Professional accreditation bodies are increasingly taking adverse action in respect of accreditation of higher education courses. Adverse decisions from these bodies generate significant reputational, regulatory, claims and financial risks for universities and private higher education providers. As a consequence, governing bodies of providers need to treat professional accreditation as a governance and regulatory issue in its own right, not a matter that can be delegated to management with limited governance oversight. In turn, particularly for universities, it is important that maintaining professional accreditation for courses in good standing is not left with faculties and schools, but rather incorporates necessary input from compliance, risk, legal and, ultimately, governance functions.

Providers who get it wrong face legal and regulatory exposure in the form of non-compliance with regulatory obligations, and claims, class action and associated financial risks from current and former students.

Regulatory risk

Under the Higher Education Standards Framework (Threshold Standards) 2021, providers that offer courses where professional accreditation is required for graduates to be eligible to practise must ensure that professional accreditation of the course is both obtained and maintained.

Where professional accreditation is required but revoked, a provider must cease delivering the course to avoid breaching the Threshold Standards. The cessation of a course may, in turn, cause the provider to enter into provider default.

Even where professional accreditation is not required for graduates to be eligible to practise, providers may have made representations to students and prospective students about the benefits for students and graduates of the course holding professional accreditation. Where professional accreditation is revoked, or is at risk of being revoked, this can give rise to risks of non-compliance with the Australian Consumer Law and Domain 7 of the Threshold Standards concerning representations made to students.

Where professional accreditation is withdrawn, suspended or made conditional, providers need to carefully consider the practical effect of that decision, including:

• whether, and how, the decision applies to students currently enrolled in the affected course;
• what obligations arise under the course and tuition assurance frameworks to protect those students, including transfer of enrolment and/or refund options; and
• whether the accreditation issue triggers other reporting or notification obligations to the Tertiary Education Quality and Standards Agency (TEQSA), or other regulators.

Claims and financial risks

Loss or restriction of professional accreditation can also expose providers to claims from affected students and graduates, particularly where they have relied on the accreditation of the course when choosing to enrol, or have had their career pathway disrupted by a decision that is made part-way through their studies.

Individual claims can be brought in state tribunals, Supreme Courts and the Federal Court, often framed in contract, tort and under the Australian Consumer Law.

There is also class action risk. One particular law firm has promoted and commenced several class actions arising from professional accreditation issues in recent years, involving James Cook University, the University of Western Sydney and The University of Newcastle. The class actions are also framed in contract, tort and under the Australian Consumer Law, and seek damages relating to allegedly compromised career paths (and earnings), and for stress, distress and disappointment.

In addition, where the course(s) affected by the decision involve a significant number of students, adverse professional accreditation decisions can have an impact on financial viability and sustainability, particularly for smaller private providers that have a focus in the field of education related to the courses impacted.

Reviewing adverse decisions

The reputational, regulatory, claims and financial risks to providers of an adverse professional accreditation decision are further compounded by the complexity of seeking to challenge such decisions.

Unlike adverse decisions of TEQSA, there is typically no right to seek an external review of the merits of an adverse decision of a professional accreditation provider.

Providers affected by an adverse accreditation decision are instead limited to other avenues, such as internal and/or judicial review, to ensure the accreditation body has made its decision according to law. Where internal review options have been exhausted, judicial review grounds are limited and do not involve the Court in considering whether the decision was correct or preferable on its merits. If such challenges are successful, they will most likely simply result in the matter being remitted to the professional accreditation body that made the original adverse decision for reconsideration in accordance with law.

As a result, the pathway for challenging an adverse accreditation decision is often narrower, slower and more complex than challenging an adverse decision made by TEQSA.

Managing risk

Typically, faculties and schools will have a critical role in managing professional accreditation of courses. The senior administrators and academics often know the staff of the professional accreditation provider. They will be best placed to ensure the provider is complying with the accreditation requirements and know when there is a risk of non-compliance.

However, given the significant risks involved, professional accreditation should not be left to faculties and schools alone to manage, as sometimes occurs in universities. It requires an appropriate institutional response, involving input from compliance, risk, legal and, ultimately, governance. Governing bodies of providers need to be satisfied that the provider has appropriate arrangements in place to keep professional accreditation of their courses in good standing through ongoing compliance with the regulatory requirements and intervene early when risks are first emerging. When risks crystallise into a proposed adverse decision, the provider's response should occur subject to direct governance oversight and be accompanied by appropriate notifications to TEQSA given the potential impact on compliance with the Threshold Standards.

Ultimately, providers need appropriate governance arrangements in place to maintain oversight of professional accreditation status across their course portfolio, including clear escalation pathways when an accreditation body raises concerns, so that issues are identified and addressed well before they crystallise into an adverse decision.

Providers should also ensure that a proactive, whole of institution approach is taken to monitoring professional accreditation of courses to ensure that the information being conveyed to students in this regard is current and accurate.

Universities and private providers should review the governance and management arrangements in relation to maintaining professional accreditation in good standing, to identify if any risks are emerging. Where risks are emerging, the institutional response should occur subject to direct governance oversight, given the array of institutional risks involved.

Contact us to discuss how we can help.