Waste company’s £51 million claim over delay to deposit return scheme rejected by Outer House

About this case:

• Citation:
  [2026] CSOH 3
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Sandison

Biffa Waste Services Ltd sought a payment of £51.4 million against the Scottish Ministers in respect of losses it claimed to have suffered due to the postponement of the scheme, claiming that a letter of assurance from the relevant minister was a negligent misrepresentation. The defenders argued that the letter did not give rise to a public law legitimate expectation and therefore should not give rise to the consequences proposed by the pursuers.

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

Substantial risk

The pursuer was appointed by Circularity Scotland Ltd, the appointed scheme administrator, as the logistics provider for the scheme on 18 July 2022. When the pursuer contracted with CSL, the scheme was expected to go into operation on 16 August 2023 with a longstop date of 15 August 2024. However, CSL ultimately went into administration on 20 June 2023 after the UK government indicated it was minded not to allow glass containers to form part of the scheme, the defenders announced a delay of the scheme to at least October 2025, and the drinks industry withdrew funding from CSL as a result.

It was claimed by the pursuer that, while negotiating with CSL, it became concerned about the outlays it may not recover if the scheme did not proceed as planned but was assured by a letter dated 17 May 2022 from Lorna Slater MSP, then the minister for the circular economy, that the defenders were committed to delivering the scheme. They averred that, had the defenders exercised reasonable care in providing those assurances, they would have recognised that the scheme required an exclusion under the Internal Market Act 2020 to function. By omitting that information, the assurances given in the letter were rendered misleading.

The pursuer advanced a separate case based on breach of a duty of care owed by the defenders because of their particular responsibility and knowledge in respect of the IMA exclusion, which only they could apply for. The defenders maintained that the letter of 17 May 2022 was requested by CSL to provide reassurance about their commitment to the scheme. The pursuer’s investment was a risk it chose to take on a commercial basis, and reliance on the letter to the claimed extent would be unreasonable.

Following evidence, the Dean of Faculty submitted that the evidence of Ms Slater showed a complete lack of appreciation of assessment of risk. She sought wrongly to place the blame on the UK government and repeated on multiple occasions that the Scottish Parliament had withheld legislative consent for the IMA as if that were justification for not engaging with it. Had the pursuer been told the IMA position was a substantial risk to the scheme, it would not have signed the contract.

Metal into gold

In his decision, Lord Sandison began by observing: “It is important to note at the outset that the court is not concerned with the question of who (if anyone) ought to be regarded as bearing political responsibility for the failure of the Scottish deposit return scheme to launch in August 2023. Rather, it is only concerned with the legal questions of whether the defenders owed a duty of care to the pursuer in either of the regards contended for, and, if so, whether any such duty was breached and loss was thereby caused to the pursuer. It follows that the matters of law and fact which are truly relevant to the decisions that require to be made form only a limited subset of the wide range of issues dealt with in the evidence led and in the submissions made.”

He continued: “The immediate difficulty for the pursuer, as it accepts, is that the letter expressly advances no matter of fact which was untrue. The pursuer is therefore compelled to argue that the words used, in the light of the surrounding circumstances, were such as to create a false impression in the mind of a reasonable reader in its position, and having the same known characteristics, and did in fact create that impression in its corporate mind.”

Considering what a reasonable person would derive from the letter, Lord Sandison said: “The defenders were, quite properly, keeping themselves at some remove from the negotiations between the pursuer and CSL. They had previously refused to involve themselves in the scheme to the extent actually wanted by the pursuer and CSL, involving guarantees or other public funding, and a letter was seen as a compromise between what was desired and what was achievable. The pursuer did not even ask for the letter, which Mr Topham described as ‘unsolicited’, and was unaware that it was to receive it until it was informed of the fact very shortly beforehand by CSL. The terms of the letter were similar to the terms of the letters previously issued by the First Minister to scheme stakeholders generally.”

He added: “I do not accept that a reasonable person could have looked at the words used in the letter and taken them either as amounting to a general statement that there was no risk that the scheme would not be proceeding and that all would be well. Something much more than the wishful thinking upon which the pursuer’s case appears to proceed in this regard would be required, indeed something approaching the alchemy capable of transmuting base metal into gold, so far are the words used from the meaning which the pursuer requires.”

Lord Sandison concluded: “The question is not whether the defenders should in some sense have undertaken a wider responsibility to the pursuer, but whether, objectively viewed, they did do so. So viewed, they did not. The nexus or proximity between the parties, created by the defenders’ choice to issue the letter of 17 May in the terms in which it was written, did not – objectively viewed – extend beyond those terms.”

Decree of absolvitor was therefore granted in favour of the defenders.