Having spent some time researching, and asking the opinion of many hydraulics specialists with regards to the use of counterbalance valves in closed loop systems, I have decided that the only way we will find out if it may work for us, is to try one. We ordered a unit from Sun hydraulics, it arrived this morning, very prompt service!
The counterbalance valve sits under our 4WREE proportional valve. We have two different cartridges, one for the bore side with a adjustable setting of 70 to 280bar and one for the annulus side with a setting of 28 to 100 bar. We started with the valves set to their factory defaults of 210 and 70 bar respectively. The leg seemed to be working pretty well at first, the up stroke was fine, but on the down stroke we started to notice oscillation. We tweaked the pressure setting of the annulus side, reducing it to approximately 50bar, this did help, but we couldn't get rid of the oscillation completely. Therefore we can only assume that we can't use the counterbalance valve in our system. At least now we know!