Biffa's £166m lawsuit against Scottish Government over collapsed DRS begins

The legal battle between waste firm Biffa and the Scottish Government over the collapse of Scotland’s deposit return scheme (DRS) has begun at the Court of Session today. 

The company, which is seeking £166m, was awarded a 10-year contract as the scheme's official logistics provider in July 2022 by Circularity Scotland, the non-profit set up to run the DRS.  

Biffa claims £51.4m was invested in preparing for the scheme’s launch, including spending on vehicles, equipment, infrastructure, and a depot in Motherwell.  

The firm expected to make around £115m in profits over the 10-year contract with Circularity Scotland.  

Scotland's DRS was shelved in June 2023, weeks before it was due to begin, following a dispute between the Scottish and UK governments over an exemption for the scheme from the Internal Market Act.  

The UK Government refused to let the scheme go ahead unless the Scottish Government agreed to conform to the preferred UK-wide approach which excludes glass.  

Then circular economy minister Lorna Slater argued the lack of detail around the conditions set out by UK ministers meant the Scottish DRS could not go ahead.  

Circularity Scotland argued that the scheme could have gone ahead in line with the UK Government’s demands.  

The non-profit company folded shortly after the Scottish Government’s decision to shelve the scheme, with debts and liabilities of more than £86m, and its contract with Biffa was terminated.  

The firm is claiming negligence and breach of duty of care.  

In court summons, Biffa argued it was given “clear assurances” from Slater that the scheme would go ahead, citing a letter sent by the former minister in May 2022 that reinforced the government’s commitment to the plans.  

The waste company said it signed the contract with Circularity Scotland as a “direct” result of the letter, and that ministers had “taken all necessary steps” to ensure its delivery.  

The Scottish Government said the assurances in the letter were neither “new nor unique”, and its lawyers argue that Biffa was taking a commercial risk and should have been aware of the legal challenges involved. 

An attempt to have the case thrown out by the government was dismissed by the Court of Session in January. Lord Clark ruled that “the date on which the Scottish Government sought an exclusion from the Internal Market Act is a matter in dispute between the parties” and “questions remain” over the losses claimed by Biffa. 

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

In January, a freedom of information request revealed that the Scottish Government had spent £168,000 on legal fees related to the case.