Biffa sues Scottish Government for £55 Million over failed DRS

Biffa, appointed as the logistics partner for the DRS by scheme manager Circularity Scotland Limited (CSL), invested approximately £55 million in new trucks, equipment, and infrastructure to support the implementation of the scheme.

The company was in the process of hiring new staff when the Scottish Government announced a two-and-a-half-year delay to the DRS, following a dispute with the UK Government over the necessary exemptions to the UK Internal Market Act.

A spokesperson for Biffa commented to Resource: "Biffa was selected by Circularity Scotland Limited ("CSL") 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. Given the legal action, we are unable to comment any further at this time."

Reports suggest that Biffa had proceeded with its investments after receiving assurances from then-circular economy minister Lorna Slater. The company believes the Scottish Government "negligently misrepresented the assurance it gave" and "made no reference to any outstanding need to seek UK Internal Market Act approval."

Circularity Scotland, which went into administration following the DRS collapse, now owes more than £70 million, with £65 million due to Biffa. Administrators have warned that unsecured creditors are likely to receive only a nominal dividend.

The Scottish Government recently announced that the DRS would be delayed until 2027, aligning with the timeline for the UK-wide scheme.

The Scottish Government has stated that it cannot comment on ongoing litigation.