The Court of Appeal (Lewison, Asplin and Stuart-Smith LJJ) today handed down judgment in Winros Partnership (formerly known as Rosenblatt Solicitors) v Global Energy Horizons Corporation [2026] EWCA Civ 654, providing an important consideration of the relationship between termination and failure of basis.
Winros (then known as Rosenblatt Solicitors) had acted for GEHC in a dispute with a former associate, Robert Gray, on a contingent fee basis. Following the breakdown of their relationship, Winros terminated the retainer before any ‘win’ occurred under the conditional fee agreement. Such termination was at common law, rather than under Winros’ contractual termination powers in clause 14 of the conditional fee agreement.
Winros delivered a bill of costs, seeking payment on a ‘quantum meruit’ basis. GEHC sought assessment of that bill under s.70 Solicitors Act 1974, and in the Senior Courts Costs Office, Gordon-Saker SCJ held that no common law restitutionary claim for failure of basis was possible given the existence of a contractual power to terminate for cause which Winros deliberately chose not to exercise. He further held that it was not an abuse of process for Winros to raise this argument after a number of preliminary issues had been ordered and decided by Costs Master James and on appeal by Trower J.
Marcus Smith J dismissed Winros’ appeals against both decisions: [2025] EWHC 2044 (Ch) and [2025] EWHC 3362 (Ch). Winros obtained permission for a second appeal on the restitution issue (the Merits Appeal) and a ‘rolled-up’ hearing on the abuse issue (the Abuse Appeal).
On the Abuse Appeal, Asplin LJ (with whom Lewison and Stuart-Smith LJ concurred) considered that, in the absence of any agreement or requirement that all liability issues be dealt with once and for all at the preliminary issue hearing, there could be no abuse, and the appeal had no prospect of success (at [36]). In any event, the second appeal criteria were not met (at [37]-[39]). The Court therefore refused permission to appeal.
On the Merits Appeal, the Court of Appeal reviewed the leading authorities and accepted (at [63]) GEHC’s submission that where the claim is for failure of basis, the court must first determine the basis upon which services were rendered, before deciding whether that basis has failed. Asplin LJ further accepted, termination not being a form of rescission, that whether termination gives rise to a failure of basis will depend on the particular contract and the circumstances of the case. Previous cases are unlikely to provide a clear guide to that question (at [64]-[65]). Where, as in this case, the contract dealt with the consequences of the very eventuality that came to pass, it was not possible to have an additional implicit basis which resulted in different consequences (at [67]-[71]). As Stuart-Smith LJ put it (at [73]) the basis was clause 14.3, and clause 14 of the contract governed notwithstanding Winros’s tactical choice to terminate for repudiatory breach.
Matthew Hoyle acted for GEHC (led by Benjamin Williams KC of 4 New Square), instructed by Eversheds Sutherland (International) LLP. Matthew acted as advocate before the Court of Appeal on the Merits Appeal.
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