Waste company entitled to sue Scottish government over delay to Deposit Return Scheme

About this case:

• Citation:
  [2025] CSOH 9
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Clark

Biffa Waste Services Ltd, which committed around £51.4 million towards implementation of the DRS, sought costs and lost profits from the Scottish ministers based on a duty of care owed to them. An alternative case was made that they had relied upon a letter sent to them in May 2022 by the responsible minister, Lorna Slater MSP, which turned out to be a negligent misrepresentation. The defenders sought dismissal of the action on the grounds of no duty of care being owed, or alternatively irrelevance.

The case was heard by Lord Clark in the Outer House of the Court of Session, with the Dean of Faculty, Roddy Dunlop KC, and McWhirter, advocate, appearing for the pursuer. Moynihan KC, Reid KC, and Arnott, advocate, appeared for the defenders.

False and misleading impression

It was not disputed that the implantation of a DRS was a Scottish government policy, the framework for which was set out in the Deposit and Return Scheme for Scotland Regulations 2020. Under this framework, on 18 July 2022 Biffa entered into a contract with Circularity Scotland Ltd, the scheme administrator, to become the logistics provider for the DRS.

Before entering into the contract, Biffa sought assurances as to the deliverability of the DRS. On 17 May 2022, Lorna Slater MSP, minister for green skills, circular economy and biodiversity, wrote on behalf of the defenders to Biffa’s CEO. In the letter, the minister referred to the defenders’ “unwavering” commitment to delivering the DRS and said that Biffa entering into the contract with CSL was “a major vote of confidence” that would increase momentum towards successful delivery.

On 7 June 2023, a delay to the DRS was announced until at least October 2025 due to difficulties obtaining an exclusion for the DRS from UK-wide market access rules. Biffa averred that the decisions to delay created significant uncertainty and that producers refused to fund CSL given the position taken by the Scottish government. The delay led to CSL entering administration, and the termination of Biffa’s contract.

The pursuer averred that the defenders owed a duty of care due to their unique knowledge of the need for Internal Market Act approval, a fundamental step towards the deliverability and viability of the DRS. Their failure to alert the pursuer to this requirement before assuring them that the DRS would be implemented was a breach of that duty. Alternatively, the letter of May 2022 created a false and misleading impression and amounted to misrepresentation.

For the defenders it was submitted that their decision to proceed as they did was non-justiciable because it was part of a delicate political process of conducting inter-governmental relations. There can be no liability if the decisions that were taken fell within the ambit of a reasonable exercise of discretion. Regarding the May 2022 letter, on no reasonable reading did it assure the pursuer that the DRS was entirely deliverable.

Assumption of responsibility

In his decision on this preliminary issue, Lord Clark began: “The issues now to be addressed are whether the pursuer has a relevant case on assumption of responsibility and, if so, whether to impose the duty of care would be inconsistent with the legislation. In assessing assumption of responsibility, it is necessary to consider whether there was reliance, and indeed reasonable reliance, on the responsibility said to have been assumed.”

Turning to the assumption of responsibility, he said: “The defenders’ challenges to the pursuer’s position raise some important points, but I am not persuaded that they show the pursuer’s pleaded case on assumption of responsibility must necessarily fail. The pursuer’s averment that it and the Scottish Ministers were in a unique relationship which was akin to a contract cannot be ruled out as unprovable, given the role of Biffa as the only logistics provider for the DRS and thus being integral to the delivery and success of the DRS.”

He continued: “The defenders had the duty to seek the exclusion under the IMA and so it may be reasonable for the pursuer to rely on the Scottish Ministers to perform that task with reasonable care. It is important to have proper regard to how the letter could, arguably, also support the pursuer’s position on reasonable reliance. As is accepted by the defenders, the proper interpretation of the letter is a matter to be determined at a proof.”

Lord Clark added on the alternative case: “At this stage in the case, it is not possible to conclude that the pursuer was aware of facts which contradicted the representation or from which it can be inferred that it did not rely on the representation. On these submissions, nothing further arises beyond the points already considered above about reliance and reasonable reliance on the alleged assumption of responsibility. It follows that this is a matter on which the pursuer’s case will not necessarily fail.”

He concluded overall: “There are a number of challenges made by the defenders to the pursuer’s case, which raise questions of some significance and importance. While it can be possible in certain cases to deal with these issues at a debate and dismiss the action, to do so would require it to be clear that the pleadings do not disclose circumstances giving rise to a duty of care and that the pursuer’s case must necessarily fail even if all of the pursuer’s averments are proved. For the reasons given above, I have decided that these tests are not met.”

The defenders’ first plea-in-law was therefore repelled, with the case proceeding to proof before answer.