The way that the Scottish Government's deposit return scheme (DRS) was set up by the firm behind it was unlawful, a court has ruled.
Lanarkshire shopkeeper Abdul Majid won a judicial review against the firm which was set up to oversee the scheme by the Court of Session on Friday.
Majid, who runs Costcutter and Baba’s Kitchen in Bellshill, challenged the legality of the retailer handling fees which Circularity Scotland was trying to impose. The company proposed that retailers would have to pay a fee for each item of scheme packaging collected.
The court ruled that Circularity Scotland had no power to set the fees and that it should not have tried to impose a flat fee.
This comes just weeks after the scheme was postponed until 2025 following a row with the UK Government over whether glass could be included.
The Record also revealed that Circularity Scotland was on the brink of collapse, with Green minister Lorna Slater facing calls to resign.
Scottish Grocers' Federation chief executive Pete Cheema welcomed the ruling.
He said the decision "essentially stops the DRS progressing in its current form" and called for the UK Government to make this legal position binding when the UK-wide scheme is introduced in 2025.
He said: “The court of session has held that the way that the Scottish Government and Circularity Scotland had set up the Deposit Return Scheme was unlawful and did not comply with the regulations made by the Scottish Parliament.
"CSL had no powers to set the fees that it sought to impose on retailers and even if it had, then they had still got it wrong by trying to impose a flat fee on all retailers, despite the difference in costs to the operators.
“This decision essentially stops the DRS progressing in its current form - it’s hugely disappointing however that it took a court action by an independent retailer when SGF had tried for some considerable time to make the Scottish Government listen to those directly affected – indeed, we had personally informed Lorna Slater that CSL were breaching their license but she refused to support us when it was obvious that we were right.
"Also, we had warned the Scottish Government that it was never industry led. Despite representing the largest number of Return Point Operators, our voice was consistently not listened to. SGF is hopeful that the UK Government will make this legal position binding when they introduce the UK-wide DRS scheme in October 2025.”
The review had sought to determine whether Circularity Scotland was entitled to set the fees under the under the scheme and "what factors must be taken into account in setting this fee".
Majid argued regulations set out in 2020 did not give the firm the power to determine the fees and if it did, it should be based on the costs to individual retailers. He claimed his business would lose £1,000 a month under the fees set.
He said: “I am absolutely delighted to have won my case, one which I feel in many ways was not just for myself but for the many other retailers who would have been negatively impacted if CSL had been able to proceed with their plans for the setting of the retail handling fee."
A Scottish Government spokesperson said: “The judicial review was brought by Mr Majid against Circularity Scotland, which is a private, non-profit entity, created by industry to act as the scheme administrator for DRS. The Scottish Government was not involved in the proceedings.
“The court has found that CSL wrongly applied one aspect of the Deposit and Return Scheme for Scotland Regulations 2020 in setting the reasonable handling fee for retailers operating return points.
"The court did not find that the DRS Regulations are unlawful, nor did it find that the Scottish Government acted unlawfully in setting up DRS or in making the DRS Regulations.
"But the Scottish Government will consider the decision in this case as well as any implications for the Deposit Return Scheme as we work towards a launch date in 2025 along with other nations in the UK.”
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