Why is the SNP government facing £170m worth of court action over recycling scheme?

The political fallout from the Scottish Government’s troubled bottle return scheme is considerable, but the legal fallout could be just as serious.

A waste management company is suing the Scottish Government for nearly £170m over a failed scheme.

The High Court in Edinburgh was told that Scottish ministers were negligent when they claimed the scheme would work.

But government lawyers said the company was aware of the risks involved and the claim should be dismissed.

The program was originally scheduled to launch in August 2023, but had previously been delayed.

It follows a previous dispute with the UK government, which refused to approve the scheme unless it complied with a UK-wide exclusion of glass.

The company managing the scheme, Circularity Scotland, collapsed. The company, a not-for-profit company funded by the drinks industry, collapsed with debts and liabilities of more than £86m.

One of its main creditors, Biffa Waste Services, is currently suing the Scottish Government.

The company, which was appointed to collect the containers for recycling, is seeking compensation of up to £166.2 million. This includes estimated profits of around £115m from the 10-year contract with Circularity Scotland.

The remainder totals around £50m, with Biffa saying its spending to prepare for the scheme includes purchasing vehicles and specialist equipment, leasing vehicle warehouses, processing space and hiring additional staff.

In a court summons, Biffa argued that “clear assurances” had been given to him by former Greens minister Lorna Slater, who left the government following the incident. SNP-Green Power Sharing Agreement Ends – The program will continue.

The company cited a letter sent by Slater in May 2022 underscoring the government’s commitment to the plans.

Biffa said the contract it signed with Circularity Scotland was a “direct” result and believed ministers had “taken all necessary steps” to ensure the contract could be delivered.

However, the government said the assurances in the letter were neither “new nor unique”.

Its lawyers said Biffa was taking a business risk and should have been aware of the legal challenges involved.

The first half of two days of court arguments took place on Tuesday. The next meeting is expected to be on Friday before the judge considers a ruling.

If Biffa succeeds, it could leave a sizable hole in the government’s finances.

Alternatively, a government victory in court could cost major employers money.

Many countries use deposit return schemes to encourage people to recycle beverage containers such as bottles and cans.

Under a government scheme, a 20p deposit will be required on all single-use drinks containers made of PET plastic, metal or glass.

Consumers can recoup their deposits by returning the containers to retailers and hospitality venues that sell such single-use products for takeaway, or to specially designed reverse vending machines.

Ministers across the UK have been working on a four-nation plan in recent months, but it has been delayed by two years to October 2027.

Lorna Slater said she had no choice but to delay the deposit return scheme and accused Tory ministers at Westminster of sabotage.

one Scottish Government review Reports starting in March 2023 said the scheme was fraught with problems months before the British government halted it.

In August, it was revealed that publicly owned Scottish Investment Bank £8m loss About the cycle in Scotland.

SNP Westminster leader Stephen Flynn cited the controversy over the plan as one of the “self-inflicted wounds” suffered by the party in July’s general election.

He told reporters at an SNP conference: “We are arguing with the UK government over bottle banks at a time when people in Scotland are in a cost of living crisis.”