A national firm has successfully forced the Insolvency Service to halt the issuing of a legal contract while it pursues a challenge to tendering.

DWF issued proceedings in February against the Insolvency Service over a tendering exercise for three-year contracts worth up to £50m. The Court of Appeal last month agreed to allow an amendment to DWF's claim.

The Insolvency Service, an agency of the Department for Business, Innovation and Skills, planned to award up to six contracts, four in England and Wales and two in Scotland, for the provision of legal services in both jurisdictions.

DWF was told in January it had lost out to three incumbent providers and a new provider for England and Wales, Scottish and London firm Shepherd and Wedderburn. It had also lost out on the contract to provide legal services in Scotland.

But, following a challenge from DWF, the Court of Appeal last month agreed to allow an amendment to its claim and in turn refused to lift the suspension of Shepherd and Wedderburn's contract.

In the procurement process DWF had been awarded a weighted score of 74%, just one point behind Shepherd and Wedderburn and another bidder for England and Wales.

But a detailed breakdown of the scores ‘surprised’ DWF, the court heard – the firm had scored higher in Scotland than in England and Wales, even though its insolvency team had far more knowledge and experience of England and Wales. In contrast, Shepherd and Wedderburn was a firm with much more experience of the Scottish jurisdiction.

DWF called this the ‘Scottish anomaly’.

DWF issued proceedings against the service claiming that the agency had breached its obligations under the Public Contracts Regulations 2006, EU Directive 2004/18/EC and general EU law principles. DWF argued the service was in breach of its duties to treat economic operators equally and in a non-discriminatory way, and to act in a transparent way.

The claim form in February was not accompanied by Particulars of Claim and, when DWF tried to change this, seeking to add extra disclosure, permission to amend its claim was refused by His Honour Judge Raynor in May.

The effect of the start of proceedings is that the contracting authority must refrain from entering the contract. That position remained the same after DWF was subsequently granted leave to appeal the decision of Raynor.

Sir Robin Jacob (pictured), sitting in the Court of Appeal, said he would allow the appeal in respect of the amendment, refuse to lift the suspension as regards the award of a contract to Shepherd and Wedderburn but lift the suspension as regards the other successful bidders.