Freezing Injunctions & Orders

At Saunders Law, our Commercial Litigation team routinely advises clients who find themselves subject to a freezing order, as well as clients who wish to obtain an order. We can assist with every aspect of dealing with freezing orders in England and Wales, including:

• Advice on whether applying for a freezing order is appropriate
• Applying for a freezing order
• Responding to an application for a freezing order
• Advice on complying with the terms of a freezing order
• Varying and discharging freezing orders

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.

Our legal experts understand the challenges faced when a client’s 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 compliance and prepare a robust case for variation or discharge of a freezing order where appropriate.

Find out more about the firm, its teams and its typical work by taking a look at our clients.

Speak to our freezing orders solicitors in London

For expert assistance with obtaining or responding to a freezing order, contact Saunders Law today for a free, no obligation initial discussion of how we may be able to help.

Call us on 0207 632 4300 or make an enquiry online.

Why Saunders Law is the smart choice for advice on freezing orders

More than 40 years’ experience

At Saunders Law, our partner-led team of dedicated commercial litigation solicitors have over 40 years of knowledge and experience. This makes us perfectly equipped to offer straightforward, commercially sound and practical legal advice on freezing orders.

Independently recognised expertise

Our team has been independently recognised for our market-leading litigation expertise with strong rankings in highly respected client guides the Legal 500 and Chambers & Partners.

Commercially minded approach to match our clients’ priorities

We plan our approach around our clients’ circumstances and priorities. With strong skills in negotiating out-of-court settlements and exceptional experience with court litigation, our team is always guided by our clients’ commercial considerations.

Exceptional personal service & client satisfaction

We pride ourselves on providing an exceptional service. Our clients will always receive a call back the same day following an enquiry and can always speak to one of our partners when required. As a result, we consistently achieve excellent feedback from clients.

What is a freezing order/injunction?

Freezing orders, often referred to as injunctions or sometimes Mareva injunctions, is a type of court order that stops an individual from dealing with or disposing of their assets.

Freezing injunctions are powerful tools for creditors looking to protect assets for recovery to repay substantial debts.

However, just because an individual is in debt does not guarantee that the creditor will be able to obtain an injunction to freeze their assets.

What assets can be covered by a freezing order/injunction?

Many types of assets can be frozen using a freezing order, including bank and building society accounts, shares, property, land and investments.

The freezing order document may set out specific assets that are subject to the order, such as properties or shares. However, an asset not included in the order may still fall within the scope of the order. A standard form order will cover, “all the respondent’s assets… the Respondent’s assets include any asset which he has the power, directly or indirectly, to dispose or deal with as if it were his own.”

Standard form freezing orders will place a cap on the value of assets that can be frozen. Additionally, freezing orders cannot be used to force a respondent to cease trading and the court will typically allow the respondent reasonable living expenses, reasonable legal costs and the ability to deal with or dispose of assets in the ordinary and proper course of business.

Freezing orders may be made in respect of assets in England and Wales (referred to as domestic freezing orders) and worldwide (referred to as worldwide freezing orders).

How freezing orders work – how to obtain an injunction

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.

What is the process for obtaining a freezing order?

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.

How to apply for a freezing order/injunction in the UK

When applying for a freezing order/injunction, the relevant forms must be filled out fully and accurately with strong evidence to support the application.

The court will consider the applicant’s behaviour in its decision whether to grant an order or not. The applicant 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.

Where there appears to be a risk that assets may be dispersed or hidden, which would ultimately obstruct the enforcement of a possible successful claim, it is important to seek legal advice immediately regarding freezing injunctions.

Our freezing orders solicitors have the experience and specialist expertise to ensure applicants are in compliance with the application rules and meet the behaviour standards so an application has the best possible chance of success.

How to serve an injunction

Freezing orders/injunctions should be served personally upon the respondent immediately after the hearing along with the application, supporting evidence and notice of without notice hearing.

Depending on the circumstances, the injunction may be served on any third parties prior to service upon the respondent to ensure the third parties can take any necessary action to freeze assets before the respondent has a chance to move them.

Varying and discharging freezing orders/injunctions

It is essential for those named under a freezing injunction to fully understand and comply with the restrictions imposed by the order. Disobeying a freezing injunction, either intentionally or inadvertently, may amount to contempt of court and a prison sentence.

When someone named under a freezing order (the ‘respondent’) considers that the order is unjust, they can apply to the court to have the order varied or discharged. This is a complex procedure with strict deadlines.

To give the best chance of success when challenging a freezing order, it is recommended to seek expert legal advice. It may be possible that the injunction terms are unreasonably strict, that the cap on the respondent’s living expenses is too low or that the respondent needs 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 unreasonable 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.

Who can be subject to a freezing order/injunction?

Freezing orders can personally affect the party the application is made against. Freezing orders can also be notified against third parties, such as banks or trustees. A third party that receives a freezing order is obliged to take the steps necessary to prevent the respondent dealing with the assets and may be penalised or held in contempt of court.

How long does a freezing order last?

As freezing orders are often made ex parte – without notifying the respondent – they typically last around seven days, after which another hearing will be listed, giving the respondent an opportunity to respond to the order. At this hearing, the court will typically decide whether to extend the order, or to discharge it or vary it depending on the circumstances.

What happens if the respondent does not comply with the freezing order?

Failing to comply with a freezing order may amount to contempt of court and could result in the court instigating committal proceedings. The penalties includes fines, asset seizure and up to two years’ imprisonment. In narrow circumstances, breaching an injunction could even result in criminal prosecution.

How much does it cost to take out an injunction?

Costs are of course a primary concern for creditors weighing up their legal options. In cases where a freezing order is refused, applicants will usually have costs awarded against them.

In cases where the court has decided to grant interim injunctive relief, costs may be awarded against the respondent or the question of costs may be deferred to trial – it depends on the circumstances of the case.

Factors that might affect the level of costs include the urgency of the application, whether it is made with or without notice and the number of witnesses required.

At Saunders Law, we provide a range of flexible funding options for creditors requiring injunctive relief. Visit our pricing page for more information.

Speak to our freezing orders solicitors in London

For expert assistance with obtaining or responding to a freezing order, contact Saunders Law today for a free, no obligation initial discussion of how we may be able to help.