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One of the UK’s leading universities has agreed to pay £21mn to settle a lawsuit brought by students over Covid disruption, a watershed move that is set to put pressure on other institutions to compensate graduates.
Terms of University College London’s “confidential” agreement to settle a High Court claim from about 6,500 former students were outlined in an email to claimants from their legal team that was seen by the Financial Times.
The cohort of former UCL students is part of a much larger group of claimants across the UK taking legal action over claims that their university education was diminished by the pandemic.
Lawyers acting for 194,000 claimants said they were pursuing 36 other universities on behalf of students demanding compensation for cancelled lectures, substandard digital tuition and restricted access to libraries, laboratories and other facilities.
The closely watched UCL claim was the first case to proceed to the High Court and a trial had been due to begin this month.
The amount each student is set to receive in the settlement will vary and is due to be determined by a committee of claimants, the email said.
Legal costs and payouts to litigation funders are not specified in the email seen by the FT. Thirty-five per cent of any payout was due to pay legal fees and litigation funders financing the case under a “no win, no fee” arrangement, the FT has previously reported.
The settlement comes at a time when universities are under severe financial pressure because of a long-term funding squeeze and volatile student recruitment.
UCL and the claimants previously disclosed that a settlement had been struck, but did not reveal the terms.
Law firm Asserson, which is representing the claimants alongside Harcus Parker, said another 24,000 claimants from several universities had signed up this week, since the settlement was announced.
Claims against other universities have not been filed with the courts, but the institutions have been sent pre-action correspondence. If successful, those claims could result in a combined payout for the UK higher education sector running into hundreds of millions of pounds.
“I am delighted that this settlement provides a resolution for our clients,” Adam Zoubir, partner at Harcus Parker, said at the weekend. “This is the end of the claim against UCL, but we continue to represent tens of thousands of students who were at other universities during Covid.”
UCL said on Friday that it had reached a confidential settlement: “In doing so, UCL admitted no liability but agreed to settle so the matter could be resolved amicably and without further expense, which would have meant diverting valuable resources away from teaching, research and supporting our students.”
Michael Spence, UCL president and provost, said that during the pandemic staff “worked diligently to deliver teaching and student support in unprecedented circumstances”.
“Every decision was made to safeguard health while preserving the highest possible academic standards.”
The UCL students had called for payouts to be made reflecting the difference in value between the services promised and what they received.
As part of its defence to the case, the university argued that the move to online tuition was required by government regulation and health guidelines. It argued the pandemic was beyond its reasonable control, and that online teaching had been high quality.
In the email, claimants were told by the legal team representing them that the “details of the settlement agreed with UCL are strictly confidential. This means that you must not tell anyone or publish any details of the settlement, including the amount of money you receive.” Claimants were also asked not to share the details on social media.
The email from the legal team said: “UCL has agreed to pay a ‘global’ settlement sum of £21,250,000 to the group of around 6,500 UCL claimants and prospective claimants in settlement of all their claims.
“As per the terms you agreed when joining Student Group Claim, the claimant committee will now decide how the settlement sum should be divided between the group members who attended UCL, ie how much money each group member should receive. We will be assisting the committee in making this decision.”
The claimants’ lawyers and UCL declined to comment on the settlement sum.