First subsidy control challenge dismissed

27/07/23

The Competition Appeal Tribunal (the President, Sir Marcus Smith, Professor David Ulph CBE, & Lord Young KC) has this afternoon dismissed the first application for review brought under section 70 of the Subsidy Control Act 2022 (“the 2022 Act”) in a reserved judgment following a hearing on 3-4 July 2023.

The applicant, the Durham Company Limited trading as “Max Recycle”, is a provider of waste collection services including in County Durham. Max Recycle alleged that Durham County Council (“the Council”), which collects and disposes of both household and commercial waste in discharge of its statutory duties under Part 2 of the Environmental Protection Act 1990, had granted an unlawful cross-subsidy within the meaning of s.2 of the 2022 Act from its household commercial waste collection and disposal operations to its commercial waste collection and disposal operations.

The Tribunal held that on the true construction of the 2022 Act, a public authority could not provide a subsidy to itself. Even if that was wrong, the Council, in collecting and disposing of commercial waste in discharge of its statutory functions, was not acting for an economic purpose and accordingly was not an “enterprise” capable of receiving a subsidy. Max Recycle’s case that there was a subsidy would in any event have failed for other reasons in light of how the Council in fact had allocated costs between its household and commercial waste collection and disposal operations.

The judgment of Tribunal ([2023] CAT 50) will be of wide interest to practitioners both because it is the first case under the 2022 Act and because the guidance provided on the extent to which public authorities are capable of receiving subsidies under it is of general application.

The judgment is here.

The first subsidy control challenge in the Competition Appeal Tribunal [2024] ECLR 47 (with R Howell)