The Legal Services Commission has averted one legal challenge to its tender process by awarding a social welfare contract to a Birmingham firm which sought a judicial review of the LSC’s initial decision not to make an award.

Housing specialist the Community Law Partnership claimed the criteria and scoring system used by the LSC in awarding social welfare contracts were irrational because they rewarded firms that took more appeals to the upper tribunal and penalised those who were more successful in the lower tribunal The firm failed to obtain a contract because it lost one point on the tribunal criteria. Its subsequent appeal was rejected.

At a directions hearing last week in the High Court, Mr Justice Collins said the criteria used by the LSC were ‘utterly absurd and totally irrational’, declaring that the decision not to award the firm a contract was ‘dreadful’.

Adjourning the hearing, Collins advised the LSC to ‘carefully consider’ its position. ‘If you fight this and lose it, you could set a precedent,’ he warned. Collins said if the LSC’s decision not to award a contract to CLP remained unchanged, he would expect a judicial review to succeed.

On 6 September the LSC informed CLP that, after a verification process, it would now be offering the firm a contract.

A statement issued by the firm’s three partners said: ‘We are delighted with this news. In these circumstances the court action has been settled. We would like to thank all those who have provided us with letters and messages of support in this process – this support has been vital in enabling us to continue our fight.

‘Above all we would like to thank and pay tribute to the loyal and dedicated CLP staff who have stuck with the partners through this most stressful process.’

An LSC spokesman said: ‘As a result of the continuing verification process the LSC will be able to make an offer of an allocation of work to the CLP to deliver social welfare law services in the Birmingham procurement area.

‘As a result the CLP has withdrawn its judicial review claim against the LSC. We’re pleased we have been able to resolve this matter without the need for litigation.'