0203 1266 584

Freezing Injunctions

UK Litigation - Freezing Injunctions

UK Litigation Solicitors and Freezing Injunction Experts

Our London litigation 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 defendant is likely to dissipate his assets before trial of the claim, the court may grant an interim remedy in the form of a freezing injunction.

Claimants in commercial litigation cases may have good prospects of success at trial and obtaining a substantial award of damages. This may all be moot however if the defendant does not have the capacity to pay those damages, 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 damages must therefore be conducted at the outset of litigation, 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 defendant from disposing of assets to frustrate the claimant? This is where a freezing injunction can be effectively deployed. Once in place, so long as the assets frozen are of sufficient value to meet the damages claimed, plus legal costs and interest, the claimant can be relatively confident that the often time consuming litigation process will not end in a hollow judgment.

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 defendant has actually threatened to dispose of assets.

For defendants who are the subject of a freezing 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 court 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 injunction lifted at the next court hearing. Affidavit 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.