Scottish Government asks judge to dismiss £200m deposit return scheme lawsuit

A Scottish Government lawyer wants a judge to dismiss a £200m claim over the failed deposit return scheme.

Advocate Gerry Moynihan KC told judge Lord Clark on Tuesday that Scottish Ministers do not have a “duty of care” to Biffa Waste Services Ltd.

Mr Moynihan is acting for the Government in an action brought against it by waste management company Biffa.

The business has decided to go to the Court of Session in Edinburgh because it believes the Holyrood government is responsible for it incurring a £150m loss.

It wants compensation for the cash 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 company 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 axed 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.

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

On Tuesday, Mr Moynihan told Lord Clark at the start of a two-day long debate that the outcomes of previous similar cases supported his view that the action should be dismissed.

The lawyer told the court that the law stated on the issues highlighted in the action showed that governments needed to act in the public interest and were free to change policy according to circumstances.

He said Scottish Ministers had done everything in its power to bring the scheme into being.

Mr Moynihan said that Biffa knew this and had taken a “commercial risk” in its investment in the scheme.

He said the Scottish Ministers were promoting the public interest by promoting “net zero” policies.

Mr Moynihan said that the Scottish Ministers had acted appropriately in its dealings with Biffa.

He added: “Anyone would know that there would be a risk that the legislation would not be enacted – that it might be altered in scope in nature and it could be abandoned.

“Biffa would be aware of the risk of change and would conduct itself appropriately.

“Biffa had insurance.

“Biffa on the face of it had made provision for that risk.”

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.

Current proceedings in the Court of Session are a two day debate concerning legal issues in the case. The second day of the hearing is expected to take place on Friday when Biffa’s lawyer, Roddy Dunlop KC, will address the court.

On Tuesday, Mr Moynihan told the court that the Ministers don’t have a duty of care to the firm.

He added: “There is a conflict between Biffa’s interest and the public interest.

“They (the Scottish Ministers) don’t owe a duty of care to Biffa because it conflicts with their duty to pursue the public interest.”

The hearing continues.