Judge urged to dismiss £166m case against SNP ministers over botched recycling scheme

Lawyers acting for SNP ministers have urged a judge to dismiss a £166 million compensation claim over the collapse of their botched deposit return scheme.

Advocate Gerry Moynihan KC told judge Lord Clark on Tuesday that Scottish ministers did not have a “duty of care” to Biffa, a waste management giant.

He said the former SNP-Green coalition government at Holyrood did everything it could to bring the scheme into being and Biffa had taken a “commercial risk” by investing in it.

SNP and Green ministers wanted to boost recycling rates by forcing buyers to pay an extra 20p deposit on single-use drinks containers, including cans and bottles, that would be refunded when returned.

Every outlet that sells takeaway drinks would have been required to act as a return collection point, with reverse vending machines outside supermarkets, community centres and other public places.

Biffa was appointed to collect all the recycled containers across Scotland on a 10-year deal, with the firm expecting to make more than £100 million profit.

But Lorna Slater, the Green minister in charge of the scheme, failed to get the required exemption from the UK Government from the Internal Market Act (IMA) before starting work on the scheme.

This was needed for the scheme to apply to drinks containers imported to Scotland from elsewhere in the country. Although the UK Government later said it would grant a conditional exemption, it said glass bottles could not be included.

Ms Slater then delayed the scheme until at least October 2025 despite Circularity Scotland, the company set up to administer it, making clear it could have gone ahead with just plastic containers and cans.

Legal action

Biffa has launched legal action in the Court of Session in Edinburgh seeking up to £166.2 million, arguing the Scottish Government was negligent. This includes about £115 million in projected profits that were never realised.

The waste giant has claimed that it relied on personal assurances from Ms Slater, co-leader of the Scottish Greens, when it decided to spend £55 million on vehicles and equipment to prepare for the scheme.

A two-day discussion of legal issues is taking place in the case. Roddy Dunlop KC, Biffa’s lawyer, will address the court on Friday.

But Mr Moynihan told the court: “There is a conflict between Biffa’s interest and the public interest. They (Scottish Ministers) don’t owe a duty of care to Biffa because it conflicts with their duty to pursue the public interest.”

Biffa ‘aware of the risk’

He said ministers had acted appropriately in its dealings with the firm, saying: “Anyone would know that there would be a risk that the legislation would not be enacted – that it might be altered in scope 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.”

He also argued that Scottish ministers were promoting the public interest by promoting “net zero” policies. Ms Slater left government in April when Humza Yousaf, the then first minister, ripped up the SNP’s power-sharing deal with the Greens.

A Biffa spokesman 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 spokesman said: “The Scottish Government cannot comment on ongoing litigation.” The hearing continues.