Conditional Fee Agreements: Express Termination-and-Payment Code Defeats Restitutionary Quantum Meruit After Repudiation

1. Introduction

The Winros Partnership v Global Energy Horizons Corporation [2026] EWCA Civ 654 is a Court of Appeal (Civil Division) decision (Lady Justice Asplin giving the leading judgment, with Lord Justice Lewison and Lord Justice Stuart-Smith concurring) arising out of a long-running dispute about solicitors’ fees under successive conditional fee agreements (“CFAs”) entered into for litigation against an opponent (“Mr Gray”).

The appellant firm (the solicitors) and the respondent client were parties to the final CFA dated 6 March 2013 (“CFA-3”). The core controversy became whether, after the solicitors accepted the client’s repudiatory breach and terminated the retainer, the client nonetheless owed fees for work done to date—either under the Solicitors Act 1974 assessment regime, or via a restitutionary quantum meruit founded on “failure of basis”.

The appeals addressed two distinct topics:

  • Abuse of process / second appeal permission: whether it was abusive for the client to raise a further liability defence (“Objection 1”) only after an earlier appeal had determined that the client had repudiated the retainer.
  • Merits: whether CFA-3 left “room” for unjust enrichment (restitutionary quantum meruit) notwithstanding an express termination clause (clause 14.3) allocating what is payable if the client fails to meet responsibilities.

2. Summary of the Judgment

2.1 Abuse of process (rolled-up permission to appeal / second appeal test)

  • The Court of Appeal refused permission to appeal against Marcus Smith J’s “Abuse of Process Decision” ([2025] EWHC 2044 (Ch)), applying the restrictive second appeal gateway in CPR r52.7.
  • Although Lady Justice Asplin disagreed with parts of the judge’s reasoning, she held the proposed appeal had no real prospect of success: the 2016 order did not require all liability issues to be determined at the preliminary issues hearing, and “Objection 1” arose naturally after the first appeal decision on repudiation.

2.2 Merits (unjust enrichment / failure of basis)

  • The Court of Appeal dismissed the Merits appeal from Marcus Smith J’s decision ([2025] EWHC 3362 (Ch)).
  • It held that, on the objective construction of CFA-3, the basis on which services were supplied included the contract’s calibrated risk allocation and in particular clause 14.3 (payment consequences if the client does not meet responsibilities). That clause directly addressed the relevant situation.
  • Therefore, the solicitors could not establish the “basis” required for a failure-of-basis unjust enrichment claim. A restitutionary quantum meruit would impermissibly subvert the contractual allocation of risk. The fact the solicitors strategically chose to terminate by accepting repudiation rather than invoking clause 14.3 did not create a restitutionary route.
  • The Court did not need to decide whether, or how, a restitutionary claim could be quantified within a section 70 Solicitors Act 1974 assessment, given its conclusion that no unjust enrichment claim lay.

3. Analysis

3.1 The contractual “engine”: CFA-3 as a risk-allocation instrument

The Court treated CFA-3 not as a bare retainer but as a “sophisticated and highly calibrated” bargain allocating litigation risk. Key moving parts were:

  • Win / lose structure: if the client “won”, it paid normal fees + disbursements + a 100% “Success Fee” (clause 5.1; clause 7). If it “lost”, the solicitors kept an “Advance Fee” (£300,000) and the client paid outstanding disbursements, but no Success Fee (clause 6).
  • Entire contract: it was common ground that CFA-3 was an “entire” contract—performance and entitlement were structured as a package.
  • Termination code (clause 14): the agreement expressly provided what happens if (i) the client ends it (14.1), (ii) the solicitors end it on rejection of settlement advice (14.2), (iii) the solicitors end it because the client fails responsibilities (14.3), or (iv) the solicitors end it for lack of reasonable prospects (14.4).

The decisive provision was clause 14.3: Rosenblatt can end this agreement if 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. The Court held this clause “directly addressed” the factual situation and formed part of the express basis on which the solicitors performed.

3.2 The Merits appeal: why unjust enrichment failed

3.2.1 The claimant’s route: “failure of basis” and restitutionary quantum meruit

The solicitors argued that because the client’s repudiation prevented completion of an entire contract and therefore prevented earning the contractual remuneration (including the Success Fee), there was a “failure of basis” entitling them to restitutionary payment for the value of services. They relied on authorities said to support quantum meruit following wrongful termination of an entire contract, including Planche v Colborn (1831) 172 ER 876, Lusty v Finsbury Securities [1991] 58 BLR 66, Elek v Bar-Tur [2013] 2 EGLR 159 and Mann v Paterson [2019] HCA 32.

3.2.2 The Court’s answer: the “basis” is objective and cannot contradict an express payment/termination allocation

Building on modern unjust enrichment authority, the Court held the first question is always: what was the basis on which the benefit (services) was conferred? That basis is ascertained objectively from the contract’s terms, structure and risk allocation.

The Court’s key conclusion was that it was not reasonable to imply a “basis” that the solicitors would be paid if the client wrongfully prevented completion, because CFA-3 already provided for that contingency through clause 14.3 (and because the Success Fee itself expressly reflected the risk of non-payment, clause 7).

In short: where the contract expressly governs the situation, the law will not “re-base” the parties’ relationship by invoking restitution. The solicitors’ choice to accept repudiation (and sue in damages) rather than terminate under clause 14.3 did not create a restitutionary entitlement.

3.2.3 No “category difference” creating a presumption of restitution on discharge by breach

A central submission was that repudiatory discharge is materially different from a subsisting/performed contract and makes unjust enrichment more available. The Court rejected any bright-line category rule. While discharge may make unjust enrichment claims more common in practice, availability still turns on the particular contract and whether it leaves a “vacuum”. Here, there was no vacuum because CFA-3 allocated the relevant risk and consequences.

3.2.4 The practical effect: no failure-of-basis trigger; assessment at nil stands

Because the Court held the “basis” contended for was not established, it followed that the “failure” question did not arise. The solicitors could not use unjust enrichment to avoid the consequence of the contractual pathway they did not invoke.

3.3 Precedents cited and how they shaped the reasoning

3.3.1 Unjust enrichment and contract: Dargamo and Barton as controlling modern statements

The Court relied heavily on Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149, [2022] 1 All ER (Comm) 1244 for the structured approach to unjust enrichment and, in particular, the insistence on an established “unjust factor” rather than free-floating fairness. Dargamo’s discussion of the “Obligation Rule” (no unjust enrichment where a valid legal obligation required the transfer) framed the analysis: restitution must not override contractually allocated risk.

Barton v Morris [2023] UKSC 3, [2023] AC 684 was deployed for the proposition that where parties stipulate when payment is due, the absence of a payment obligation in other circumstances excludes not only implied terms but also unjust enrichment claims that would contradict that allocation. The Court used Barton’s emphasis on contractual autonomy and “silence” (and, a fortiori, express provision) to reinforce that clause 14.3 foreclosed restitution.

In support of that policy, the judgment quotes Barton’s discussion of: MacDonald Dickens & Macklin v Costello [2012] QB 244 (restitution should not “shatter” contractual risk containment) and Pan Ocean Shipping Co Ltd v Creditcorp Ltd (The Trident Beauty)[1994] 1WLR 161 (where a contract “legislates” for an outcome, restitution is inappropriate).

3.3.2 Repudiation, discharge, and accrued rights: Photo Production and Johnson v Agnew

The Court situated termination for repudiatory breach within orthodox contract doctrine: acceptance of repudiation is prospective, discharging future primary obligations and substituting a secondary obligation in damages, without rescinding the contract ab initio. It cited Photo Production Ltd v. Securicor Transport Ltd, [1980] AC 827 and Johnson v Agnew [1980] AC 367, and also drew on Taylor v Motability Finance Ltd [2004] EWHC 2619 (Comm) (itself citing Lep Air Services Ltd v. Rolloswin Investments Ltd, [1973] AC 331).

This doctrinal platform supported the Court’s rejection of any assumption that repudiation itself generates a restitutionary entitlement; the contract’s risk allocation remains central, subject to damages unless displaced.

3.3.3 The “entire contract / quantum meruit” line of cases: treated as fact-specific and not determinative

The Court addressed but ultimately found little assistance in the older “entire contract” quantum meruit cases (Planche v Colborn (1831) 172 ER 876; Lusty v Finsbury Securities [1991] 58 BLR 66; Elek v Bar-Tur [2013] 2 EGLR 159) and the comparative Australian analysis in Mann v Paterson [2019] HCA 32. The Court’s reason was not that such claims can never exist after repudiation, but that each case depends on the particular contract and the objectively ascertained basis for performance. CFA-3’s express clause 14.3 meant the necessary basis for “failure of basis” could not be implied.

3.3.4 Abuse of process and second appeals: Johnson v Gore Wood, Koza, Orji, and the CPR r52.7 gateway

For the abuse of process issues, the Court reaffirmed the broad merits-based approach from Johnson v Gore Wood [2002] 2 AC 1 (Lord Bingham’s statement; Lord Millett on access to court) and the court’s inherent jurisdiction in Hunter v Chief Constable of the West Midlands Police [1982] AC 529. It also reiterated appellate restraint in evaluative abuse decisions by reference to Aldi Stores Ltd v WSP Group plc [2008] 1 WLR 748.

Importantly, the Court confirmed that Henderson-type abuse principles apply to interlocutory stages as well as final hearings: Koza v Koza Isletmeleri [2020] EWCA Civ 1018, [2021] 1 WLR 170 and Orji v Nagra [2023] EWCA Civ 1289 were cited to show this is settled, undermining any attempt to characterise the proposed appeal as raising a novel point.

Permission for a second appeal was refused by applying CPR r52.7 and the guidance in Uphill v BRB (Residuary) Ltd [2005] EWCA Civ 60, [2005] 1 WLR 2070 (second appeals are “exceptional”; an “important point” must be unestablished; “compelling reason” requires very strong prospects plus something more). The Court also referred to JD (Congo) v Home Secretary [2012] 1 WLR 3273 and R (Cart) v Upper Tribunal [2012] 1 AC 663 on the meaning of “compelling reason”.

3.4 Doctrinal significance and likely impact

3.4.1 For CFAs and solicitor-client retainers

The judgment strengthens a principle of broad practical importance in CFA disputes: where a CFA contains an express termination-and-payment mechanism covering the relevant contingency, that mechanism will be treated as part of the “basis” for performance and will generally defeat a restitutionary quantum meruit framed as failure of basis. Put differently, sophisticated CFA risk allocation is not to be re-written by restitution, even where the solicitor terminates by accepting repudiation.

The decision encourages careful pleading and remedial discipline: if the contract gives an election (here, terminate under clause 14.3 for fees-to-date, or accept repudiation and claim damages), the party’s strategic election carries consequences, and restitution will not ordinarily be available to replicate the foregone contractual pathway.

3.4.2 For unjust enrichment more generally

The Court’s approach aligns with the modern insistence that unjust enrichment is not a discretionary fairness jurisdiction. It reinforces the idea that “failure of basis” cannot be used to circumvent express contractual provisions that allocate risk and specify payment consequences.

3.4.3 For abuse of process in evolving litigation (including costs proceedings)

On the procedural side, the refusal of second appeal permission illustrates that:

  • The mere fact a point “could have been raised earlier” does not, without more, make it abusive; the inquiry remains a broad, fact-sensitive evaluation.
  • Where earlier case management did not clearly require all liability issues to be resolved at once, and a later defence emerges naturally from an appellate ruling, a Henderson-style strike-out argument may have weak prospects—especially under the CPR r52.7 second appeal filter.

4. Complex Concepts Simplified

Conditional Fee Agreement (CFA)
A funding agreement where the solicitor’s entitlement to some or all fees (and often an uplift “success fee”) depends on an outcome (e.g., “winning”). It is a risk-sharing contract: the solicitor may receive less (or nothing beyond an advance) if the case is lost.
Entire contract
A contract where payment is conditioned on complete performance (or on a specified end-state), rather than accruing proportionately as work is done.
Repudiatory breach and acceptance
A serious breach entitling the innocent party to treat the contract as ended going forward. Ending for repudiation does not erase what happened; it discharges future primary obligations and replaces them with a damages claim for future non-performance.
Unjust enrichment / failure of basis
A restitutionary claim requiring (i) enrichment at the claimant’s expense, (ii) an “unjust factor”, such as “failure of basis”: a benefit was conferred on the shared understanding that the recipient could keep it only if a condition occurred; if it does not, it must be returned/paid for. But if the contract already allocates the risk and specifies consequences, “failure of basis” cannot be used to contradict that allocation.
Restitutionary quantum meruit
A claim for a reasonable sum for services, not based on the contract price but on the value of work done, framed as restitution rather than contract damages.
Abuse of process (Henderson v Henderson type)
A procedural doctrine preventing misuse of the court’s process—often by raising matters later that should have been raised earlier—assessed by a broad, merits-based evaluation balancing fairness, finality, and efficient use of court resources.
Second appeal permission (CPR r52.7)
A stricter permission test: a second appeal is exceptional and requires real prospects plus an important new point, or some other compelling reason.

5. Conclusion

[2026] EWCA Civ 654 confirms that a carefully drafted CFA’s express termination-and-payment provisions can form part of the objective “basis” for performance and thereby block a restitutionary quantum meruit framed as “failure of basis” after repudiation. Where the contract has already allocated the relevant risk and stated what is payable on early termination (here, clause 14.3), restitution will not be used to reallocate losses or recreate a payment route a party elected not to take.

Procedurally, the decision also illustrates the difficulty of pursuing a second appeal on abuse of process in evolving costs litigation: absent a clear earlier determination or a clear requirement to bring all liability points at once, and especially where a new defence follows from an appellate ruling, the CPR r52.7 gateway will be hard to satisfy.