As far as i am aware the tenants don't have to have their side witnessed , unless they have iniciated a single claim before yours
But you can't both do a single claim
It is simple really ,if you claim part of deposit back from DPS , then you let them know how much and why , the claim is sent to the tenants to see if they agree.
if they do not agree it can go to arbritration,unless you ticked the box to say you do not want it to go to arbritration, and i would recommend that you do that.
If you are get no response after 14 days then you can take it to single claim, that's when solicitor on your side has to witness.
It does not sound correct that the DPS are waiting to have their singleclaim part witnessed(as then it wouldn't be in single claim would it ?)
The DPS probably meant they are waiting for a response to your claim from the tenant.
Sounds like the agent hasn't got a clue , or maybe fobbing you off,