Court of Appeal dismisses City firm’s appeal in conditional fee agreements dispute

A City firm has suffered a further setback in a ‘lengthy and ongoing dispute’ concerning fees due under conditional fee agreements.

The Winros Partnership v Global Energy Horizons Corporation  relates to a period in 2009 when Winros, formerly Rosenblatt Solicitors, acted for environmental consultancy Global Energyagainst a former associate accused of misappropriating an opportunity to develop innovative technology. Rosenblatt terminated one of the three conditional fee agreements in 2016 over - the firm said -  Global Energy’s repudiatory breach of contract.

Rosenblatt’s appeal against a senior costs judge’s decision to assess its costs at nil was dismissed. The firm then appealed to the Court of Appeal against decisions made over its abuse of process and merits claim.

The CoA refused permission to appeal in relation to the abuse of process decision. It found that ‘even if permission were granted’ the substantive appeal, which ‘has no real prospect of success’, would not have been allowed. The merits appeal, for which permission had already been granted, was also dismissed.

In lead judgment, Lady Asplin, with whom Lord Justice Lewison agreed, said the abuse of process appeal, in which Rosenblatt argued four grounds of appeal including that the judge ‘erred in holding that there was nothing in Global Energy’s conduct to criticise because it was incumbent on the parties to raise all matters which could sensibly and efficiently be dealt with as preliminary issues, including alternative defences’, had ‘no real prospect of success’.

She added: ‘In the absence of either an agreement or a requirement that all liability issues be dealt with before Master James in 2016 and given the broad merits based decision with which we are concerned, I do not consider that there is a real prospect of success in arguing that there was an abuse of process in failing to raise Objection 1 at the hearing in late 2016.

‘Had it been necessary, I would also have decided that the grounds of appeal in relation to the Abuse of Process Decision do not raise important points of principle or practice. I do not consider that there is a compelling reason why an appeal should be heard in this case.’

Dismissing the merits appeal, in which the firm’s five grounds of appeal included that the judge ‘failed to identify and address the circumstances in which the termination of an entire contract (for services) will give rise to a failure of basis’, Lord Justice Stuart-Smith said he agreed with Lady Justice Asplin.

He said: ‘There may be circumstances where silence on a particular point leaves room that may be filled by a process of implication. That, however, is not this case.

‘The basis of the contract included the provision in clause 14.3, which directly addressed the situation that would arise when Rosenblatt can end the agreement because its client does not meet its responsibilities. 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. There is no silence and no basis for an assertion that the basis of the contract has failed.’

The firm’s damages claim, which was stayed pending the CoA’s decision, is expected to proceed.