CFA Termination | Why Accepting Repudiation Instead Of Using Contractual Rights Left Solicitor With Nothing

Where a conditional fee agreement contains express provisions entitling a solicitor to fees upon termination for client default, the solicitor cannot bypass those provisions by accepting repudiation and then claiming a restitutionary quantum meruit for work done.

CFA termination repudiation solicitor fees conditional fee agreement

WINROS PARTNERSHIP V GLOBAL ENERGY HORIZONS CORPORATION [2025] EWHC 3362 (Ch)

In The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 3362 (Ch), Mr Justice Marcus Smith dismissed an appeal from Senior Costs Judge Gordon-Saker’s decision assessing a solicitor’s bill at nil. The solicitor had terminated a conditional fee agreement by accepting the client’s repudiatory breach, rather than invoking an express contractual termination clause entitling it to fees for work done. The solicitor then sought payment via a restitutionary quantum meruit, arguing total failure of basis. Applying the “Obligation Rule” from Dargamo Holdings Ltd v Avonwick Holdings Ltd and principles from Barton v Morris, the court held that no unjust enrichment claim arose where the CFA expressly allocated termination risk through clause 14.3. To permit a quantum meruit would circumvent the contractual risk allocation the parties had agreed. Obiter, the court noted that generalised unjust enrichment claims were inappropriate for determination within a Solicitors Act detailed assessment. The decision confirms that solicitors who bypass express CFA termination rights in favour of accepting repudiation risk recovering nothing.
Link to full judgment

The question is whether the existence of a choice for Rosenblatt to end CFA-3 by other means, renders a restitutionary remedy possible. In my judgement, it cannot, because CFA-3 has already articulated what is to happen in this kind of case: see clause 14.3. The existence of the common law right in damages is not to open the way to an alternative restitutionary claim that is duplicative of clause 14.3: that would be to upset the considered exercise in risk allocation expressly contained in CFA-3, dealing with precisely this case. The common law remedy is a 'last resort', really intended for those cases not anticipated in clause 14.

Citations

Underwood, Son & Piper v. Lewis [1894] 2 QB 310 Solicitor-client retainers were generally entire contracts, requiring full performance before fees could be claimed, absent termination for good cause. Richard Buxton (a firm) v. Mills-Owens [2010] EWCA Civ 122 A solicitor who terminates an entire contract retainer for good cause may be entitled to recover fees and disbursements for work done prior to termination under a debt claim. Vansandau v. Browne (1832) 9 Bing 402 A solicitor could recover costs for work done before terminating a retainer with reasonable cause and notice, even if the contract was not completed. Taylor v. Motability Finance Ltd [2004] EWHC 2619 (Comm) Upon acceptance of a repudiatory breach, future obligations are discharged but accrued rights remain; executory obligations are replaced by a secondary duty to pay damages. Johnson v. Agnew [1980] AC 3677 Where a contract is terminated for repudiatory breach, accrued rights remain in place and obligations from future performance are replaced with a right to damages. Photo Production Ltd v. Securicor Transport Ltd [1980] AC 827 Termination for repudiatory breach does not rescind the contract ab initio; future obligations are discharged while accrued rights and liabilities remain. Lep Air Services Ltd v. Rolloswin Investments Ltd [1973] AC 331 Upon termination for breach, primary contractual obligations are discharged and replaced by an obligation to pay damages for losses from non-performance. Dargamo Holdings Ltd v. Avonwick Holdings Ltd [2021] EWCA Civ 1149 A valid and express contractual obligation negated a claim for unjust enrichment based on an alleged alternative basis, due to the “Obligation Rule”. Barton v. Morris [2023] UKSC 3 Where a contract specifies the conditions under which payment is due, a failure to meet those conditions excludes any claim in unjust enrichment for partial performance under different terms. Jones v. Richard Slade and Co Ltd [2022] EWHC 1968 (QB) Broad or generalised claims such as duress or breach of fiduciary duty are outside the proper scope of a detailed assessment under the Solicitors Act 1974 and must be determined separately.
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Key Points

  • Where a conditional fee agreement contains an express clause providing for termination and payment of fees in the event of the client’s default, that clause constitutes the parties’ agreed allocation of risk for that scenario. A solicitor who elects to terminate for repudiatory breach instead of invoking the contractual mechanism cannot circumvent this allocation by claiming in unjust enrichment for a failure of basis. [53-55]
  • A claim for a restitutionary quantum meruit based on a total failure of basis will not be available where the contract under which the benefit was conferred has expressly provided for the financial consequences of the event that caused the contract to end. To allow such a claim would impermissibly redistribute the contractual risks the parties have agreed. [41, 45, 48-49]
  • The detailed assessment process under the Solicitors Act 1974 is a regulatory review of a bill’s reasonableness, not a vehicle for enforcing debts or determining generalised claims such as unjust enrichment. While the court has jurisdiction, such freestanding claims are not a proper matter for determination within the assessment and should be pursued in separate proceedings. [58, 60, 62-63]
  • Where a solicitor terminates an entire contract for good cause, the established common law rule entitling them to payment for work done is a default position. This default is displaced by any express contractual terms governing termination and payment, which the parties are free to agree. [27, 32-33]
  • In considering a claim for unjust enrichment based on failure of basis following a contract’s discharge, the court must examine not only the express terms but also the silences in the agreement. A contractual silence as to payment in certain circumstances often implies a positive decision that no obligation to pay arises, excluding both implied terms and restitutionary claims. [45-46]

"The 'allocation of risk' analysis is no more than the Obligation Rule described from a different standpoint. The point is that the basis of a contract is as much affected by what is positively agreed as by what is positively not agreed, as Barton itself very clearly demonstrates."

Key Findings In The Case

  • Rosenblatt terminated the retainer (CFA-3) by accepting Global Energy’s repudiatory breach rather than relying on the express termination provision in clause 14.3, thus foregoing any entitlement to fees under that clause [6], [35], [54].
  • CFA-3 was found to be an “entire contract,” meaning Rosenblatt’s right to contractual payment depended on full performance, which had not occurred due to the termination of the agreement before the underlying litigation concluded [23–24], [26].
  • The parties had contractually allocated the risk of early termination in CFA-3, particularly through clause 14.3, which provided for Rosenblatt’s entitlement to fees for work done only if that clause was invoked—a fact determinative of the costs assessment outcome [14], [53–55].
  • The court found there was no “total failure of basis” sufficient to sustain a restitutionary claim for fees because CFA-3 expressly addressed the consequences of contract termination, thereby excluding an unjust enrichment remedy in the costs assessment process [41], [53–55].
  • The 2016 bill rendered by Rosenblatt was assessed at nil because, upon Rosenblatt’s election to terminate for repudiatory breach (rather than under the contract), no accrued contractual entitlement to payment remained, and the detailed assessment process under the Solicitors Act 1974 could not be used to assess a standalone unjust enrichment claim [13–16], [58–60].

"It follows that the process is not one that is appropriate to resolving a claim for unjust enrichment, where unjust enrichment is the complete basis for the claim (albeit based upon a contractual failure of basis). The point of the process is to enable – outside of enforcement proceedings – a party chargeable with a bill to have that bill assessed, it being foundational to the process that the solicitor's claim against the party chargeable is founded in contract, albeit a contractual claim with a significant 'regulatory' overlay."

The High Court’s decision in The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 3362 (Ch) confirms that contractual risk allocation in a CFA precludes unjust enrichment claims where the agreement already provides for the consequences of termination.

Background

The case concerned an appeal by The Winros Partnership (formerly Rosenblatt Solicitors) against a decision of Senior Costs Judge Gordon-Saker in the Senior Courts Costs Office. This was the second appeal in the long-running costs dispute between these parties; the procedural history and the abuse of process challenge to late-raised objections was considered in the First Judgment, covered in our earlier post.

The underlying dispute arose from a series of conditional fee agreements (CFAs) between Rosenblatt and its client, Global Energy Horizons Corporation, for litigation services. Three CFAs were entered: CFA-1, CFA-2, and CFA-3. The relationship deteriorated, leading Rosenblatt to terminate CFA-3 by accepting Global Energy’s repudiatory breach in a letter dated 24 February 2016. This termination was subsequently held to be valid by Trower J in earlier proceedings [§7].

In April 2016, Global Energy commenced proceedings under the Solicitors Act 1974 seeking detailed assessment of four bills rendered by Rosenblatt [§9]. The key bills were a 2012 bill (for work under CFA-2) and a 2016 bill (for work under CFA-3). Trower J had already determined that the 2012 bill was not a statute bill and conferred no immediate right to payment [§11]. The appeal focused on the 2016 bill, delivered shortly after termination, which Rosenblatt sought to have assessed. Rosenblatt had also commenced separate Chancery proceedings for damages arising from the termination, which were stayed pending the outcome of the costs assessment [§12, §37].

At the detailed assessment hearing, Global Energy raised “Objection 1”, contending that Rosenblatt was not entitled to payment of its fees for work done up to the termination date where no “win” had been achieved under the CFA [§4, §13]. The Senior Costs Judge framed the issue as: where a CFA retainer is terminated following the client’s repudiation, is the solicitor entitled to payment of fees if no success fee had been achieved? He concluded that Rosenblatt was not entitled to deliver the 2016 bill, that Global Energy was not liable to pay it, and therefore the bill must be assessed at nil [§65–66]. It was against this decision that Rosenblatt appealed.

Costs Issues Before the Court

The core costs issue was the entitlement of a solicitor to payment of fees under a conditional fee agreement terminated due to the client’s repudiatory breach, where the condition for payment of the success fee (a “win”) had not been met. The appeal required the court to determine:

      1. Whether the Senior Costs Judge erred in law in concluding that a solicitor could not recover fees (absent a success fee) following termination for repudiation, distinguishing the position from termination of an “ordinary” retainer for good cause.
      2. Whether Rosenblatt had an alternative claim in unjust enrichment (a quantum meruit) for a total failure of basis, which could found an entitlement to payment, and if so, whether such a claim could properly be determined within a detailed assessment proceeding under the Solicitors Act 1974.

The appeal proceeded on the agreed basis that CFA-3 was an entire contract and had completely replaced CFA-2 [§20, §23].

The Parties’ Positions

Rosenblatt’s Position: Rosenblatt contended the Senior Costs Judge erred. It argued that the long-established common law rule, as stated obiter in Richard Buxton (a firm) v Mills-Owens [2010] EWCA Civ 122, entitled a solicitor terminating an entire contract for good cause to be paid for work done [§27–28]. It submitted this principle should apply equally to CFAs. Crucially, Rosenblatt argued that its primary case on appeal was now a claim in unjust enrichment [§38, §57]. It contended that the basis for its work under CFA-3—performance leading to a “win” or, if not, termination under the agreement’s specific clauses—had totally failed when Global Energy’s repudiatory breach forced termination outside the contractual framework. Rosenblatt submitted that this created a vacuum allowing a restitutionary quantum meruit for the value of services rendered. It argued this claim could and should be determined within the detailed assessment.

Global Energy’s Position: Global Energy supported the Senior Costs Judge’s reasoning. It argued that CFA-3’s express terms, particularly clause 14.3, constituted a detailed contractual scheme allocating risk for termination due to the client’s failure to meet responsibilities, while leaving the common law damages remedy intact. Clause 14.3 provided [§14]:

“Rosenblatt can end this agreement if it believes the Client does not meet its responsibilities. If this happens, the Client will have to pay Rosenblatt’s fees for the work done to the termination date and disbursements.”

By choosing to accept a repudiatory breach instead of invoking clause 14.3, Rosenblatt elected a different remedial path (a claim for damages) [§37]. The contract had anticipated and provided for the scenario, allocating the risk that Rosenblatt would recover no fees if it did not use the clause 14.3 mechanism. Consequently, there was no room for a claim in unjust enrichment, as to allow one would upset the parties’ contractual risk allocation [§47–48]. Global Energy also argued that a freestanding unjust enrichment claim was not a matter for determination on a Solicitors Act assessment.

The Court’s Decision

Mr Justice Marcus Smith dismissed the appeal, upholding the Senior Costs Judge’s decision that the 2016 bill should be assessed at nil [§56]. The court’s analysis focused on two key areas: the claim in unjust enrichment and the propriety of the detailed assessment forum.

On the unjust enrichment claim, the court held there had been no total failure of basis. Applying principles from Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149 and Barton v Morris [2023] UKSC 3, the court emphasised the “Obligation Rule” and the importance of respecting contractual risk allocation [§41–49]. CFA-3’s clause 14 was a detailed provision anticipating various contingencies, including client non-performance (clause 14.3). This clause expressly stipulated the financial consequence: payment of normal fees and disbursements, but no success fee [§53].

The court found that while the common law remedy for repudiatory breach co-existed with these contractual terms, its existence did not create a vacuum allowing a restitutionary remedy that duplicated or circumvented the specific risk allocation in clause 14.3 [§54–55]. The parties had expressly agreed what would happen if Rosenblatt ended the agreement because Global Energy did not meet its responsibilities. To permit a quantum meruit claim in these circumstances would unjustly redistribute the risks expressly allocated by the contract. The court concluded that the common law remedy was a “last resort”, really intended for those cases not anticipated in clause 14 [§55]—and since clause 14.3 specifically addressed this scenario, there was no gap for restitution to fill. For substantially the same reasons as the Senior Costs Judge, Rosenblatt’s restitutionary claim failed [§56].

Obiter, the court also addressed the appropriateness of determining such a claim within a detailed assessment [§57–64]. Relying on Jones v Richard Slade and Co Ltd [2022] EWHC 1968 (QB), it held that the Solicitors Act assessment process is a regulatory review of a bill’s reasonableness, not a vehicle for enforcing debts or determining generalised claims such as unjust enrichment [§60–61]. While the court had jurisdiction to decide the point, it was not the appropriate forum [§63]. Such claims, if genuinely arguable, should be pursued in separate High Court proceedings, with the assessment potentially stayed. The effective dismissal of the claim within the assessment was therefore correct [§64].

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WINROS V GLOBAL ENERGY HORIZONS CORPORATION [2025] EWHC 3362 (CH) | MR JUSTICE MARCUS SMITH | SENIOR COSTS JUDGE GORDON-SAKER | CFA-1 | CFA-2 | CFA-3 | OBJECTION 1 | INDEMNITY COSTS | ENTIRE CONTRACT | TERMINATION FOR REPUDIATORY BREACH | CONDITIONAL FEE AGREEMENT | CLAUSE 14.3 | STATUTE BILL | SECTION 70 SOLICITORS ACT 1974 | FAILURE OF BASIS | QUANTUM MERUIT | UNJUST ENRICHMENT | OBLIGATION RULE | DARGAMO HOLDINGS LTD V AVONWICK HOLDINGS LTD | BARTON V MORRIS [2023] UKSC 3 | PHOTO PRODUCTION LTD V SECURICOR TRANSPORT LTD [1980] AC 827 | RICHARD BUXTON (A FIRM) V MILLS-OWENS [2010] EWCA CIV 122 | JONES V RICHARD SLADE AND CO LTD [2022] EWHC 1968 (QB) | JOHNSON V AGNEW | ASSESSMENT AT NIL | REGULATORY OVERLAY | SUCCESS FEE | ADVANCE FEE | DEBT CLAIM V DAMAGES CLAIM | DEFAULT RULE | IMPLIED TERM TO TERMINATE | RESTITUTIONARY REMEDY LIMITS | TOTAL FAILURE OF BASIS | STATUTORY ASSESSMENT FRAMEWORK | APPROPRIATENESS OF FORUM | DAMAGES CLAIM POST-TERMINATION | INTERPRETATION OF RETAINER CLAUSES | RISK ALLOCATION IN CFAS | CLAIM IN RESTITUTION IN COSTS PROCEEDINGS | LIMITS OF SECTION 70 ASSESSMENT | RELATIONSHIP BETWEEN BILLING AND CONTRACTUAL ENTITLEMENT | STAYED DAMAGES CLAIM (BL-2022-000318) | INTERACTION BETWEEN CFAS AND STATUTE BILLS.