Neil Grundon, Deputy Chairman of Grundon Waste Management, says new ground rules between the public and private sector need to be established.
Here is a waste and recycling trivia question for you: what does a disgruntled ex-employee of a failed Italian clothing company have to do with an English local authority?
The answer in the Court of Appeal is apparently ‘nothing’.
It is not quite as simple as that of course. When Mr Francovich (along with others) took Italy to court in 1991 for not imposing an EU directive into law and won damages, he established a legal precedent that has been used rather unsuccessfully to allow individuals to claim damages against member states of the EU.
It seems to me that the playing field needs a bit more levelling up at the moment…
It was this case law that was referenced during Max Recycle’s recent case against Durham County Council. The recycling firm argued that commercial waste collections undertaken by the council, breached state aid rules because they are carried out using the same staff and vehicles as the taxpayer-funded council’s household waste collections.
The council said it carried out the collections legally and, in November 2020, Max Recycle’s claim was dismissed. Undeterred, the company was given permission to appeal and the case was heard by three judges at the Court of Appeal (Civil Division) in January this year.
Lord Justice Edis, the one judge who said overall he would allow the appeal, then referenced the Negassi test (an Eritrean fighting a citizen test against the UK government) which requires the court to be fully informed about all relevant factors.
To the disappointment of the Max Recycle team, however, the Court of Appeal ruled by 2-1 in favour of the council.
The Francovich principle
For me, the case was reminiscent of someone injured in a bar brawl whilst having his dinner, watching the police reason with a load of drunks as to the cause of the fight.
I think it wasn’t helped by the unfortunate timing, falling as it did into the netherworld of the UK’s withdrawal from the EU – not ideal given that the Francovich principle is a principle of EU law requiring damages to be available where a member state breaches a rule of EU law.
However, when the blood is up, I guess you have to go into battle with the weapons you have, and the weapons in this particular case were not up to the job in hand.
In my opinion, the fact remains that an injustice has been done and, in the absence of a rule of law, some ground rules need to be established.
If Grundon Waste Management was to go head-to-head with Max Recycle over an 1,100 litre bin at the Dog and Duck pub (there must be one) in Durham, and we decided we were not going to charge VAT* (or bother paying it), I hazard a guess that someone from HMRC would soon come knocking on our door. Any amount of me banging on about Eritrea and Mr Francovich would not make a great deal of difference.
The case was reminiscent of someone injured in a bar brawl whilst having his dinner, watching the police reason with a load of drunks as to the cause of the fight
Margaret Thatcher evened the playing field between the public and private sectors in waste collection by allowing competition and by introducing compulsory competitive tendering.
It seems to me that the playing field needs a bit more levelling up at the moment – between local authorities’ ideas around the ‘reform’ of commercial waste collections and how best to manage proposals for Extended Producer Responsibility (EPR), it’s become a bit too much of a slippery slope.
It would be ironic if after 40 years, through EPR and cases like this, our industry went backwards to the days of limited customer choice and rigid pricing.
That won’t bode well for future investment in our sector and, above all, it certainly won’t serve the best interests of customers.
*In 2018, Max Recycle was denied permission to appeal a 2016 ruling which stated VAT exemptions provided to local authorities for waste collections, were not anti-competitive.
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