Waste firm given go-ahead to sue government

A judge has ruled that a £166m legal claim against the Scottish government over the failed deposit return scheme can go ahead.

Ministers effectively dropped plans for a Scotland-specific bottle return initiative in June 2023 following a dispute with the UK government.

Biffa Waste Services, which had been hired to collect recycled containers, argued in the Court of Session that ministers assured it the scheme would go ahead - and lost out when it was cancelled.

Ministers denied the firm's arguments and said the case should be thrown out of court.

Biffa, which is seeking up to £166.2m in reparations, says the government breached a duty of care and was negligent when it claimed the scheme was viable.

In a written statement, Lord Clark said ministers had been unable to convince him that Biffa's pleadings "do not disclose circumstances giving rise to a duty of care".

The judge also dismissed an argument from ministers that even if the court did accept they had been negligent and had a duty of care, the case should be thrown out because Biffa's case was "irrelevant" to the legal arguments it made.

He said that to win damages the waste firm would have to convince the court there was a duty of care, that it was breached and that it caused financial losses.

Biffa would have to prove that the firm relied on a written assurance given by former Green minister Lorna Slater about the scheme's viability, and that this led to financial losses.

Lord Clark said "questions remain" about the costs incurred by Biffa, and the amount of future profits it lost out on.

The judge said there should now be a full hearing to examine the arguments in more detail.

Biffa's financial claim includes about £115m in projected profits over a 10-year contract with Circularity Scotland, a non-profit company funded by the drinks industry which was supposed to manage the scheme.

It collapsed with debts and liabilities of more than £86m when the initiative was postponed.

Biffa is also seeking about £50m it said it spent in preparation for the scheme - including buying vehicles and specialist equipment, leasing vehicle depots, processing sites and taking on extra staff.

The deposit return scheme was a headline ambition of the former SNP-Green administration at Holyrood following the 2021 election.

Under the plans, a 20p deposit was be added to all single-use drinks containers made of PET plastic, metal or glass. Consumers could reclaim the deposit by returning the containers to retailers or to specially-designed reverse vending machines.

It was due to be introduced in August 2023 but the launch date was pushed back, with then first minister Humza Yousaf citing concerns from businesses.

A further stumbling block came when Conservative ministers at Westminster refused to grant the scheme the go-ahead unless it conformed to a UK-wide approach excluding glass.

In June 2023 Slater said she had no choice but to delay the scheme until at least October 2025, accusing the UK government of sabotage. She left government last year following the collapse of the Green-SNP power-sharing agreement.

Scotland is not expected to have a deposit return scheme until October 2027 at the earliest, when the UK government aims to launch its own version of the scheme, excluding glass.

Holyrood ministers are expected to align their return scheme to match Westminster's version, though Wales has pulled out of a UK-wide approach because it wants to include glass.

Following a freedom of information request, the Scottish government revealed earlier this month that it had spent £168,000 on legal fees related to the case brought by Biffa.

A spokesperson said it could not comment on live litigation.

A spokesperson for Biffa said: "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 said: "The SNP-Greens' hopelessly botched and abandoned deposit return scheme leaves taxpayers wide open to a huge compensation payout."