Court rejects Biffa’s £50m compensation bid over failed deposit return scheme

A £50 million claim for compensation over Scotland’s failed deposit return scheme has been rejected by a Court of Session judge.

Waste management firm Biffa won a contract as part of Scottish Government plans to bring in the scheme, and it took ministers to court when the initiative was shelved.

Biffa had been seeking £51.4 million from the Scottish Government to cover losses it said it had incurred through the failure of the scheme.

In a ruling published on Friday, Lord Sandison found against the firm.

He said in his judgment: “The court is not concerned with the question of who (if anyone) ought to be regarded as bearing political responsibility for the failure of the Scottish deposit return scheme to launch in August 2023.

“Rather, it is only concerned with the legal questions of whether the defenders owed a duty of care to the pursuer in either of the regards contended for, and, if so, whether any such duty was breached and loss was thereby caused to the pursuer.”

Biffa had argued that former Scottish Green co-leader Lorna Slater – who was the minister in charge of the project – made a “negligent misrepresentation” in a letter she sent the firm which “provided assurances in respect of the viability of the scheme”, but did not mention the Scottish Government would need an exemption from the UK Government to the Internal Market Act for it to go ahead.

The Westminster legislation governs trade between the different parts of the UK post-Brexit.

Then Scottish secretary Lord Jack refused to grant an exemption to the Scottish Government – which meant Holyrood ministers could not proceed with plans to include glass bottles in their scheme, and ultimately left them unable to bring in deposit return as planned in August 2023.

Deposit return sees shoppers charged a deposit when buying drinks, with the cash returned to them when they bring their empty cans and bottles back for recycling.

In the court case, Biffa had argued the letter of “comfort” it received from Ms Slater in May 2022 had negligently misrepresented the true level of risk facing the project as it failed to mention the need to secure an IMA exemption.

But Lord Sandison made clear he did “not accept that a reasonable person could have looked at” the letter sent by the then circular economy minister and taken it 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 therefore ruled the Scottish Government “did not breach the duty incumbent on them”, adding: “The matters which they stated in the letter were true and accurate.”

Lord Sandison said: “The pursuer’s case based on negligent misrepresentation in the letter fails in fact and law.”

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

A Scottish Government spokesperson said: “It would not be appropriate for the Scottish Government to comment on live legal proceedings.”

A Scottish Green spokesperson said what happened with the deposit return scheme showed “devolution is not working for Scotland”.

They added: “This case has shown the worst of Westminster and the contempt the Tories have for the Scottish Parliament and for our environment.

“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.

“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.”