The recent fine on the University of Sussex for free speech and governance breaches has highlighted the need to manage regulatory risk. Richard Scott, public sector client manager and head of education at Aon, explains.
In March, the Office for Students (OfS) fined the University of Sussex £585,000 after finding its governance documents failed to uphold freedom of speech and academic freedom. While this is subject to an appeal by the university, it highlights the importance of a robust approach to policies and procedures.
The investigation by the OfS was launched following protests against Professor Kathleen Stock, a senior academic at the university. After a campaign by trans rights activists and accusations of transphobia for her views on sex and gender issues, she left the university in 2021.
OfS findings
Investigating the university’s compliance with its regulatory requirements, the OfS found it had breached two of its conditions for registration, E1 and E2. As well as failing to have adequate and effective management and governance arrangements in place, the OfS found that its policy statement on trans and non-binary equality did not uphold freedom of speech and academic freedom.
Further, its report noted that the policy statement gave rise to a ‘chilling effect’, where the requirement ‘to positively represent trans people’ could result in staff and students self-censoring as they felt unable to voice lawful views that were in breach of the policy. This was supported by the experience of Professor Stock who said the policy had made her more cautious about expressing gender critical views.
Multi-million pound fines
The University of Sussex is challenging the OfS decision and fine, claiming the regulator acted outside its powers. While we await the outcome of this appeal, it’s worth considering the broader context for this investigation and fine.
This is the first fine imposed by the OfS since it was given the power to investigate complaints over free speech in January 2025 and, while it is sizeable, there’s the potential for much higher fines to be levied in the future. The maximum penalty is the higher of either 2% of a university’s annual qualifying income – tuition fees and OfS grants – or £500,000. In the case of the University of Sussex, the maximum penalty could have been up to £4.6m.
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Broader implications
There are also broader implications for universities. Although the OfS fine related to its own regulatory requirements, it also raised concerns the university policy statement may not have complied with its legal requirements under the Education (No 2) Act 1986; the European Convention on Human Rights; the Equality Act 2010; and the Public Sector Equality Duty.
Universities also need to be aware of the Higher Education (Freedom of Speech) Act 2023, which will require robust codes of practice to protect free speech when it come into force on 1 August 2025. Fail to meet the requirements and universities risk compensation, fines and, in the most extreme cases, suspension of their regulation.
As well as the legal consequences, universities should also consider the reputational risk associated with this type of case. Being seen to fail to uphold freedom of speech could damage a university’s reputation and affect its ability to attract students.
Governance guidelines
Freedom of speech is a sensitive issue, attracting concerns about how to balance it with other legal duties such as preventing hate speech, bullying and harassment. Given this, it’s important that any policies and procedures do not leave your organisation open to challenge. Similarly, failing to put such policies in place, or not amending them to reflect changes in legislation may also place universities at risk.
To ensure the right balance is struck, we recommend seeking independent legal advice to determine whether the wordings of any equality policies could potentially breach rules around freedom of speech and academic freedom. They will also be able to judge whether a policy might inadvertently restrict course content or lead to the type of self-censoring the OfS highlighted in the University of Sussex investigation.
Insurance support
Insurance is available to support institutions facing these legal challenges. Although any fines levied by the regulator are outside the scope of any form of insurance, professional indemnity (PI) insurance and directors’ and officers’ (D&O) policies can cover legal defence and appeal costs where these types of cases are brought against individual members of staff at a university. Should a case or complaint be brought by individuals rather than the regulator, legal cost together with reasonable awards for compensation may be insured.
We also recommend notifying your insurer and broker if a complaint requesting compensation and/or threatening legal action or a regulatory investigation is brought against your university, including Freedom of Information (FOI) requests received that may give rise to concern. They have considerable expertise and experience in these types of cases and will be able to support you and help to minimise any risks during this time.
Striking the right balance between freedom of speech and other legal duties such as preventing hate speech can be difficult and, if you get it wrong, extremely costly. Having a robust approach to governance will help to manage this regulatory risk and get the balance right.
More information
To find out more about how the OfS investigation affects your organisation, speak to your Aon account manager or contact Richard Scott at
[email protected]
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This article has been compiled using information available to us up to 16/06/2025
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