Panel punch-up: DWF and the panel-place High Court case

What do you do when you fail to win a panel place for reasons you think are “inexplicable”? Sue?

Yes, if you are DWF. As you might have seen earlier this week, the firm has launched a High Court battle with the Government’s Insolvency Service (IS), part of the Department of Business, Innovation and Skills (BIS).

DWF alleges that the IS unfairly knocked the firm out of the running for a panel place in favour of Shepherd & Wedderburn, “in an arbitrary, non-transparent and unequal process of marking down [its] scores”.

At a Court of Appeal hearing this month DWF slammed the IS for its tender process, claiming the IS was, “in gross breach of its obligations of objectivity, transparency, equality of treatment, good administration and proportionality”.

Every firm must want a glimpse of the in-house panel selection process and that’s exactly what DWF got, but not under happy circumstances.

The IS launched its hunt for new panel firms last summer, seeking up to six contracts for a three-year period in Scotland and England and Wales. But DWF lost out to Shepherd & Wedderburn in both, after scoring less than the Scottish rival.

The firm demanded to know why it hadn’t made the grade and wrote to the IS for an inside track on the marking process.

The news that it won lower scores in England and Wales than Scotland did not ease its pain. In fact, DWF found the concept “inexplicable”, claiming it had no direct experience and knowledge of working in Scotland and extensive experience in England and Wales.

A month later the firm launched proceedings against the IS for breach of the Public Contacts Regulations 2006, alleging that it had failed to act transparently and treat economic operators equally.

By 3 February it had issued its particulars of claim but was still pushing the IS for further disclosure about exactly how the decision had been made. One month later the IS came forward with a report disclosing exactly how the decision was made.

DWF was neck and neck with Shepherd & Wedderburn and Howes Percival before the presentations, all scoring 75 points. But afterwards its score was bumped down to 74, knocking it out of the competition.

The reason for its one-point drop-out?

“A [perceived] marginal weakness in the structure of the firm, with an over reliance on two partners, expert in UK Public Interest Law, having to disseminate this knowledge to other insolvency lawyers…,” according to the report.

It added: “Consequently, the panel agreed that of the three “tied” suppliers that DWF represented the marginally weaker proposition, and that the aggregated scores should be adjusted to reflect this.”

DWF immediately launched an application to amend its claim, arguing that it had been marked down for a criteria not laid out in the tender documents. According to the IS report its original criteria had been around structure, services and value for money. DWF argued that in its selection process the agency, “undertook a wholly subjective, partial and relative ad-hoc comparison between certain (arbitrarily selected) features of the tenders’ proposals and/or statements during the presentation”.

In a new nine-paragraph onslaught against the IS’ marking criteria, DWF said that, “in marking-down and rejecting the claimant’s tender following the presentation the defendant did not objectively and transparently apply the published award criteria”.

It also accused the IS of having “relied on that flawed and unlawful comparison to decide which tenders (or tenderers) should be awarded places on the Proposed Framework to decide which tenders (or tenderers) should be awarded places on the proposed framework.”

At the 8 July hearing over in front of Lady Justices Arden and Black along with Sir Robin Jacob ruled that DWF was able to amend its particulars of claim.

Also under debate was whether or not the IS was allowed to lift the suspension of its contract to Shepherd & Wedderburn. All the agency’s panel firms have been in limbo since the claim was launched but will be able to breathe a sigh of relief now.

The court lifted the suspension for all successful bidders apart from Shepherd & Wedderburn. For DWF and its Scottish rival, the panel provocation continues.