Court throws out £50m claim over failed bottle return scheme

A court has thrown out a £50m lawsuit against the Scottish government over its failed deposit return scheme (DRS).

Waste firm Biffa claimed a letter from the former Scottish Greens co-leader Lorna Slater in 2022 was akin to a guarantee the plans would go ahead – prompting them to invest millions in the scheme which collapsed a year later.

They alleged the detail in the letter was a misrepresentation of the government’s position at that time and sought £51.4m in damages.

However, judge Lord Sandison rejected the claims, describing the way Biffa interpreted the letter as “wishful thinking” on a par with trying to turn “base metal into gold”.

A spokesman for Biffa said it was “reviewing its position with its legal advisers”.

The Scottish government said it could not comment on ongoing legal proceedings.

Ministers were forced to drop proposals for a Scotland-specific bottle return scheme in June 2023 following a dispute with the UK government.

Under the plans, shoppers would be charged an extra 20p to buy products in a single-use bottle or can, which would be repaid when returned to machines.

Biffa held talks with the Scottish government over becoming the main logistics partner.

In May 2022, Slater, who was then circular economy minister as part of the Greens power-sharing agreement with the SNP, wrote to Biffa after being forced to delay the start date by a year.

Biffa said it later signed a 10-year contract with Circularity Scotland, the now-collapsed firm set up to run the DRS, as a “direct result” of that letter.

The company claimed the letter was an assurance ministers had taken “all necessary steps to ensure the viability and deliverability of the scheme” at the time.

But the UK government then denied the DRS an exemption under the Internal Market Act, which would have allowed it to proceed in full.

A more limited version of the DRS, which excluded glass, was given approval.

It later emerged Scottish government officials had been aware of the potential issue in 2021 and had known in March 2022 that an application for an exemption would be required.

Biffa claimed it was “disingenuous in the extreme” for Slater not to mention that in her letter.

The former Scottish secretary, Alister Jack, agreed, describing it as “utterly irresponsible” to encourage investment without mentioning the “huge level of risk”.

Slater said the letter was not a project update which detailed that risk and was simply designed to reassure the firm that the Scottish government was still committed to the plans.

In his ruling at the Court of Session, Lord Sandison said a “reasonable person” could not have believed the letter gave “any assurance as to the legislative sufficiency of the scheme”.

He said if Biffa wanted more information about potential legal hurdles with the scheme, they should have asked for it, but “no such enquiries were made”.

Lord Sandison also denied Biffa’s claim the Scottish government “deliberately sought to conceal” potential issues with the Internal Markets Act.

He added Slater “genuinely held on at least colourable grounds” the belief that an issue with the Act was “unlikely actually to pose a problem for the scheme”.

Lord Sandison said he believed Slater and Lord Jack had given evidence “truthfully and good faith”.

A spokesperson for the Scottish Greens said the case had shown “the worst of Westminster”.

They added: “MSPs voted to introduce a recycling scheme, with businesses investing money to make it happen.

“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.”