The Court of Appeal has handed down an important judgment concerning the interplay between the law of contract and principles of unjust enrichment: Winros Partnership (formerly Rosenblatt) v Global Energy Horizons [2026] EWCA Civ 654. The decision provides guidance on how the courts will treat claims in unjust enrichment founded on an alleged ‘failure of basis’ when a contract is terminated for repudiatory breach.
The successful Respondent, Global Energy Horizons (Global), was represented by 4 New Square’s Benjamin Williams KC, leading Matthew Hoyle of One Essex Court.
Background
The litigation arose from a long-running dispute over solicitors’ fees. In 2009, the Appellant, a well-known firm of solicitors then known as Rosenblatt, was retained by Global under a series of conditional fee agreements (CFAs), the last of which was executed in March 2013 (“CFA-3”).
In February 2016, Rosenblatt terminated CFA-3, alleging a repudiatory breach by Global. At an earlier stage of the proceedings, Trower J held that Global had indeed committed a repudiatory breach.
Despite electing to accept the repudiatory breach and assert a claim for damages, Rosenblatt also purported to bill Global for the work it had done pre-termination, and appropriated all the funds belonging to Global which it held (the total sums paid exceeding £5 million).
Global argued that Rosenblatt had no right to do this. At the point of termination, no ‘win’ had been achieved under the CFAs, so there was no contractual entitlement to payment. Having accepted Global repudiatory breach, Rosenblatt’s only course was to sue for damages (which Global said it expected to be assessed at zero, because Rosenblatt was in repudiatory breach as well).
In proceedings under the Solicitors Act, Rosenblatt was ordered to repay Global all the payments it had taken, together with interest, the court agreeing it had no contractual entitlement to the money, and its only remedy was to claim damages.
Rosenblatt appealed, saying that the repudiatory breach constituted a ‘failure of basis’ and that its appropriation of Global’s funds was justified as a quantum meruit, Global having been unjustly enriched to the value of Rosenblatt’s work.
Crucially however, CFA-3 had contained a detailed termination regime under Clause 14. Clause 14.3 explicitly provided that if Global Energy failed to meet its contractual responsibilities, Rosenblatt could terminate the agreement and recover its base fees for work done up to the date of termination, plus disbursements.
However, rather than electing to terminate under this contractual mechanism, Rosenblatt chose to accept Global Energy’s repudiatory breach at common law instead. Global argued that there was no ‘failure of basis’ in these circumstances. The contract had provided a basis for the consequences of client breach. That basis had not failed simply because Rosenblatt chose not to invoke clause 14.3. What Rosenblatt was in fact purporting to do was to rewrite the contract and its risk allocation by using principles of unjust enrichment to justify payment on a different basis from that stipulated by clause 14.3.
The Interplay Between Contract and Unjust Enrichment
The Court of Appeal dismissed Rosenblatt’s appeal, reaffirming the principle that the law of unjust enrichment cannot be deployed to subvert the express risk allocation freely negotiated by parties in a valid contract. (An alternative argument by Rosenblatt, that Global’s case amounted to a Henderson v Henderson abuse of process, was also dismissed.)
Lady Justice Asplin, giving the leading judgment, addressed several foundational points regarding discharged contracts and failure of basis:
- No ‘Category Difference’ for Discharged Contracts
The Court rejected Rosenblatt’s submission that the prospective discharge of a contract following an accepted repudiatory breach opens an automatic gateway to restitutionary remedies. The Court noted that an accepted repudiation does not rescind a contract ab initio; rather, accrued rights remain intact, and unperformed primary obligations are substituted by a secondary common law obligation to pay damages. Consequently, there is no automatic ‘vacuum’ or ‘bright line’ difference that alters the contractual allocation of risk.
- Express Contractual Schemes Exclude Restitution
The core of the appeal centred on clause 14.3. The Court noted that CFA-3 was a sophisticated, highly calibrated agreement that expressly anticipated the precise contingency that occurred – namely, the client failing to meet its responsibilities.
The Court held that because the contract explicitly provided a scheme for the consequences of a party’s breach, it was impossible to imply an alternative restitutionary basis that ran contrary to those agreed terms. Lady Justice Asplin observed: ‘Where the very circumstances are addressed in the contract… it is not possible to imply a different basis for the relationship between the parties… a restitutionary claim would upset the considered exercise of risk allocation expressly contained in CFA-3 and be contrary to clause 14.3 which dealt precisely with the circumstances which arose.”
- The Effect of Strategic Choices
The Court further held that Rosenblatt’s failure to invoke the contractual remedy under clause 14.3 did not mean the underlying basis of the contract had failed. It simply meant the firm had made a tactical choice to pursue common law damages instead of the contractually specified recovery. Lord Justice Stuart-Smith stated, in his concurring judgment: ‘The basis of the contract included the provision in clause 14.3, which directly addressed the situation… That situation arose here and clause 14.3 governs the parties’ obligations notwithstanding Rosenblatt’s strategic and tactical decision to terminate the contract by accepting their client’s repudiatory breach.”
Significance
This decision serves as a significant reminder to commercial litigators and transactional draftsmen alike. It reinforces the principle of contractual autonomy, confirming that where commercial parties explicitly map out the financial consequences of a breach, the courts will hold them to that risk allocation. A non-defaulting party cannot escape its contractual bargain or the limitations of its agreed remedies by electing to accept a repudiatory breach and claiming through the law of unjust enrichment. There is a lesson for drafters too. The dispute might have been avoided altogether if clause 14.3 had explicitly stated that it was intended as a complete codification of the consequences of client breach, which ousted alternative common law remedies.
Benjamin Williams KC of 4 New Square and Matthew Hoyle of One Essex Court were instructed by David Flack and Glenn Newberry of Eversheds Sutherland (International) LLP on behalf of the successful Respondent, Global Energy Horizons Corporation.
Read the full judgement here.
