Firm sues Scottish Government for £200m over failed deposit return scheme

A waste firm has started legal action to recover more than £200m from Scottish Ministers over the loss it suffered from investing in the failed bottle recycling scheme. 

Lawyers for Biffa Waste Services Ltd addressed judge Lord Clark at the Court of Session on Tuesday. 

The company has decided to go to Scotland’s highest civil court because it believes the Holyrood government is responsible for it incurring a £150m loss.

It wants compensation for the money it invested in the collapsed deposit return scheme (DRS) and the subsequent loss of profit.

The firm believes the Scottish Government misrepresented the scheme when it assured Biffa it would go ahead.

The firm is said to have relied on personal assurances from Green Party co-leader Lorna Slater as a reason to invest £55m in vehicles and equipment to prepare for the DRS, before she scrapped it in June 2023.

Scotland’s DRS was scrapped after the UK Government declined a request for full exclusion from the Internal Market Act, which meant Scotland could not include glass in the scheme.

Biffa reportedly invested over £65m in preparation for DRS according to the Times newspaper. 

Slater served as minister for green skills, circular economy and biodiversity in the Government from 2021 to 2024. 

On Tuesday, during a short virtual hearing, advocate Roddy Dunlop KC told Lord Clark that he was representing Biffa. 

Advocate Gerry Moynihan KC told the court that he was acting for the Scottish ministers. 

The pair agreed that a debate should take place later this year into legal issues affecting the case. 

Earlier this year, a source told the Sunday Mail newspaper that Biffa agreed to the contract “on the written assurances of Lorna Slater about the deliverability of the scheme, and the Scottish Government’s commitment to doing it”.

They said the recycling firm believed the Scottish Government “negligently misrepresented the assurance it gave” and “made no reference to any outstanding need to seek UK Internal Market Act approval”.

A spokesperson for Biffa said: “Biffa was selected by Circularity Scotland Limited as the logistics partner for the delivery of the Scottish deposit return scheme and invested significant sums to support its timely and successful implementation.

“This was done in good faith and on the expectation and understanding that the delivery of the scheme had been mandated by the Scottish Government.

“Having carefully reviewed our position with our advisors, we can confirm that we are taking legal action to seek appropriate compensation for the losses Biffa has incurred.”

A Scottish Government spokesperson said: “The Scottish Government cannot comment on ongoing litigation.”

The DRS was supposed to boost recycling by charging a 20p deposit on every drinks container, which would be refunded through an empties return.

Biffa was appointed to collect all the recycled containers across Scotland on a ten-year deal, with the firm expecting to make more than £100m profit.

It’s understood that in the current action Biffa is seeking not only a return of its £55m but also further compensation for lost profits amounting to more than £200m. The exact figure being sought by Biffa is not yet available. 

The court heard that Mr Moynihan thinks the debate, will take place over two days. Mr Dunlop said he was “hopeful” the debate could take one day. 

Another hearing in the matter will take place sometime in the near future.