DWF has lodged a claim against the Government over a tender process that saw the firm lose out to Shepherd and Wedderburn on a place on the Insolvency Service's (IS) legal panel.

DWF has alleged that the IS, an executive agency for the UK's Department for Business, Innovation and Skills, committed "manifest errors" in its assessment of the firm's tender and that it had not been treated equally with other firms pitching for spots.

The claim has meant that the award for contracts to Shepherd and Wedderburn, which made a successful bid, has been suspended for now, according to a filing.

The case emerged after the Court of Appeal overturned an earlier decision by which refused DWF's application to amend its claim against the IS.

The IS last July began a tendering exercise that sought to award six three-year contracts worth between £32m and £50m, to four law firms in England and Wales and two in Scotland.

DWF was unsuccessful in its pitch for panel spots in both regions, with the IS awarding the England and Wales contracts to three incumbent providers as well as first-time provider Shepherd and Wedderburn, which also gained one of the Scottish contracts.

The decision notice showed that DWF scored 74% against pricing and expertise criteria, placing it behind Shepherd and Wedderburn and regional outfit Howes Percival by 1%. The other winners gained higher scores.

After DWF obtained a further breakdown of the scores from the IS, it was found that the firm scored higher for Scotland than for England and Wales, an outcome that DWF deemed "inexplicable" as its insolvency team had far less experience working in Scotland than England.

The firm went on to question how Shepherd and Wedderburn could have gained comparatively higher scores in relation to providing contract services in England and Wales.

DWF head of litigation 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."

DWF is instructing Michael Bowsher QC of Monckton Chambers and 11KBW's Akhlaq Choudhury and Joseph Barratt on the claim.

Eversheds, which is acting for the IS, has turned to Keating Chambers' Sarah Hannaford QC and 11KBW's Andrew Sharland.