DWF in High Court battle with Government over Insolvency Service tender

DWF is gearing up for a High Court showdown with the Government over its decision to choose Shepherd and Wedderburn over the firm as an adviser to the Insolvency Service.

Shepherd and Wedderburn was one of up to six firms to be awarded a contract to advise the Government advice service following a tender last year. The contract is worth between £32m to £50m annually to the firms instructed.

The case has already ended up in the Court of Appeal (CoA) after DWF was told it could not amend its breach of public contract regulations claim against the Department for Business Innovation and Skills (BIS).

Earlier this week the CoA accepted an appeal by the firm allowing it to include claims for broad breach of duty that included a failure to adequately evaluate presentations made by the firm and allegations that the firm was unfairly marked down.

The contract with the successful firms that tendered was suspended pending the outcome of the case, only for the suspension to be lifted and stayed by the High Court. 

The CoA ruled only Shepherd and Wedderburn need now be affected by the suspension while the court case was decided. The ruling overturned Judge Raynor QC’s decision in the Technology and Construction Court in May.

Partner Jon Hainey instructed Monckton Chambers’ Michael Bowsher QC to lead the case. He faced Keating Chambers’ Sarah Hannaford QC who was instructed by Eversheds partner Richard Matthew for the Insolvency Service.

DWF launched its battle against the IS in February after requesting that the agency explain why it had lost on bids for both Scottish and English panel spots.  According to the CoA ruling, the firm was surprised to learn that it had scored higher for the pitch in Scotland than in England and Wales.

The ruling said it “seemed inexplicable because its insolvency team had direct knowledge and experience of working in England, but not Scotland, and this contrasted with the position of Shepherd and Wedderburn, which, so far as DWF was aware had no or very limited experience”.

The firm alleges that the IS had “committed manifest errors in its assessment and/or scoring” of the tender.

In a statement DWF litigation head Graham Dagnall said: “Our litigation team has a strong and long-standing 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.”

The legal line-up

For the appellant, DWF 

Monckton Chambers’ Michael Bowsher QC and 11 KBW’s Akhlaq Choudhury and Jospeh Barratt, instructed by DWF partner Jon Hainey

For the respondent Secretary of State for Business Innovation and Skills, acting on behalf of the Insolvency Service

Keating Chambers’ Sarah Hannaford QC and 11 KBW’s Andrew Sharland, instructed by Eversheds partner Richard Matthews