provisions, academic modules, years of study, strike dates and impacts of Covid-19.

However, UCL’s primary position was that proceedings should be stayed for a period of eight months for the purpose of ADR. It accordingly applied for a stay pursuant to CPR r3.1(2)(f).  At the heart of its application lay the fact that the claimants could utilise UCL’s internal complaints process and also the non-binding complaints adjudication scheme operated by the Office of the Independent Adjudicator (OIA), as established under the Higher Education Act 2004.

However, ADR would take time – an estimated eight months in total, allowing for the complaints to be formulated, considered by UCL and, if necessary, considered further by the OIA. In addition, the rules of the adjudication scheme operated by the OIA prevented it from considering complaints if proceedings had been issued, unless those proceedings were formally stayed.

THE STAY

The Senior Master ordered a stay for ADR of eight months. She did so over the objections raised by the claimants in respect of the OIA scheme, noting that Court will, where appropriate, stay proceedings even if one or both parties are opposed to such a course of action.  The Senior Master also noted that it was open to the parties to engage in any form of ADR during the period of the stay, and no order was made requiring the claimants to submit complaints to the OIA.

The stay was imposed in spite of the claimants’ concerns – described by the Senior Master as valid – about the adequacy of the OIA scheme, including that: (a) the scheme would not attempt to determine legal rights (with the points in dispute being inherently points of law); (b) whilst the scheme would consider the reasonableness of decisions to suspend in-person teaching and access, it was unclear if it would consider the reasonableness of charging full tuition fees in such circumstances; and (c) there was limited evidence concerning the resources of the OIA (and UCL’s internal complaints process), and whether they could process the expected volume of complaints in a reasonable period of time.

However, any imperfections in the method of ADR proposed by the defendant had to be balanced against the substantial costs likely to be incurred in a group action, the length of time which litigation would take and the fact that the claimants would not receive 100% of any sums awarded, having entered into damages-based agreements with their solicitors and funders. Echoing the words of HHJ Jarman KC in Hussain v Chowdhury [2020] EWHC 790 (Ch), the Senior Master concluded that she was “not satisfied on the information presently available that litigation is the least worse course…” available to the parties.

Further, whilst the Senior Master emphasised (at [64]) that she was not mandating the parties to attend ADR – following Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576, the Court cannot do so, albeit that this conclusion has been questioned by the Civil Justice Council in its 2021 report on ADR – she encouraged them to do so “in the strongest possible terms” [65].

However, and noting the claimants’ reservations about the prospects of a successful outcome to ADR, the Senior Master gave liberty to apply to lift the stay at the four-month mark, but stressed that any such application should be a “last resort” and be accompanied by an explanation of what had occurred [74].

In the circumstances, the Senior Master did not consider the GLO application. However, she indicated (at [76]) that the application would not have been in a position to proceed anyway, and that more information was required to enable the identification of GLO issues as well as cohorts of claimants (grouped around their respective contract terms and factual circumstances), without which the Court could not decide if there were sufficient common or related issues to justify making a GLO.

Thomas Evans, 24 July 2023

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