Biffa’s £51.4 million lawsuit against the Scottish Government regarding the failed Deposit Return Scheme (DRS) has been dismissed by the Court of Session.
The waste management company claimed it was misled by Scottish ministers into believing that the scheme would proceed. However, Lord Sandison rejected this claim.
In July 2022, Biffa was awarded a 10-year contract as the official logistics provider for the scheme by Circularity Scotland, a non-profit organisation established to manage the DRS.
Biffa argued that a letter from former circular economy minister and Green MSP Lorna Slater guaranteed the DRS would move forward, leading the company to invest millions of pounds. Lord Sandison, however, deemed the firm’s interpretation as “wishful thinking.”
Biffa claimed it invested £51.4 million in preparation for the scheme’s launch, which included expenditure on vehicles, equipment, infrastructure, and a depot in Motherwell. Over the 10-year contract, the company projected a profit of £114.8 million.
However, when the scheme was shelved in June 2023 due to a dispute between the Scottish and UK Governments over exemptions from the Internal Market Act, Biffa argued that this investment and projected profit were lost.
UK ministers stated that the exemption would be granted only if Slater removed glass collection from the scheme and accepted standardised labelling and a uniform deposit charge across the UK. This would align Scotland’s scheme with plans for England and Wales.
Slater contended there was insufficient detail concerning the conditions set by the UK Government, and the scheme was delayed until “at least October 2025.” It has since been postponed to October 2027.
Circularity Scotland claimed that the scheme could have proceeded had it accepted the demands from UK ministers. Shortly after Slater’s announcement, Circularity Scotland went into administration with debts exceeding £86 million, and its contract with Biffa was terminated.
Lord Sandison stated that a “reasonable person” could not have interpreted the ministerial letter as providing any assurance regarding the legislative viability of the scheme. “I do not accept that a reasonable person could have looked at the words used in the letter and taken them as a general statement suggesting there was no risk that the scheme would not proceed and that everything would be well,” he remarked.
Additionally, Lord Sandison dismissed Biffa’s claim that the Scottish Government intentionally sought to conceal potential issues related to the Internal Market Act.
A spokesperson for the Scottish Greens commented: “This case has highlighted the worst of Westminster.” They added: “MSPs voted to introduce a recycling scheme, with businesses investing money to make it happen. There are bottles, cans, and glass littering our parks, beaches, and streets. This scheme would have led to more of them being recycled.
“Devolution is not working for Scotland. The fact that one person in Westminster was able to dismantle the scheme against the will of the Scottish Parliament underscores the urgent need for our country to possess the same powers as every other self-governing nation.”
A spokesperson for Biffa stated: “We acknowledge the decision and are reviewing our position with our legal advisors.”
Caption: Biffa was awarded a 10-year contract as the scheme’s official logistics provider by Circularity Scotland in July 2022
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