The dispute was brought by Max Recycle and split into two issues. The first was whether the council is “subsidising” commercial waste collections by using taxpayer funded facilities to its customers, which was dismissed.
The second issue, which Max Recycle won, was a more technical point. This was whether the council had considered a previous ruling when setting its commercial waste fees in March 2023.
“Since Max Recycle needed to succeed on both point, it follows that the application must be rejected, and we so order,” the ruling said.
Responses
Alan Patrickson, Durham county council’s corporate director for neighbourhoods and climate change, said: “We are pleased with the Competition Appeal Tribunal’s decision to reject the application. The Tribunal’s decision in the UK’s first Subsidy Control case is a positive result for Durham and for all public authorities.”
Scott Hawthorne, managing director of Max Recycle, said: “Whilst the judgement can be seen as a score draw on the issues, unfortunately we needed to be successful on both points not just one.
“We will have to consider the full judgement in some detail over the next few weeks and decide whether to make motions to appeal it or not.”
Max Recycle’s full statement can be seen here.
It is a very unlikely reading for one person to subsidise themselves
- Appeal Tribunal
Subsidy
The ruling was handed down on 27 July, after the hearing on 3 and 4 July. It was unanimously ruled by three judges.
The case is the first application for the review of a subsidy decision under section 70 of the Subsidy Control Act 2022 (see letsrecycle.com story).
On the issue of subsidy, the judges said: “In short, it was not possible for Max Recycle to identify any person, other than the council itself, implicated in the provision of waste collection or waste disposal services. As a result, the giver of the subsidy was the same person as the person on whom the subsidy was conferred.
“It is a very unlikely reading for one person to subsidise themselves. The very notion is illogical since it involves (by definition) taking away with one hand in order to give with the other. In other words, the advantage does not involve subsidisation, because the ‘economic benefit’ simply circulates within one entity.
“Even if we are wrong in our conclusion just expressed, we consider that no subsidy within the meaning of the 2022 Act arises on the facts of the present case.”
‘Common costs’
The judges added that Max Recycle has “misconstrued what is actually going on within the council”.
According to the ruling: “What is going on is an attempt to apportion common costs across two different but related services.
“It bears emphasising that if the council did elect to significantly overcharge or undercharge the consumers of waste collection services, it would open itself to challenge under public law principles
“The consequence of Max Recycle’s analysis is that commercial waste customers would be charged more by the council while the household waste service would accrue all the benefits of the arrangement, which might be said to be a ‘subsidy’ going the other way.”
Each party is also to pay its own costs.
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