Freezing Orders

A freezing order/injunction is an interim measure granted by a court to prevent a person from being able to dispose of or deal with their assets before a judgment has been enforced.

At Saunders Law, we routinely provide advice to those who find themselves subject to a freezing order and clients who wish to obtain an order. If you need advice on any aspect of a freezing injunction, contact our expert civil litigation solicitors today for immediate assistance.

Freezing Orders/Injunctions in England and Wales

Freezing orders are wide-reaching, with the power to restrain all types of assets, including bank accounts, shares, homes, land and cars. Orders can be obtained in respect of assets within England and Wales, as well as assets situated outside this jurisdiction (under a worldwide freezing order).

Significantly, a freezing order affects not only the respondent but any third parties that hold assets belonging to the respondent. Third parties must not breach the terms of the order, or help or permit the respondent to do so.

When will the court grant a freezing order/injunction?

The court has discretion to grant a freezing order/injunction under section 37 of the Senior Courts Act 1981, and will do so only when it considers that it is just and convenient. The following conditions, established through case law, must be met:

  • The applicant has sufficient cause of action.
  • The applicant’s case is good and arguable (although, there is no requirement to establish that the case will definitely succeed).
  • There are sufficient assets in existence to meet the claim.
  • There is a real risk of the disposal or dissipation of assets prior to the court’s judgment.
  • The applicant has made a full and frank disclosure to the court.

When making its decision, the court will also apply the ‘balance of convenience’ test, which means it will take all relevant factors into account and evaluate the likely disadvantage caused to the respondent against the benefit the injunction would provide to the applicant.

The process

Applications are made to the High Court or the County Court. If an order is granted without notifying the respondent first, which is often the case, it will be valid for a specific period of time and a full hearing will be scheduled. The applicant will usually be required to provide an undertaking in damages. This means the applicant undertakes to compensate the respondent if the court later finds there was no legitimate reason for the freezing order.

The respondent will usually have 48 hours to respond to the order with a full disclosure of all their assets, their value and location (supported by documentation). In some cases, they may be required to sign a document to permit third parties to disclose details about the assets they hold for the respondent. In serious cases, the respondent could be ordered to hand in their passport to prevent them from leaving the UK, and a receiver may be appointed to monitor their assets. The respondent will usually be permitted to pay for their ordinary living expenses and reasonable legal fees, and in the case of a business, to pay staff and creditors.

At the full hearing, the respondent will have the opportunity to request that the order be varied or discharged, and the court will determine whether either should happen, or if the order should be continued. 

Obtaining a Freezing Order/Injunction in the UK

When applying for a freezing order/injunction, you must ensure the correct forms are filled out and strong evidence is provided to support your application.

The court will consider the applicant’s behaviour in its decision whether to grant an order or not. You must act reasonably, diligently and without unnecessary delay. The court has previously considered delay to contradict the urgent risk of dissipation of the assets in question. Practically, delay also increases the risk that assets will already have been dissipated by the time any injunction is granted. It is also essential that the applicant has clean hands; they must not have acted improperly.

If you believe there to be a risk that assets may be dispersed or hidden, which would ultimately obstruct the enforcement of a possible successful claim, you should not hesitate to seek legal advice regarding freezing injunctions. We will ensure you are in compliance with the application rules and that you meet the behaviour standards so that your application has the best possible chance of success.

Varying and discharging freezing orders/injunctions

If you are a respondent under a freezing injunction, in the first instance it is important that you fully understand and comply with the restrictions imposed on you by the order. Disobeying a freezing injunction, either intentionally or inadvertently, may amount to contempt of court and a prison sentence.

If you believe the freezing order is unjust, you can apply to the court to have the order varied or discharged. This is a complex procedure with strict deadlines. For your best chance of success, it is recommended that you seek expert legal advice. It may be possible that the injunction terms are unreasonably strict, or that the cap on your living expenses is too low, or that you need more time to provide evidence of assets.

Some common bases for challenging injunctions are:

  • English courts lack jurisdiction to make the order.
  • No good arguable case against the respondent exists.
  • The order is too oppressive.
  • There is no risk of dissipation of the respondent's assets.
  • There has been unreasonble delay by the applicant.
  • The applicant should have given notice to the respondent.
  • The applicant has not met the duties of full and frank disclosure.

Our legal experts understand the challenges faced when your finances, work and everyday life are restricted by a freezing order/injunction. We strive to remove or reduce the impact these orders have on our clients, their businesses and their families. It is important to act with urgency and discretion in these cases. Our professional, practiced lawyers will provide clear, practical advice, act without delay to ensure your compliance and prepare a robust case for variation or discharge of the order. 

Contact our Expert Civil Litigation Lawyers in London 

For a free, no-obligation, initial discussion of how we may be able to assist you, contact our expert lawyers on 02076324300 or make an enquiry online.

 

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