Judge rules Biffa can continue with £160m case against Scottish Government
A judge has ruled that waste management company Biffa can proceed with suing the Scottish Government for about £160 million following the collapse of the deposit return scheme (DRS).
Lawyers representing the Government had attempted to have the case dismissed, but Lord Clark ruled it can go ahead at the Court of Session
Biffa's lawyers say Lorna Slater, the green co-leader who was a minister at the time, 'negligently misrepresented' the state of the scheme which led to the company investing significantly.
In their legal arguments, they highlighted a letter from Ms Slater to Biffa's chief executive in May 2022, which set out ministers' 'unwavering commitment' to deliver the DRS in August 2023.
However, the Scottish Government changed its plans when UK ministers used the Internal Market Act (IMA) to rule glass bottles could not be included.
A UK-wide DRS is not expected to begin before 2027.
Lord Clark said the date on which the Scottish Government sought an exclusion from the IMA is a 'matter in dispute between the parties'.
Circularity Scotland, which was set up to administer the Scottish DRS, fell into administration in June 2023 and Biffa's contract was terminated.
The company said it expected to make profits of £114.8 million over 10 years through the contract and it invested £51.4 million in assets like sorting machines as it prepared for the 'go live' date.
The Government's lawyers have previously said the decision by Biffa to start spending money on the scheme was a 'commercial risk' the company had 'chosen to take'.
They denied Ms Slater had made any 'negligent misrepresentation' and said ministers did not owe a duty of care to Biffa.
In his ruling on Tuesday, Lord Clark said the case would not be dismissed.
He said: 'On the first part of the claim, for the pursuer to succeed at the proof the court will have to be satisfied on the following points: there was an assumption of responsibility; the duty was not inconsistent with the statutory powers and duties of the defenders; the pursuer relied, and reasonably relied, upon the defenders' conduct; the breaches of duty occurred; and the loss was caused by the alleged breaches.
'On the alternative case on negligent misrepresentation, the pursuer mainly requires to prove that the pursuer's contention on the proper interpretation of the letter, when viewed in its full context, is correct, and that the pursuer relied, and reasonably relied, upon it, causing the loss of costs.
'Questions also remain in play about the amount of loss on costs and profit which the pursuer can establish.'
A Scottish Government spokesperson said: 'The Scottish Government cannot comment on live litigation.'
Scottish Conservative MSP Maurice Golden said: 'The SNP-Greens' hopelessly botched and abandoned deposit return scheme leaves taxpayers wide open to a huge compensation payout.
'Biffa and others in the recycling and drinks industry spent a fortune preparing for a scheme that they repeatedly warned was fatally flawed.
'Yet they were ordered to comply with it by ministers who insisted it would go ahead, right up until the 11th hour.
'At the last count, the Scottish Government had spent £168,000 of public money defending this compensation claim, but that will be a drop in the ocean compared to the tab taxpayers will have to pick up if Biffa are successful in their claim.'
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