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DLA has been granted a second 28-day extension to put up a defence against allegations that it admitted negligence in a property deal but then omitted to pay damages.
Property developer Hermes Homes instructed Clyde & Co to issue proceedings, despite claims that it received a letter from DLA admitting liability.
The dispute centres on a plot of land in Malvern, Worcestershire, which belon-ged to Hermes.
When Hermes was refused residential planning permission, it sold half of the land to the council and instructed DLA to place a restrictive covenant for its own benefit covering the retained land.
Hermes alleges that when it sold the remaining land to the Day of Salvation Ministries, DLA negligently sold the restrictive covenant, as it had set up the covenant for the benefit of the land rather than for the benefit of Hermes.
The Day of Salvation Ministries then sold or transferred the benefit of the restrictive covenant to the council, and Hermes claims that it suffered loss and damage at the hands of DLA's negligence. The amount of damages claimed is believed to be more than £100,000.
Julie Dormer from James Chapman & Co is acting for DLA. Tim Foley, a Clyde & Co solicitor, is acting for Hermes.
DLA declined to comment, but Chris Rawstron, managing partner of its Birmingham office, said that the partner who was acting for Hermes on behalf of DLA at the time of the dispute has left the firm.
If DLA fails to provide a defence by 6 October, Clyde & Co will apply for a judgment in default.