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DWF takes legal action against the Insolvency Service after failed panel bid

Top 25 LB 100 firm DWF is taking legal action against the government’s Insolvency Service (IS) after the national firm lost out on an appointment to its legal services panel.

The claim was issued after it emerged earlier this year that DWF had missed out on a contract for England and Wales to Scots firm Shepherd and Wedderburn.

A breakdown of the bidders’ scores was ‘inexplicable’ as it showed that DWF had scored better for Scotland than England and Wales, because, the judgment summarises: ‘Its insolvency team had direct knowledge and experience of working in England, but not in Scotland, and this contrasted with the position of Shepherd and Wedderburn, which, so far as DWF was aware, had no or very limited experience in respect of provision of contract services in England and Wales.’

The IS award decision notice provided details of the scores achieved during the tender process and showed that DWF had been awarded a total weighted score of 74%, leaving it one point behind Shepherd and Wedderburn and another bidder, Howes Percival, for England and Wales.

The panel process began last July, offering up to six contracts – four in England and Wales and two in Scotland – for a three-year period and valued between £32m to £50m. Shepherd and Wedderburn was also awarded one of the Scottish contracts.

DWF launched its legal battle against the IS in February, claiming the government body had breached its obligations to treat ‘economic operators’ equally and in a non-discriminatory way and act in a transparent way.

It further claimed the IS ‘committed manifest errors’ in its assessment and/or scoring of its tender.

The dispute became public on Tuesday (8 July) when the Court of Appeal granted DWF’s appeal against a decision by the Technology and Construction Court that the firm could not amend its particulars of claim.

Jacob J, handing down the appeal decision, said the issues are ‘not clear cut’ and a trial will be required to resolve the dispute, suggesting a date in early August or September, despite submissions for the Secretary of State that August is too soon. He said: ‘Competent lawyers could easily do the job in time. But there is not a great difference between the two dates anyway.’

Monckton Chambers’ Michael Bowsher QC, and 11KBW’s Akhlaq Choudhury and Joseph Barrett were instructed by DWF, while Keating Chambers’ Sarah Hannaford QC and 11KBW’s Andrew Sharland were instructed by Eversheds for the Secretary of State for Business Innovation and Skills, which is acting on behalf of the IS.

In a statement, DWF’s head of litigation Graham Dagnall said: ‘Our litigation team has a strong and longstanding positive relationship with the Insolvency Service, having worked with the organisation for approximately 20 years advising on public interest matters, and we’re challenging the panel review result purely on the basis of a technical issue.

‘This type of challenge is not uncommon in the public sector, where the EU regulations on procurement are very strict to ensure transparency and equal treatment and it’s important for both us as a supplier to the public sector and for public sector bodies to be seen to comply with European legislation. We’ve got strong public sector litigation expertise and once this technicality has been resolved we’d welcome the opportunity to resume working and supporting the Insolvency Service.’