The Subsidy Control Act came into effect in January 2023 and replaces the European Union state aid regime. The UK Government said it enables “public authorities to give subsidies that are tailored to their local needs, and that drive economic growth while minimising distortion to UK competition and protecting our international obligations.”
The case to be heard in July will be in front of a judge on the competition appeal tribunal. Max Recycle is arguing that the council has breached the act by allowing its commercial waste arm to use “the employees and assets of its household waste team, which is funded through council taxes and other public funding, for less than a market price”.
Durham county council says it has carried out commercial waste collections legally.
This is a very interesting first case to have
- Justice Marcus Smith, Competition Tribunal
‘New jurisdiction’
Last month, a case management conference took place to discuss the details of the trial with the two legal teams, a transcript of which was recently published online.
This is often required before a date will be set for trial unless a judge decides it would not be helpful to have one.
Here, Mr Justice Marcus Smith, the presiding judge, explained this will be the first case concerning subsidies and the first case under the Subsidy Control Act 2022 before the tribunal.
He added to the legal teams: “As such, you have the unhappy position, as do I, of dealing with a new jurisdiction, where we are somewhat feeling our way.”
Justice Smith added: “This is a very interesting first case to have and on one level I am very pleased to have an interesting first case to have. On another level, this was very much not the first case I was expecting.”
The judge explained that he wants to keep “a very close eye on how we want the jurisdiction to evolve”.
Costs
He suggested a cap on costs to ensure a “super-fast” regime. This will be decided once both parties’ final submissions are made. The council’s legal team argued the cap should be higher because if they are successful, then additional costs fall onto the public purse. Max Recycle argued the proceedings “are of significant public importance, and we are also concerned about the costs which have been incurred by the respondent in other previous proceedings.”
Other formalities are still to be decided. Other companies were given until Friday, 3 March, to “intervene”. This allows a company to obtain the court’s permission to enter into a lawsuit which has already started between other parties and to file a complaint stating the basis for a claim in the existing lawsuit.
County council
Oliver Sherratt, Durham county council’s head of environment, said: “We are aware that proceedings have been lodged with the Competition Appeal Tribunal and as this is ongoing it would not be appropriate for us to comment at this time.”
History
Max Recycle and Durham county council have been involved in a long-running legal dispute stretching back many years.
Most recently, in February 2022, the Court of Appeal rejected Max Recycle’s appeal against a ruling in November 2020, which struck off its claim against Durham county council over commercial waste collections (see letsrecycle.com story).
In August 2018, the company took its case to the European Commission, reporting Durham county council for allegedly breaching state aid rules (see letsrecycle.com story).
However, according to Max Recycle, it brought the case before British courts as “seemingly, having made a complaint to the European Commission, it was taking an interminable amount of time to receive any feedback from them”.
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