Biffa Waste Services LTD against the Scottish Ministers (Court of Session)

Factual and Procedural Background

The Plaintiff, Company A, brought a commercial action against the Defendant, The Scottish Ministers, seeking damages arising from the Defendant's decision to delay the implementation of the Deposit Return Scheme for Scotland ("the DRS"). Company A had committed substantial financial resources towards the DRS's implementation and claimed losses totaling £166.2 million, comprising £51.4 million in investment and management costs and £114.8 million in lost profits.

The Plaintiff advanced two main claims: first, that the Defendant owed and breached a duty of care based on an assumption of responsibility; second, that the Defendant made a negligent misrepresentation through a letter dated 17 May 2022 from the responsible minister, which reassured the Plaintiff about the DRS's viability but failed to disclose the necessity and status of approval under the United Kingdom Internal Market Act 2020 ("IMA"). The Defendant denied these allegations and sought dismissal of the action, contending no duty of care was owed and that the claims were irrelevant.

The DRS was a policy initiative under the Climate Change (Scotland) Act 2009, designed to require producers and importers of single-use containers to charge a deposit refundable upon return of containers for recycling. Company A entered into a contract in July 2022 to act as the logistics provider for the scheme administrator, Circularity Scotland Limited ("CSL"). The DRS's launch was postponed multiple times, ultimately delayed until at least October 2025, following difficulties in obtaining the necessary exclusion under the IMA, which restricts devolved jurisdictions from imposing differing requirements on goods originating elsewhere in the UK without approval.

Following the delays and the failure to secure full approval, CSL went into administration, terminating Company A's contract and resulting in the loss of the Plaintiff's investment and anticipated profits. The Defendant's conduct regarding the timing and communication about the IMA approval process forms the crux of the dispute.

Legal Issues Presented

1. Whether the Defendant owed a duty of care to the Plaintiff based on an assumption of responsibility in the context of implementing the DRS and managing the IMA approval process.
2. Whether the Defendant made a negligent misrepresentation in the 17 May 2022 letter to the Plaintiff regarding the viability and deliverability of the DRS.
3. Whether the Plaintiff reasonably relied on the Defendant's assurances and conduct.
4. Whether any such duty of care would be inconsistent with the statutory framework governing the Defendant's powers and duties.
5. Whether the Plaintiff's claimed losses were causally connected to any breach of duty or misrepresentation by the Defendant.

Arguments of the Parties

Defendant's Arguments

• The timing of seeking IMA exclusion involved political judgment and was non-justiciable; courts should not interfere with such discretionary decisions.
• No duty of care was owed because the DRS was a public policy scheme benefiting the general public, not the Plaintiff specifically.
• The Plaintiff did not reasonably rely on the Defendant’s assurances, especially given contractual terms including a longstop date and insurance provisions covering delay risks.
• The letter dated 17 May 2022 did not amount to a negligent misrepresentation as it did not guarantee the scheme’s deliverability and did not fetter the Defendant’s public law duties.
• The Plaintiff had access to independent legal advice and the public nature of the IMA meant the Plaintiff should have been aware of the risks.
• The alleged breaches lacked sufficient specification and were irrelevant, particularly concerning the timing and process of seeking IMA exclusion.
• Even if a duty existed, any delay in seeking exclusion did not necessarily cause the losses claimed, especially given that glass was excluded from the temporary IMA exclusion.

Plaintiff's Arguments

• The Defendant owed a clear duty of care, having assumed responsibility by virtue of their unique knowledge and control over the IMA approval process critical to the DRS's viability.
• The Defendant breached this duty by failing to alert the Plaintiff that IMA exclusion was required, had not been sought, and had not been granted, and by delaying the application process.
• The 17 May 2022 letter was a negligent misrepresentation that assured the Plaintiff of the DRS’s deliverability without disclosing the critical issue of IMA approval, thus creating a misleading half-truth.
• The Plaintiff reasonably relied on the Defendant’s assurances and conduct, which induced it to enter into the contract and make significant investments.
• The contractual provisions including insurance and a longstop date did not negate reliance on the Defendant’s undertaking to properly manage the DRS implementation and IMA approval process.
• The losses claimed were directly caused by the Defendant’s breaches, as the Plaintiff would not have entered into the contract or incurred costs had it been properly informed.
• The Defendant’s conduct was careless, unreasonable, and negligent, falling outside any legitimate discretion.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Carty v Croydon LBC [2005] 1 WLR 2318	Non-justiciability of political decisions involving public interest balancing	Referenced in support of the Defendant’s argument that timing of IMA exclusion was a political judgment not suitable for court intervention.
N v Poole Borough Council [2020] AC 780	Duty of care by public authorities and assumption of responsibility doctrine	Guided the court’s analysis on whether a duty of care could arise from statutory powers and the nature of the relationship between parties.
Jain v Trent Strategic Health Authority [2009] 1 AC 853	No duty of care owed to third parties who provide services to achieve statutory ends	Supported Defendant’s submission that the DRS’s public interest nature precluded duty of care to the Plaintiff.
Davis v Radcliffe [1990] 1 WLR 821	Policy considerations in imposing duty of care on public authorities	Used to argue against imposing a duty that might conflict with public interest and policy objectives.
JP SPC 4 v Royal Bank of Scotland International Ltd [2023] AC 461	Factors relevant to assumption of responsibility in duty of care claims	Applied to assess whether the Defendant assumed responsibility towards the Plaintiff in the specific factual context.
NRAM v Steel 2018 SC (UKSC) 14	Requirements for negligent misrepresentation and reasonable reliance	Guided the court’s evaluation of the Plaintiff’s claim of negligent misrepresentation based on the 17 May 2022 letter.
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465	Establishment of duty of care in negligent misrepresentation involving special skill	Supported the proposition that the Defendant’s unique knowledge could give rise to a duty of care in making assurances.
Gluckstein v Barnes [1900] AC 240	Half-truths as misrepresentations	Referenced to support the Plaintiff’s argument that the letter was a misleading half-truth.
Park's of Hamilton (Holdings) Limited v Campbell [2008] CSOH 177	Interpretation of representations in context; effect of reliance on representations	Used in assessing the meaning and effect of the 17 May 2022 letter and the Plaintiff’s reliance on it.
Redgrave v Hurd 1881 20 ChD 1	Inference of reliance on material misrepresentations absent contradictory knowledge	Supported the inference that the Plaintiff relied on the letter unless proven otherwise.
Barrett v Enfield Borough Council [2001] 2 AC 550	Justiciability and public authority duty of care claims should generally proceed to trial unless clearly unsustainable	Informed the court’s decision to allow the claim to proceed to proof rather than strike out.
Caparo Industries plc v Dickman [1990] 2 AC 605	Fair, just and reasonable test for imposing duty of care	Discussed in the context of whether imposing a duty on the Defendant would be appropriate.
Robinson v Chief Constable of West Yorkshire Police [2018] AC 736	Clarification of principles on public authority duty of care and statutory discretion	Guided the court’s approach to statutory discretion and public authority liability.

Court's Reasoning and Analysis

The court undertook a detailed examination of established legal principles concerning the imposition of a duty of care on public authorities, particularly in the context of statutory powers and political discretion. It confirmed that public authorities may owe duties of care analogous to those owed by private individuals unless such duties are excluded by the legislation or would conflict with statutory discretion.

Applying the doctrine of assumption of responsibility, the court found that the Plaintiff's pleadings sufficiently alleged a special relationship with the Defendant, who possessed unique knowledge and control over the IMA approval process critical to the DRS’s viability. The Plaintiff entrusted the Defendant to take necessary steps, and the Defendant provided assurances in the 17 May 2022 letter that could reasonably induce reliance.

The court acknowledged the Defendant’s arguments on non-justiciability, emphasizing that while the timing of political decisions generally falls outside judicial scrutiny, the specific issue here—whether the Defendant failed to act timeously in seeking IMA exclusion and failed to warn the Plaintiff—was a matter of implementation rather than policy formulation. The court held that these factual questions could not be resolved at this stage and required proof.

Regarding negligent misrepresentation, the court accepted that the letter’s terms, viewed in context, could constitute a misleading half-truth if it failed to disclose the necessity and status of IMA approval, and that the Plaintiff’s reliance on the letter was not unreasonable given the Defendant’s unique knowledge and the purpose of the letter.

The court noted complexities concerning causation and loss, particularly the interaction between the alleged breaches and the effect of the exclusion of glass from the IMA approval, but declined to exclude any averments from proof on these grounds.

Overall, the court concluded that the Plaintiff’s pleadings disclosed circumstances that could give rise to a duty of care and negligent misrepresentation and that the case was not suitable for dismissal at this preliminary stage.

Holding and Implications

The court REPELLED the Defendant's first plea-in-law seeking dismissal of the action on the basis that no duty of care was owed.

A proof before answer was fixed to determine the factual issues, including whether the Defendant owed and breached a duty of care, whether the Plaintiff reasonably relied on the Defendant’s assurances, and the extent of any loss caused.

The decision means that the Plaintiff’s claims will proceed to trial, with all substantive issues to be resolved on evidence. The court did not establish any new legal precedent but applied existing principles of public authority liability, assumption of responsibility, and negligent misrepresentation to a novel factual context involving inter-governmental relations and statutory approval processes.