A-Z guide to freezing injunctions - a practical alphabet (almost)

Posted: 19/10/2015

Adequate remedy - the applicant must show why compensatory damages are not an adequate remedy. 

Brace yourself - if you are the applicant, prepare for the respondent to criticise and challenge your application. If you are the respondent, prepare to do battle! 

CPR 25 - the Rule, and its practice direction. Have you read it recently? Read it again! 

Dissipation - what evidence is there that the respondent will/not dispose of his assets? 

Ex parte hearing - the court will only to agree to grant an injunction without notice if there is good reason to do so: ie exceptional urgency and/or evidence of dissipation.

Full and frank disclosure - the applicant must present all material elements of the case to the court, both legal and factual, whether they support or undermine the application. 

Good arguable case - the minimum threshold for obtaining an injunction. 

Honesty is definitely the best policy - failure to comply with the duty to give full and frank disclosure throughout the life of the injunction may result in the application failing or an injunction being discharged. 

Indemnity costs may be ordered against an applicant who has breached their ongoing duty of full and frank disclosure. 

Just and convenient - the applicant must convince the court that making the order would be just and convenient. 

Keep it current - applicants must tell the other parties and the court of any new information and evidence that might affect the injunction, and any material change in their financial circumstances. 

Look at both sides - applicants should be prepared to consider what the respondent’s answer might be, and to be able to present it to the court as part of an ex parte application. 

Maximum sum order - the court will often order a maximum sum of assets to be frozen, based on the value of the applicant’s claim, plus potentially interest and costs. 

Nerves of steel - definitely helpful: seeking or defending an injunction is often very time urgent, intense and stressful. 

Ownership - clear evidence is needed as to whether the respondent is the legal or beneficial owner of the assets which form the subject of the injunction. 

Penal notice sets out the consequences for the respondent of breaching the freezing order. It is important that the applicant uses the correct form of wording in the penal notice and puts it in the right place. 

eQuitable bars - not a place to drown your sorrows, but reasons why the applicant should not be granted the order: acquiescence, delay, lack of clean hands. 

Return date - the date on which all parties appear before the court to decide whether the injunction should be continued, discharged or varied. 

Service - applicants should serve respondents (and any third parties believed to hold their assets) promptly and personally with a copy of the application notice, supporting evidence, full note of the hearing, and the order made by the court. 

Third parties - will the injunction adversely affect any third parties? Applicants may be liable to any such third parties for damages. 

Undertaking in damages - an applicant must undertake to the court to compensate the respondent if they can show that the order should not have been made. The undertaking may well be substantial, and the applicant may need to provide security. 

Verbatim note - a verbatim note must be made of an ex parte hearing and provided to the respondent. 

Worldwide or domestic? The court can make orders to freeze assets both in the UK and abroad. Applicants must have evidence as to which assets are situated where. 

eXceptions - every freezing order contains exceptions to ensure it is not unjustly oppressive to the respondent. For example, there are usually allowance for living, legal and business expenses. 

whY? Both applicants and respondents need to marshall their evidence as to why an order should be made, varied or discharged. 

Zzzzz - sleep is likely to be at a premium.

This article was published in New Law Journal in October 2015.

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