The Subsidy Control Act 2022 regulates the lawfulness of financial assistance awarded by public authorities to organisations engaged in economic activity.
In the Durham Company Limited v Durham County Council (commonly referred to as "The Durham Case") a commercial waste collection company, trading as Max Recycle, alleged an unlawful subsidy arose from Durham County Council using the same bin lorries to collect commercial waste as for residential waste collections and brought an action in front of the Competition Appeal Tribunal under the Subsidy Control Act 2022.
In finding "no subsidy", the Competition Appeal Tribunal concluded:
- when undertaking commercial waste collections in line with its statutory duty the Council should not be considered to be engaged in economic activity;
- as the Council was obliged to apply a reasonable charge for commercial waste collection services, any advantage would accrue to the customers not the Council; and
- no “enforceable right" to the financial assistance could arise within the Council.
A more detailed analysis of the Competition Appeal Tribunal's ruling in the Durham Case can be found in DWF's article Subsidy Control Litigation – analysis of the Competition Appeal Tribunal ruling in the Durham Case.
Jonathan Branton, partner and Head of Public Sector at DWF, said: "This is a landmark post-Brexit law case as the first time in which the UK's own Subsidy Control Act 2022 has been addressed by the Court rather than EU State aid law or an EU/UK Treaty.
"Public sector bodies will welcome the Competition Appeal Tribunal's decision which confirmed the lawfulness of using one set of bin lorries to collect residential and commercial waste. Undoubtedly there will be many more subsidy challenges in the coming years which develop the law further."
Alexander Rose, Partner in DWF's Commercial and Competition team, said "The Durham Case clarifies how the Subsidy Control Act 2022 is to be applied and therefore is an important precedent that will be carefully studied by Subsidy Control practitioners across the UK. That DWF's Commercial and Competition Law team advised upon this nationally significant Subsidy Control law case, underlines its position as a leading adviser in the market".
The DWF team consisted of Jonathan Branton and Alexander Rose advising on subsidy control and Joel Heap, Michelle Maher and Elinor Jackson having conduct of the litigation.
Full judgment: The Durham Company Limited v Durham County Council
