If you treat people like customers, don't be surprised if they behave like customers

Universities - and lawyers - are preparing for a rise in litigation as fees change students' expectations, reports Harriet Swain.

In 2003, six students received £10,000 each in damages from Rycotewood College, a further education establishment in Oxfordshire.

A county court ruled that their higher national diploma course on historical vehicle restoration had failed to deliver what the prospectus promised. Further damages of up to £4,750 were awarded to students who had dismantled their cars and, due to course limitations, had been unable to put them back together. The court concluded: "These claimants did not have the pleasant and agreeable time that they had hoped for and legitimately expected at Rycotewood."

For the administrators dealing with a growing number of student complaints, the past few years have probably not been pleasant and agreeable either. According to Ruth Deech, the independent adjudicator for higher education, the number of complaints received by her office has trebled in a year. A Times Higher inquiry under the Freedom of Information Act last summer found that students had brought almost 6,000 cases under formal complaints procedures over the previous three years, rising from 1,840 in 2002-03 to 2,799 in 2003-04 - and that institutions had been forced to pay out more than £300,000 in compensation or refunds.

The shadow hanging over these statistics is the introduction of top-up fees in September. Students have already been quicker to complain since the introduction of tuition fees, and they are likely to become even keener to secure value for money.

Deech says that many of the complaints her office receives are from international students who have paid a large amount of money to study in the UK and cannot face going home without the grade they had hoped for.

Mature students, who have more financial responsibilities than their younger counterparts and have often given up careers to study, are also among those who complain. She says that fees are not so much of an issue for younger complainants but may become so after September.

Fees have created a different relationship between student and institution.

In making his judgment on Rycotewood, Judge Charles Harris QC drew on a case in which a man had been awarded damages for disappointment in failing to get the extra-deep swimming pool he had ordered. Describing the course as a commercial purchase, the judge said: "I see no reason why a man should not be compensated for his disappointment in not receiving the education he desired."

David Palfreyman, bursar of New College, Oxford, and author of The Law of Higher Education , to be published in August, says the effect on institutions of increasingly commercial attitudes towards higher education in Britain is beginning to mirror the US situation. There, teams of in-house lawyers crawl over every university transaction, terrified by the possibility of the institution being sued. Oxford University has already considered introducing a contract setting out what it requires of students - a move Palfreyman argues is more likely to increase bureaucracy than head off complaints. He says: "A student will say: 'You said I had to do this research but you also said you would provide reasonable teaching and I don't think you did'."

Michael Shattock, a director of the MBA in higher education management at London's Institute of Education, says that when he was at Warwick University ten years ago it was rare to have to deal with a student complaint. Now some universities are handling between 100 and 200 every summer. He says it isn't just because students are paying more. One reason is the modular system, which makes for a more complicated academic environment with more potential for problems - exams are administered by a number of different departments, for example, which can make it difficult to ensure fairness. Another reason is a changing climate in which people are ready to complain about unsatisfactory services in all sectors of their life - be it a bad haircut or what they feel is a wasted three years spent studying for a degree.

Although most complaints are resolved without money changing hands, institutions' concerns about having to make large pay-outs are justified.

In 2001, Wolverhampton University settled out of court after Mike Austen, a 58-year-old former airline pilot, complained about the quality of his law course. He was awarded £30,000.

The National Union of Students has warned that students may consider legal action against universities if their degrees suffer as a result of striking lecturers refusing to mark essays and exams this summer - at potentially huge cost to institutions.

The people who aren't complaining about any of this are the lawyers. Higher education law is becoming an increasingly sought-after specialism, with at least one major law firm recently headhunting a higher education expert in a move more commonly associated with highly paid commercial lawyers.

Despite this, John McMullen, head of education and employment at Watson and Burton LLP, says fewer than a dozen prominent firms can claim to run successful higher education teams.

But those firms that have built up their knowledge base over the years are reaping the benefits. McMullen says: "Universities are very intelligent clients. They like to instruct law firms that have a real interest in the sector and a real knowledge of how it works."

John Boardman, joint head of the education group at Eversheds, says the higher education section in his company has increased its turnover by about 20 per cent a year over the past few years and he expects this to continue.

At the same time, it is becoming more common for institutions to employ one or more in-house lawyers.

When universities bring in legal consultants, they should expect to pay between £1,000 and £2,000 a day, according to Paul Pharaoh, head of the education team at Martineau Johnson. This is in line with other kinds of consultancy service. The annual spend on legal services by an institution will also vary considerably, from about £10,000 for a small further education college to hundreds of thousands of pounds for a large higher education institution.

The money is being spent on a huge range of services: human resources, intellectual property, technology transfer, relationships with local businesses, contracting-out services, estates management, property transactions, health and safety issues, residential developments - the list is endless. "A big university is a big business," Boardman says.

While these kinds of activities are nothing new for universities, their scale and complexity is, according to Sue Holmes, chair of the Association of University Administrators. "Twenty years ago people thought they were fantastic if they built a 150-bed hall of residence. Now we are talking 2,000 beds." This is why the legal profession is becoming interested in the sector, she says. "The volumes of money we spend can be significant."

Deech accuses some lawyers of being a little too eager to make money out of the sector. "There is a bit of ambulance chasing going on," she says. "I think it's deplorable that when legal aid money is so tightly controlled students should be using it to take action against their institutions." She adds that this defeats the purpose of the Office of the Independent Adjudicator, which should be able to handle most complaints without outside legal intervention.

Pharaoh says Deech may have a point in some cases but that in others legal involvement can benefit all sides: "We like to think we know how to make a helpful contribution." In any case, lawyers are unlikely to go away. Not only are institutions bracing themselves for more complaints post-fees, but new opportunities for legal involvement are developing. Plagiarism is one area in which higher education is breaking new legal ground, Holmes says.

McMullen points to mergers and joint ventures with other institutions as growth areas, along with intellectual property. And globalisation requires lawyers to operate on an international scale, Boardman adds.

There is an upside for universities, however: all these lawyers will have to train somewhere.