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Freezing Injunctions

UK Litigation - Freezing Injunctions

UK Litigationlitigation: the bringing of a lawsuit or legal claim in cour... Solicitors and Freezing Injunctionfreezing injunction: previously called a mareva injunction; ... Experts

Our London litigationlitigation: the bringing of a lawsuit or legal claim in cour... solicitors frequently act in cases where freezing injunctions are obtained. Freezing injunctions prevent a party from disposing of assets or moving them outside of England and Wales until a claim has been decided by the court. Where a claimant can show that a defendantdefendant: the respondent against whom court proceedings are... is likely to dissipate his assets before trial of the claim, the court may grant an interim remedyinterim remedy: in civil litigation, a court order, also kno... in the form of a freezing injunctionfreezing injunction: previously called a mareva injunction; ....

Claimants in commercial litigation cases may have good prospects of success at trial and obtaining a substantial award of damagesdamages: in litigation and dispute resolution, financial com.... This may all be moot however if the defendantdefendant: the respondent against whom court proceedings are... does not have the capacity to pay those damagesdamages: in litigation and dispute resolution, financial com..., as well as the legal costs and interest often awarded to a successful claimant. Careful investigations on a defendant’s asset holdings and ability to pay damagesdamages: in litigation and dispute resolution, financial com... must therefore be conducted at the outset of litigationlitigation: the bringing of a lawsuit or legal claim in cour..., to ensure that a claimant is not throwing good money after bad.

Even where those investigations reveal adequate asset holdings however, what is to stop a defendantdefendant: the respondent against whom court proceedings are... from disposing of assets to frustrate the claimant? This is where a freezing injunctionfreezing injunction: previously called a mareva injunction; ... can be effectively deployed. Once in place, so long as the assets frozen are of sufficient value to meet the damagesdamages: in litigation and dispute resolution, financial com... claimed, plus legal costs and interest, the claimant can be relatively confident that the often time consuming litigationlitigation: the bringing of a lawsuit or legal claim in cour... process will not end in a hollow judgmenthollow judgment: a court judgment for the payment of money t....

Claimants seeking freezing injunctions must be able to show:

  • A good arguable case. Written evidence, in the form of affidavits, must be placed before the court showing that the claimant’s case is a good and arguable one.
  • Risk of dissipation. The affidavit evidence must show that the defendant holds assets and is likely to move them out of the jurisdiction or dispose of them. Courts will be more likely to find that there is a risk of dissipation and grant the injunction where the allegations against the defendant involve fraudor dishonesty, or where the defendantdefendant: the respondent against whom court proceedings are... has actually threatened to dispose of assets.

For defendants who are the subject of a freezing injunctionfreezing injunction: previously called a mareva injunction; ... obtained against them at a “without notice” ex parte hearing, being served with the court documents can come as a shock to say the least. Not only will the court’s order contain a Penal Notice warning of contempt of courtcontempt of court: the criminal offence of acting in breach ... or imprisonment, but the order will usual require provision of detailed information about a defendant’s assets within a short period of time. It is important for defendants in these situations to understand that they are entitled to be fairly heard by the court, and potentially have the freezing injunctionfreezing injunction: previously called a mareva injunction; ... lifted at the next court hearing. Affidavitaffidavit: in litigation and dispute resolution, a statement... evidence in reply must be filed which contradicts the claimant’s evidence that there is a good arguable case and a risk of dissipation of assets.

If you require advice on the matters discussed above, regardless of whether you are a claimant or defendant, you can contact  South Bank Legal today for a confidential discussion.