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Bob was a student and received a stipend grant for his living expenses whilst doing research at an academic institution for post-graduate studies. He came to rely on these for his monthly living expenses and did not realise that their continued remittance was contingent on his remaining enrolled in the course. A couple of years later he has dropped out of his course, and the better part of a year later he receives a letter from his university notifying him that he had been overpaid the last £10000 odd worth of living stipend in error due to interruption in studies, and requesting him to repay those £10000 through an online portal at his earliest convenience. Bob does not have these £10000 to hand, and doesn’t know how long it would take him to earn back and repay all of these monies but knows that it would cause quite a strain on his finances which was a hardship that he was not counting on facing, and apparently only had to due to the university’s error.

Whats is the legal position here, in either direction, and whether criminal or civil?

Would I be correct in surmising that there would be no criminal ramifications to failing to repay the sums?

I would think that the worst that Bob could face would be civil recovery of the sums paid out in error by the university in a civil claim.

But would Bob have any tendencies of damages whether for the full sum, or a lesser one, in respect of the inconvenience and financial strain caused to him by the university’s error as well?

Primarily looking for England and Wales, and would request folks from deferring answers for other jurisdictions until an answer explaining the English/Welsh position is already posted.

TylerDurden
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2 Answers2

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Overpayments from the Student Assistance Program are recoverable by the government. The Social Benefits Tribunal, however, has discretion to vary or defer the amount recoverable. Typically this is exercised when recovery would impose extreme hardship on the recipient.

The recipient would have no counterclaim. The arguments you propose as a counterclaim are properly arguments towards the tribunal to exercise its discretion to lower the amount repayable.

Failure to pay what is found to be recoverable can result in civil enforcement, including garnishment of other sources of money or seizure and sale of property.

Jen
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Both the university and Bob made mistakes, with the consequence that Bob received more money than he should have received. Apparently:

  • the university didn't notice Bob had dropped out and therefore shouldn't have been paid;
  • Bob didn't know or forgot the terms of the stipend and didn't notice the deposits in his bank account that he shouldn't have received.

Were it not for the mistakes, Bob would not have been paid all that money. Bob was 'unjustly enriched' (the cause of action) and the university can seek 'restitution' (the remedy) - some or all of the money to be paid back to it (perhaps with interest too). Unjust enrichment doesn't necessarily mean there was dishonesty.

If this all occurred within the six years prior to the claim, there's no part of the claim that is time-barred.

If Bob and the university fail to reach a settlement then the university may decide to sue Bob. The court might (or might not) decide to order Bob to pay some or all of the money. If Bob can't pay it all at once then there will be some other arrangement ordered. If Bob doesn't abide by the order then he commits contempt of court.

With regard to criminality, Bob's behaviour could amount to theft if Bob knew or ought to have known he should not have received the deposits made in error. Some people have been convicted of theft who treated money mistakenly deposited in their accounts as their own money.

Lag
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