Biffa’s £51.4m deposit return scheme claim rejected by court

Biffa’s £51.4m lawsuit against the Scottish Government over the failed deposit return scheme (DRS) has been thrown out by the Court of Session.  

The waste management firm claimed that it was negligently misled by Scottish ministers that the scheme would go ahead, but this was rejected by Lord Sandison. 

In July 2022, Biffa was awarded a 10-year contract as the scheme's official logistics provider by Circularity Scotland, a non-profit company established to run the DRS.   

Biffa had claimed that a letter from former circular economy minister and Green MSP Lorna Slater made guarantees that the DRS would go ahead, leading to the firm investing millions of pounds. 

However, Lord Sandison rejected the firm's interpretation, describing it as “wishful thinking”.  

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

Over the 10-year contract, Biffa had expected to make £114.8m in profits. 

It argued that the cost of the initial investment and of the projected profit was lost 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.  

UK ministers said the exemption would only be granted if Slater dropped glass collection from the scheme and accepted standardised labelling and a uniform deposit charge across the UK. This would have brought Scotland’s scheme in line with plans for England and Wales. 

However, Slater argued there was a lack of detail around the conditions set out by the UK Government, and the scheme was delayed until “at least October 2025”. It has since been postponed to sometime in 2027. 

Circularity Scotland argued that the scheme could have proceeded if it had accepted the demands from UK ministers. It then went into administration weeks after Slater’s announcement, with debts and liabilities of more than £86m, and its contract with Biffa was terminated.   

Lord Sandison said that a “reasonable person” could not have believed the ministerial letter gave “any assurance as to the legislative sufficiency of the scheme”. 

“I do not accept that a reasonable person could have looked at the words used in the letter and taken them either as amounting to a general statement that there was no risk that the scheme would not be proceeding and that all would be well,” he said. 

“Something much more than the wishful thinking upon which the pursuer’s case appears to proceed in this regard would be required, indeed something approaching the alchemy capable of transmuting base metal into gold, so far are the words used from the meaning which the pursuer requires.” 

Lord Sandison also rejected the waste management firm’s claim that the Scottish Government “deliberately sought to conceal” potential issues with the Internal Market Act. 

A spokesperson for the Scottish Greens said: “This case has shown 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 topple the scheme against the will of the Scottish Parliament underlines the urgent need for our country to have the same powers as every other self-governing nation.” 

A spokesperson for Biffa said: “We note today’s decision and are reviewing our position with our legal advisors.”