The Independent School sector is extremely competitive. The most important competition (and there are many competitions) is the competition for students. The mathematics is quite simple; the more students, the more revenue; the more revenue, the more building projects, the more resources, the more opportunity and most importantly (and it can’t be underestimated) the more job security. Interestingly, these facts alone give weight to the question:
“Are independent schools a school and a business, or a business that sells an education?”
The concept of ‘selling’ an education (because regardless of a person’s responsibilities at an Independent School, every staff member has an aspect of sales in their role) includes promoting a school through various mediums such as printed brochures, prospectuses, social media posts, web-sites and videos just to name a few. These resources are integral to selling a school’s message to attract students. So, like any other business in Australia, it is extremely important that the material schools produce and publish to promote themselves is accurate and most importantly, does not fall foul of the misleading and deceptive conduct provisions of the Australian Consumer Law.
What is Misleading and Deceptive Conduct and Why is it Applicable to Schools?
Misleading and deceptive conduct is, as the name suggests, conduct that is misleading and deceptive or is likely to mislead or deceive. Specifically, section 18(1) of the Australian Consumer Law (which is Schedule 2 to the Competition and Consumer Act 2010 (Cth)) states:
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Section 18(1) may only contain 23 words, but it, along with its predecessor, s52 of the now long repealed Trade Practices Act 1974 (Cth), has been one of the most litigated provisions of Australian legislation over the past 45 years. In short (and not to deliberately downplay the legal complexity of these 23 words), there is a very strong argument to suggest that Independent Schools fall within the scope of s18(1). That being the case, there is an equally strong argument to suggest that a parent who is considering an Independent School education (and not a parent who is not considering an Independent School education) would have jurisdiction to bring an action against an Independent School if they felt that the school had misled or deceived them in some way.
How Could a School Mislead or Deceive a Parent?
It is not uncommon for school promotional material to contain stunning colour photographs of beautiful grounds and spacious ovals, state-of-the-art buildings, students with radiant smiles, talented students playing sport and musical instruments and text that is full of praise for its staff and the opportunities available to its students. Is this material misleading or deceptive or likely to mislead or deceive? If it is what is referred to as ‘puffery’ (that is, wildly exaggerated or vague) then it will more than likely not be misleading or deceptive. That said, like many legal questions, it is not necessarily that easy and will largely turn on the individual circumstances of each case.
The decision of ACCC v Black on White Pty Ltd t/a Australian Early Childhood College (AECC) provided some useful commentary in relation to misleading and deceptive conduct so far as it relates to educational institutions. In short, AECC published brochures, booklets and leaflets that represented that a number of its courses offered in 1997 had Vocational Education, Training and Employment Commission of Queensland accreditation when at the relevant time it did not have that accreditation. Specifically in relation to the employee of AECC who had knowledge of the misleading material, the Court held:
“Here at the relevant time, particularly having regard to the Fourth Respondent’s position in the company in relation to accreditation and liaison, his knowledge as to the state at which the accreditation process had reached, his knowledge of the contents of the promotional material, and its distribution, and, I infer, his knowledge of the importance of the question of accreditation, I am satisfied that he was knowingly concerned in the accreditation misrepresentations, in the sense that I indicated immediately above.”
The Relevance for Schools and Take Home Message?
The Marketing Departments of Independent Schools are fast paced and work in a highly competitive market producing a significant volume of promotional material, frequently ‘on the run’. Marketing Departments also place significant reliance on material that is supplied to them by other Departments within their school. Whilst it would be very uncommon for a school to knowingly mislead as was the case in AECC, it is nonetheless imperative that school’s have a robust internal procedure of checking and cross-checking with the provider of the information to ensure that the information they publish (be it in print, social media or video format) is accurate and correct and can in no way be misleading or deceptive.
For more information contact our Education Special Counsel, Ben Foley.