Biffa Sues Scottish Ministers for £160 Million Over DRS Failure: Court Allows Case to Proceed.

Biffa Waste Services Limited has initiated a £160 million lawsuit against the Scottish Ministers, claiming negligence and negligent misrepresentation linked to the failed Deposit Return Scheme (DRS). The company asserts that the Scottish Ministers had a duty to protect the DRS under the Internal Market Act 2000 (IMA), but failed to secure an exclusion from the UK government in time, which led to a significant loss for Biffa.

Biffa’s complaint revolves around the government's failure to inform them about the necessity of an IMA exclusion for the DRS to fully proceed. In addition, the company argues that the Scottish Ministers' failure to request or secure this exclusion undermined their efforts to implement the scheme.

The lawsuit also includes an allegation of negligent misrepresentation based on a letter received in May 2022 from a Scottish Minister. Biffa claims the letter provided assurances regarding the DRS but did not mention the critical requirement of an IMA exclusion, leading them to invest £55 million in vehicles and equipment for the program.

Lord Clark of the Court of Session has allowed Biffa's case to move forward, citing the company’s reasonable reliance on the assurances given by the Scottish Ministers. The court will assess whether a special relationship existed between Biffa and the Scottish government that created a duty of care.

The court will also consider whether the letter from May 2022 constituted negligent misrepresentation, based on its full context, and whether Biffa reasonably relied on it in making its investment decisions.

Biffa’s legal representatives, led by Gerry Moynihan KC, argue that the loss sustained by the company was directly linked to these alleged failures. The Scottish Government has previously sought to have the case dismissed, with no judgment yet on the merits of the claim.

The DRS initiative, aimed at reducing plastic waste by implementing a deposit system for drink containers, was cancelled in June 2023 after the UK Government rejected a request for a full exemption from the Internal Market Act. As a result, Scotland could not include glass in the scheme, effectively derailing its implementation.

Key Points:

• Biffa seeks £160 million in damages over failed DRS.
• The company claims negligence and negligent misrepresentation.
• The court allows the case to proceed to a proof before answers hearing.
• Biffa’s £55 million investment in vehicles and equipment for the DRS is at the heart of the claim.
• The Scottish Government’s handling of the IMA exclusion and assurances in a 2022 letter are key issues in the lawsuit.

Biffa Waste Services Limited’s £160 million lawsuit against the Scottish Ministers highlights significant concerns about governmental responsibility and miscommunication. Biffa claims that the Scottish Ministers failed to secure an exemption from the Internal Market Act 2000, a critical step for the implementation of the Deposit Return Scheme (DRS). The company argues that it relied on assurances from the Scottish Government, particularly a letter from May 2022, which omitted any mention of the necessity for an IMA exclusion. This oversight allegedly led to Biffa’s substantial financial loss.

The court’s decision to allow the case to move forward demonstrates the importance of holding public authorities accountable for their actions, particularly when private businesses make substantial investments based on governmental promises.

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