A court has ruled that Biffa Waste Services can proceed with its £166 million legal claim against the Scottish government over the abandoned deposit return scheme (DRS), which was initially planned for launch in 2023.
Legal Action Against the Scottish Government
In June 2023, Scottish ministers postponed the implementation of the deposit return scheme, citing a dispute with the UK government. Biffa, which was hired to collect and process recyclable containers for the initiative, argued in the Court of Session that the Scottish government had assured the company that the scheme would proceed, causing it to incur significant losses when the plan was ultimately canceled.
Biffa is seeking up to £166.2 million in damages, alleging that the government acted negligently and breached its duty of care by claiming the scheme was viable before it was delayed. The waste firm claims that the delay caused substantial financial harm, including both direct costs and lost profits.
The Court’s Ruling
In a written statement, Lord Clark ruled that the case could move forward, as the company’s claim revealed potential circumstances giving rise to a duty of care. The court dismissed the government’s argument that the case should be thrown out as irrelevant, stating that Biffa’s financial losses were a legitimate issue to be examined in court.
To succeed in its claim, Biffa will need to prove that it relied on a written assurance from former Green minister Lorna Slater regarding the viability of the scheme. Additionally, it must demonstrate that the government’s actions caused financial losses, including £115 million in projected profits over a 10-year contract with Circularity Scotland, the non-profit company set up to manage the scheme.
The claim also includes approximately £50 million in expenses Biffa incurred preparing for the scheme, such as purchasing vehicles and hiring staff.
Background of the Deposit Return Scheme
The deposit return scheme was initially a key policy of the SNP-Green coalition government after the 2021 elections. Under the proposal, a 20p deposit would be added to all single-use drinks containers made from PET plastic, metal, or glass. Consumers would then be able to reclaim their deposit by returning the containers to retailers or reverse vending machines.
Originally scheduled for launch in August 2023, the scheme faced multiple delays due to concerns from businesses and a lack of agreement with the UK government. Conservative ministers in Westminster insisted that the scheme conform to a UK-wide approach, excluding glass from the deposit system, which led to further setbacks. In June 2023, Slater announced that the launch would be delayed until at least October 2025, accusing the UK government of sabotage.
The latest timeline suggests that Scotland may not introduce the scheme until October 2027 at the earliest, when the UK government plans to roll out its own version. However, Wales has decided to pursue a separate scheme that includes glass.
Financial Impact and Government Response
The Scottish government has spent £168,000 on legal fees related to the case brought by Biffa, according to a recent Freedom of Information request. The government has declined to comment further on the ongoing legal matter.
A spokesperson for Biffa expressed satisfaction with the court’s decision, saying, “We are pleased to have received approval from the Court of Session to proceed with legal action to seek appropriate compensation for the losses Biffa has incurred.”
Scottish Conservative MSP Maurice Golden criticized the Scottish government’s handling of the deposit return scheme, stating, “The SNP-Greens’ hopelessly botched and abandoned deposit return scheme leaves taxpayers wide open to a huge compensation payout.”
