Driving lesson refunds: the one clause every instructor contract must have

Block booking works well for both sides. The pupil prepays for 10 or 20 lessons, usually at a discount, and you get the money upfront and a pupil who is committed to the diary.

Until the pupil stops halfway and asks for their money back.

When that goes wrong, it's nearly always for the same reason: nobody wrote down what happens if the pupil stops before the block is used up. The pupil assumes the unused lessons come back in full. The instructor assumes they don't. Both get annoyed, and the instructor finds out their position is weaker than they thought.

This guide covers what the law says, a refund clause you can adapt, and how to handle a request once it arrives.

This is general guidance, not legal advice. If you're in an active dispute, talk to a solicitor.

DVSA now expects a written refund policy

DVSA's new mandatory code of practice, due to be introduced sometime between late 2026 and early 2027, says you must make sure your pupils understand your terms of business, and those terms must include your cancellation policy and your refund policy. You should give them to pupils in writing before lessons start. The same code says you must account for and protect money paid to you, particularly when lessons are paid for in advance.

The current voluntary code already asks instructors to tell pupils, on or before the first lesson, the terms under which lesson fees may be refunded.

So a written refund policy is about to stop being optional.

What the law says

Two pieces of consumer law matter here.

Consumer Contracts Regulations 2013. These cover distance contracts (booked online, by phone or by message, with no face-to-face meeting) and off-premises contracts. For a service, the consumer can cancel within 14 days of the day the contract is made. Two details catch instructors out:

You shouldn't start lessons inside those 14 days unless the pupil has expressly asked you to. If they asked and then cancel, they pay a proportionate amount for the lessons already delivered.
If you didn't give the pupil the required information about their right to cancel, they pay nothing for lessons delivered in the cancellation period.

Refunds after a cancellation must be made within 14 days of being told.

Consumer Rights Act 2015. A service must be performed with reasonable care and skill. If it isn't, the pupil can require you to put it right, or, if that's not possible or not done, claim a price reduction, which can be up to the full price. Part 2 of the Act also says an unfair term in a consumer contract isn't binding on the consumer. That's the test your refund clause has to pass.

Without a written clause

After the cooling-off period, no statute sets how much a pupil gets back for unused lessons if they simply decide to stop. It comes down to the contract. If the contract says nothing, you're arguing from general contract law about what was agreed and what you actually lost, and that argument often ends up in front of a district judge.

What you can't do is keep the lot. The Act's list of terms that may be unfair includes one requiring a consumer who doesn't go through with the contract to pay a disproportionately high sum "for services which have not been supplied" (paragraph 5). Keeping every penny of 10 undelivered lessons is hard to defend.

Why the clause matters

A good refund clause does three jobs.

It sets expectations. The pupil knows at signup what happens if they stop: what comes back, what's deducted and why. Pupils who know the rule are far less likely to argue about it.

It gives you something to point to. When a pupil asks for a full refund, you can show them the term they agreed to, provided it's fair.

It protects your cash flow. You know what you'd have to hand back if a pupil leaves, so you can plan around it.

A clause you can adapt

Adapt the numbers to your business, but keep the structure.

Refund policy for block bookings

Cancelling in the first 14 days. You can cancel your block booking within 14 days of buying it for a full refund. If you asked for lessons to start within those 14 days, we'll deduct the standard price of the lessons you've had.
Stopping after 14 days. If you decide to stop after the first 14 days for a reason that isn't our fault, we'll refund the unused lessons, less:

(a) a one-off £15 administration fee to cover the cost of processing the refund; and

(b) the block discount on the lessons you've had. Those lessons are recharged at the standard single-lesson price, because the discount applies to a completed block.
If we fall short. If lessons weren't delivered with reasonable care and skill, or we didn't provide the service we agreed, tell us and we'll put it right. If we can't, you're entitled to a refund under the Consumer Rights Act 2015, up to the full price of the affected lessons. Please raise concerns with us first.
If we end the lessons. If we stop teaching you for any reason other than your conduct, we'll refund all unused lessons in full, with no deductions.
If we end the lessons because of your conduct. If we stop teaching you because of unacceptable behaviour (for example abuse, repeated no-shows or damage to the car), we'll refund the unused lessons less any fees you owe under our cancellation policy and any costs you've caused. We'll set out in writing what we've deducted and why.
After you pass. If you pass your test with lessons left, we'll refund them on the same basis as clause 2.
Transferring instead. If you'd rather, and we agree, unused lessons can be transferred to someone else, such as a sibling, instead of refunded.
Complaints. If you're unhappy with a refund decision, contact us first. If we can't agree, you can get free advice from the Citizens Advice consumer service.

Why each part is there

1: the first 14 days

This restates the statutory right for pupils who booked at a distance. You can't contract out of it. Putting it in the clause shows you know the law and sets up the rest.

2: stopping after 14 days

This is where most instructors have nothing written down. Two deductions are included.

An admin fee. Keep it close to what a refund actually costs you. A flat fee per refund is easier to justify than a charge per lesson, because processing one refund costs about the same whether it's 2 lessons or 8. A fee far above your real cost starts to look like the "disproportionately high sum" the Act's grey list describes.

Losing the block discount. The pupil got a lower price for committing to the whole block. Recharging the lessons they've had at your standard price reflects what they would otherwise have paid. It only works if your standard price is published and the pupil could see it when they bought the block.

You could write "no refunds after 14 days", but that invites a finding that the term is unfair, and an unfair term isn't binding on the pupil. You'd be back to arguing without a clause.

3: service failure

This restates the pupil's Consumer Rights Act remedies. Including it shows you aren't trying to sign away their statutory rights, and asking them to raise concerns first gives you a chance to fix things before they escalate.

4: you end the lessons

If you're the one who ends it, the pupil has done nothing wrong and should get everything back. The Act's grey list flags terms that let a trader keep sums for services not yet supplied where the trader dissolves the contract (paragraph 7), and terms that let the trader keep the consumer's money without a matching obligation when the trader cancels (paragraph 4). This clause keeps you clear of both.

5: the pupil's conduct

This covers the difficult cases. You can deduct what the pupil owes and the costs they've caused, but not keep the whole balance as a penalty. A term making a consumer who breaks the contract pay a disproportionately high sum is on the grey list too (paragraph 6).

6: after the pass

It's tempting to say unused lessons are lost once the pupil passes. But the lessons weren't delivered, and a term keeping payment for services never supplied is exactly what paragraph 5 describes. Treat it like any other early finish.

7: transfers

Some pupils who ask for a refund are happy with a transfer to a sibling or friend. It costs you little and keeps the money in the diary.

8: complaints

A clear route for complaints gives the pupil a next step that isn't "see you in court". DVSA's new code also requires your terms to say how pupils can make a complaint.

Fairness under the Consumer Rights Act

A few principles decide whether a refund term will stand up:

Transparent. The Act requires written terms to be in plain, intelligible language and legible.
Not one-sided. Under section 62, a term is unfair if, contrary to good faith, it causes a significant imbalance in the parties' rights and obligations to the consumer's detriment.
Proportionate. Deductions should reflect your real costs, not punish the pupil for leaving.
Balanced. If the pupil loses money when they cancel, you should owe them something equivalent when you cancel.

The template aims to meet all four. If a court finds a term unfair, the pupil isn't bound by it, and you lose the protection you were relying on. A fair clause is in your interest.

Putting it into practice

Writing the clause is the easy part. Making sure pupils see and agree to it is where instructors slip up.

Put it in your terms. A clearly labelled section of your pupil terms: "Refund policy for block bookings".
Include it in the confirmation. When a pupil buys a block, the confirmation email should include the refund policy or a summary with a link. For bookings made at a distance, the Consumer Contracts Regulations require you to confirm the contract on a durable medium such as email.
Get it accepted. Ask the pupil to confirm they've read the refund policy before they pay. Without that, it's hard to prove they saw it.
Mention it in person. If a pupil buys a block in the car or over the phone, give them the headline: "Blocks are discounted, and if you stop early you get the unused lessons back less a small admin fee and the discount. I'll email you the full policy."
Keep the record. Keep a record of when each pupil accepted your terms.

Handling a refund request

Find out why

Ask the pupil why they want to stop. Common reasons:

"I'm moving away"
"I can't afford to carry on right now"
"I've found an instructor who's cheaper or closer"
"I don't think you're the right instructor for me"
"I've decided not to learn to drive for now"

The reason tells you which part of the policy applies. Moving away is an ordinary early finish under clause 2. "You're not the right instructor" may hide a service complaint you should deal with first.

Check your records

When did they sign up? Are they still inside 14 days? How many lessons have they had? Did they accept the refund policy?

Do the maths

Take a 10-lesson block sold at £400 (£40 a lesson), with 4 lessons taken and 6 unused, and no discount to claw back:

Unused lessons: 6 × £40 = £240
Admin fee: £15
Refund: £225

Now suppose the standard single-lesson price is £44, so the block carried a discount:

Lessons taken, recharged at £44: 4 × £44 = £176
Paid: £400
Left after recharge: £400 − £176 = £224
Admin fee: £15
Refund: £209

Put it in writing

Send the pupil the breakdown. It shows you're being straight with them, and it gives you a paper trail if the dispute goes further.

Hi [name], thanks for letting me know you want to stop. Here's the refund under the block booking policy you agreed to on [date]:

You bought a 10-lesson block for £400

You've had 4 lessons

The 6 unused lessons come to £240

Less the £15 admin fee, your refund is £225

I'll send it back to your original payment method within 5 working days. Let me know you're happy with this and I'll process it.

Pay promptly

Once agreed, refund within the time your terms promise. If the pupil cancelled under the 14-day right, the legal deadline is 14 days. A slow refund is often what turns a polite request into a complaint.

Handle pushback calmly

"I should get a full refund." Show them the clause they agreed to, explain what the deductions cover, and ask whether they have concerns about the lessons themselves.

"The admin fee is too much." If it's threatening to escalate, waive it. £15 is less than the fee to start a court claim.

"The lessons weren't good enough." That's a Consumer Rights Act issue. Ask for specifics. If the concern is genuine, a full refund of the affected lessons is usually cheaper than a fight.

"I'm reporting you to Trading Standards." Trading Standards investigates businesses that break the law, and Citizens Advice is clear that it won't get individual consumers a refund. If your policy is fair and you've applied it, there's little for them to act on. Keep your records ready and carry on processing the refund under your policy.

If it goes to small claims

A pupil who wants their money back can make a money claim through the county court. The court fee is £35 for a claim up to £300 and £50 for £300.01 to £500, with further fees possible if it goes to a hearing.

Your position is much stronger if you have:

A written refund policy
Evidence the pupil agreed to it
A calculation that keeps only what you can justify
Messages showing you tried to settle it first

The best defence is not getting there. A clear, fair policy and a calm reply settle most refund requests.

Where Orbit fits

Orbit keeps the records a refund conversation depends on. When a pupil books through your Orbit booking page, they tick to accept the booking terms and, if you've set one, your cancellation notice period, and Orbit records the date they accepted. When you record a block booking, Orbit tracks how many lessons are left in it and keeps the pupil's balance up to date as lessons are taken, so you can see what's unused at a glance. See pupil management and card payments.

Card payments taken through Orbit go into your own Stripe account, and you refund them from your Stripe dashboard. You still need to write your refund policy and send it to pupils yourself.