Coronavirus (COVID-19) Guidance for independent schools

In addition to the guidance provided by our article covering general legal advice & FAQ's for schools, independent schools may also want to consider the following:

  • Challenges to summer term fees
  • Allowing parents more time to pay
  • Force majeure
  • Remote provision of education
  • Comparisons with other schools
  • Charity law matters – including helping the NHS; Serious Incident Reporting; ex-gratia payments; and financial concerns in the charity law context
  • Review of lettings contracts
  • Contracts with third party suppliers
  • Safeguarding
  • Parent contracts for the next academic year
  • Immigration Issues and compliance
Challenges to the summer term fees

Many schools have now communicated their fees for the summer term, and any associated reductions. The majority of schools have arrangements in place for remote learning provision.

Some schools are receiving responses from parents raising a range of issues such as challenging: the quality of the provision for the level of fee reduction; the reason for fees being payable for examination year groups where exams will not be taking place; junior/nursery provision where this is more limited than senior provision; boarding fees where there is no boarding; and whether the situation is a force majeure (see below).

There are a number of issues to bear in mind when considering the correspondence:

  • Might the correspondence constitute a complaint under the school’s complaints policy and, if so, does it need to be treated in this way? This will depend on a number of factors, including the nature of the complaint and remedy sought.
  • If there are a number of parents writing in with concerns, consider how best to manage these in a consistent way where possible, for instance developing a template response and/or Q&A document, which can then be tailored to address any particular concerns raised by individual parents.
  • The extent to which parents are justified in the issues they raise, and the merit of any legal argument they may seek to rely on, will depend primarily on a combination of the terms in the school’s parent contract, subsequent correspondence, and the remote provision which is in place.

Of course, regardless of the strength of the respective positions, it is likely that complaints and challenges will be raised by parents. Accordingly, the more schools can do to manage the messaging to bring parents on board, and to be able to demonstrate quality remote provision, the better they will be placed to respond to, or ultimately defend challenges.

Similarly, it is important to ensure that any correspondence about fee reductions are watertight from a legal perspective, particularly in relation to consumer law and the school’s parent contract.

Allowing parents more time to pay

In light of the challenging financial climate, we are seeing an increase in parents who are under financial strain, and who seek some form of leniency in relation to fee payment.

Whilst, subject to the school’s own cashflow considerations, it may be possible to offer some flexibility (for instance, paying monthly for future terms’ fees in cases where parents currently pay termly), care needs to be exercised in formally agreeing any further delay in payment.

This includes allowing time to pay overdue fees for previous terms or the current term. This is because it could be seen as extending credit to parents for the purposes of financial services legislation (assuming the school is not FCA authorised to provide credit). There are potentially severe sanctions for breach of these requirements, and therefore it is advised that advice is sought before entering into any such arrangement.

Force majeure

It is likely (but not certain) that your parent contract will contain “force majeure” or “events beyond your control” provisions, which generally include pandemic. In broad terms, the purpose this type of clause is to allow contracting parties to be excused from performance of their obligations upon the happening of certain specified events, or to provide alternative mechanisms that apply in the case of business interruption. It can therefore provide a defence to allegations of breach of contract, for instance that the school is not making adequate provision.

The extent and enforceability of any given force majeure clause will depend upon the precise wording of the contract. However, even where such clauses are in place, often the decision as to whether to notify (and therefore rely on) such clauses, is not straightforward. For instance, some force majeure provisions carry a right for parents to terminate without notice after a defined period of time where the issue (in this case, closure) continues. It is often a delicate balance of risk, taking account of both the particular contractual provisions, the extent of the provision the school is able to make, and the response from parents.

If you would like us to review your parent contract and your school’s particular circumstances, please do let us know

Remote provision of education

It is likely you already have various arrangements in place regarding the remote provision of education. Those arrangements should include delivery of educational content (taking into account the different subjects / year groups), pastoral support, and even whether there is scope for delivery of less obvious subjects such as physical education, and extra-curricular subjects in some form.

These arrangements should be kept under review and modified as appropriate. All planning and provision should be documented, as this will provide the audit trail which may help demonstrate that the school met its obligations.

Consideration should also be given by relevant staff to any individual pupil’s needs (whether these are particular learning needs, pastoral or emotional needs, or physical limitations) and how they may individually be affected:

  • by their situation (whether that is at home or in a limited school setting);
  • whether there may be issues for them in accessing the provision which has been put in place; and
  • whether any additional strategies, differentiated learning / formats, or support should be put in place to support their well-being and/or learning.

For more detailed consideration of these issues, see our safeguarding briefing.

Comparisons with other schools

While there are similarities in the issues that many independent schools are facing, and many parents are seeking to use the reductions made by other schools as a basis to challenge the fee reduction made, schools should be mindful:

  • To take care in referencing the position elsewhere, as there may be implications under competition law if a school shares commercially sensitive information with other schools with the intention of creating a unified approach regarding payment of next term’s fees. (This is different to having a general knowledge of sector trends). In any event, each school’s situation will depend on its own facts (including the parent contract and educational provision), so each school should consider its own circumstances regarding fees.
  • This is also relevant in relation to charity law duties, as trustees must act in the best interests of the charity.
Charity law matters
Community / hospital projects

We continue to hear inspirational tales of independent schools assisting those in their local community, for instance by making equipment / PPE for local NHS Trusts. This is of course a hugely positive enterprise. For those schools which are charities, it would be sensible for trustees to consider the scope of their charitable objects to ensure they are comfortable of the basis on which these actions are undertaken, so that this can be documented. To assist with this, the Charity Commission has published guidance for charities that want to help during Covid-19.

Serious incident reporting

The Charity Commission is regularly updating its Covid-19 guidance for charities. The guidance includes a section about serious incident reporting.

In summary, it is for trustees to continue to report serious incidents using the guidelines, and use their judgement to determine when an incident is significant in the context of their charity (with particular regard to incidents placing individuals at risk, or which have a significant impact on the charity’s operations and therefore harm to the charity’s work).

It could of course be argued that the temporary closure of the school itself represents a significant impact on its operation, and trustees may choose to take a cautious approach (particularly if closure means a significant loss of money, or a reputational issue arises). This is a judgement call for trustees to make as to whether or not the situation is significant in the context of the charity at this time. In many cases, this is a decision which will be kept under review as the situation evolves and the timeframes and implications for each school / charity become clearer.

As a reminder, the Charity Commission advises that you should report an incident if it results in, or risks, significant:

  • harm to people who come into contact with your charity through its work
  • loss of your charity’s money or assets
  • damage to your charity’s property
  • harm to your charity’s work or reputation

The main categories of reportable incident are:

  • protecting people and safeguarding incidents – incidents that have resulted in or risk significant harm to beneficiaries and other people who come into contact with the charity through its work
  • financial crimes – fraud, theft, cyber-crime and money laundering
  • large donations from an unknown or unverifiable source, or suspicious financial activity using the charity’s funds
  • other significant financial loss
  • links to terrorism or extremism, including ‘proscribed’ (or banned) organisations, individuals subject to an asset freeze, or kidnapping of staff
  • other significant incidents, such as – insolvency, forced withdrawal of banking services without an alternative, significant data breaches/losses or incidents involving partners that materially affect the charity

As indicated above, the requirement to report an incident to the Charity Commission is quite fact specific. If you would like to discuss the reporting requirement in your school context, please do contact us.

Fee refunds / reductions and ex-gratia payments

There has been some concern raised in our casework that reducing fees, or giving refunds to parents where further savings have been identified, may require Charity Commission consent. In most cases this will not be necessary. In cases where schools have reduced fees before they fall contractually due, or indeed communicated that a refund will be made based on savings achieved during the term at the end of that term, approval would not be required. Where no prior indication of a reduction was made, or where there is no power in the contract to amend fee levels, then advice should be sought as to whether approval is required.

Of course, any such decisions must be taken by trustees in accordance with their charitable duties, taking account of all relevant circumstances (parent relationship, retention of pupils, savings achieved, reduced offer, available resources etc), and those decisions should be carefully documented to demonstrate that on balance trustees concluded that the decisions made were in the best interests of the charity.

Financial concerns and charity law issues

In these challenging times, many independent schools are reviewing their finances, including to consider the short, medium and long-term viability of the school.

If a school is a charity, various charitable duties apply (including to manage the charity’s resources responsibly; act in the best interests of the charity; and to act with reasonable skill and care).

The Charity Commission has published guidance for charities in using reserves or restricted funds. There are also various points to check if a charity is considering borrowing money or granting security over your charity’s assets / property, and advice should be sought.

If a school / charity’s finances are particularly affected, trustees / governors should regularly take steps to analyse the future solvency of the charity and seek appropriate advice.

Review your lettings contracts

Many independent schools may have lettings scheduled to take place on the school site. These are checked for relevant termination and cancellation provisions and any force unlikely be able to go ahead from either the school or hirer’s perspective, and the contracts should be majeure clauses.

Depending on the relationship it may be that pragmatic positions can be reached between the school and hirers, and reliance on force majeure clauses may be a last resort, but each scenario will depend on a combination of the contract terms and any commercial arrangements reached between the parties.

Contracts with other third parties (e.g. suppliers)

Schools should review their arrangements with all third parties, as it is likely that there may need to be changes to these arrangements in light of the current circumstances.

The first step should be to collate and review these contracts in order to understand the school’s / the other party’s rights to terminate or suspend the contract, and any associated penalties. As with lettings, it may be that a strict interpretation of the contract is not the most pragmatic way forward with key suppliers, and may not be conducive to returning to a ‘normal’ working relationship in the future. That said, any agreed variations require careful documentation, in order to ensure that the school’s position is appropriately protected. Please do let us know if you would like to discuss any contractual arrangements.

Safeguarding

The change to school provision has brought various safeguarding issues to the fore, both in relation to pupils who continue to attend school, and those who are at home.

For detailed guidance about safeguarding considerations, please see our safeguarding briefing.

Parent contracts for the next academic year

In order to alleviate the financial pressures associated with Covid-19, there may be a focus on the recruitment of pupils for the next academic year.

While usual admission arrangements generally involve a parent visiting the school site / meeting with staff and/or the pupil doing so (for instance, to be interviewed or complete an assessment), this may be problematic at present.

Therefore, when liaising with future parents / pupils, it is worth bearing in mind the law regarding ‘distance contracts’. This is a complex area of consumer law and largely untested in the independent schools’ sector. However, where a contract is a ‘distance contract’, certain information must be provided to the consumer (e.g. a parent) including a right to cancel within 14 days. If this information is not provided, the period allowing a right to cancel the contract is significantly extended. While such arguments can be countered, it is best practice to seek advice early on in the admission arrangements to be clear as to the school’s position.

Immigration Issues and compliance

This period of lockdown has given many organisations an opportunity to review their systems and processes, which can be very useful for organisations in terms of their immigration compliance. For organisations who hold a sponsorship licence, this period may allow the perfect time to review right to work checks and to spend time navigating the sponsor management system (SMS).

Key questions to ask are:

  • Are all your key personnel still working and able to check the SMS if required? If members of your team have been furloughed it may be possible that you cannot either update or log on to the SMS.
  • Has your organisation issued Confirmation of Acceptance of Studies to students who can no longer travel?
  • Are you concerned about the impact of Brexit on sponsored students and workers?
  • Are your sponsored student’s files, personal details and contact details up to date?
  • Are your right to work checks up to date?

Ensuring that you are entirely compliant will mean that should you have an unexpected UKVI visit once schools return you are ready.

Stone King offers an audit service which can be conducted remotely. This is an opportunity for a mock UKVI visit, to identify any key compliance issues and to support in ensuring systems and processes are effective. For any queries please contact Julie Moktadir.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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