The London School of Economics has agreed an out-of-court settlement with a former researcher after a row over his academic freedom and the commercialisation of university research.
On the eve of a tribunal hearing, the LSE made an undisclosed payment to Thanos Mergoupis, who lost his research post when a commercial sponsor prematurely pulled the plug on a £250,000 contract with the university, saying that it was unhappy with the quality of the work. Mr Mergoupis argued that the sponsor pulled out of the deal because it did not like his findings and that the LSE had a duty to protect his job and academic freedom by enforcing the contract and securing his salary.
The LSE confirmed that it had settled the case. It also said that it would "closely monitor" its contracts with commercial partners to ensure that the university and its staff were protected.
The THES reported in January 2001 that Mr Mergoupis and his research assistant at the Centre for the Philosophy of Natural and Social Science were made redundant when the World Travel and Tourism Council, a travel industry lobby group, withdrew research funding halfway through a three-year contract. The project, to study the economic and social impact of tourism, began in 1998. In September 1999, WTTC vice-president described one research paper as "completely inadequate".
The WTTC denied that it withdrew its funding because the LSE was not coming up with the findings it wanted. Its concern, it said, was about the methodology. The research "wasn't quite hitting the spot", it said.
After the WTTC withdrew the funding in April 2000, the LSE received legal advice that confirmed that the university had strong grounds to enforce the contract and to seek damages to compensate for the premature loss of funding. But the LSE did not dispute the decision to withdraw at the time, so enforcement action was doomed.
Mr Mergoupis, now at Queen's University, Belfast, said that the LSE's failure to act decisively lost him his job and denied him the protection he was entitled to under the 1988 Education Act. The act allows academics to put forward unpopular and controversial opinions without putting their jobs in jeopardy. The LSE argued that it was clear in his contract that if the funding were lost, his job would go - irrespective of the law on academic freedom.
The LSE said in a statement: "The LSE has always been sympathetic to Mr Mergoupis's concerns and is satisfied that it properly followed its procedures when dealing with Mr Mergoupis's complaints while he was in the LSE's employment.
"The LSE took legal advice at the time on the practicalities of enforcing its contract with the WTTC and was advised that, although prima facie there were grounds for pursuing a claim for breach of contract, it was unlikely that such a claim would succeed. Taking into account the potential cost of litigation, the LSE concluded that proceedings should not be commenced against the WTTC.
"However, the LSE appreciates that there is a need to closely monitor the way it is represented in its contractual relationships with third parties in order to ensure a consistency of approach. In this case, the LSE accepts that following the WTTC's initial indication that it wished to cease funding, the events that followed inadvertently may have been perceived to have compromised Mr Mergoupis's academic freedom in some way; although it should be noted that Mr Mergoupis was never prevented from publishing the results of his WTTC-sponsored research."
Colwyn Williamson is coordinator of the Council for Academic Freedom and Academic Standards, which has supported Mr Mergoupis. He said: "This is a landmark victory for Thanos Mergoupis. Other universities should follow the LSE in promising to be more careful about the strings attached to private funding. Every researcher must be protected by the principle of academic freedom. The whole higher-education sector must pledge that, no matter where the funding comes from, research will not be halted by commercial pressure."