Deposit return scheme: The £200m legal battle launched today and what it could mean for SNP Government

A legal battle will today be launched against the Scottish Government for £200 million of losses in the botched deposit return scheme.

Waste management firm Biffa says it lost £55m when the government terminated its deposit return scheme, and is looking for £145m in lost profits.

Biffa had secured a 10-year deal to be the logistics firm that collected the recycled drinks containers across Scotland as part of the deposit return scheme.

The deposit return scheme collapsed over a row about including glass. | Steve Parsons/Press Association

It was also one of the largest creditors of Circularity Scotland, the firm due to manage the scheme, which went into administration. 

Two days of legal debate over this claim begins today at the Court of Session.

The deposit return scheme would have seen an extra 20p added onto all drinks containers, which would be refunded when the container was taken back to be recycled.

It was due to go live in 2023, but had to be pulled after the UK Government refused to grant the Scottish Government an exemption to the Internal Market Act unless the scheme excluded glass.

Both the Scottish and Welsh governments wanted to include glass in their recycling schemes, but the UK Government said doing this would be too complicated and expensive.

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Scottish ministers said it would have to delay the scheme north of the border until 2025 without an exemption from the Internal Market Act.

A UK-wide scheme is now planned, but in April it was pushed back until 2027.

At an initial hearing earlier this year, Biffa released a statement which 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 advisers, we can confirm that we are taking legal action to seek appropriate compensation for the losses Biffa has incurred.”

Biffa is being represented by head of the Faculty of Advocates Roddy Dunlop KC and Scottish ministers are being represented by Gerry Moynihan KC.