Freezing Injunctions Dispute Resolution Blake-Turner Solicitors

Freezing Injunctions

Freezing injunctions (previously known as mareva injunctions) are a form of interim measure used to freeze the assets of a defendant if there are serious concerns that they will be placed out of reach before a judgment is obtained.

Assets courts can place a freezing injunction to include: bank accounts, land, property, shares, and investments.

For example, a claimant believes a defendant is going to transfer funds abroad. In this instance they could apply for a Worldwide Freezing Injunction (WFO). In theory, these can be used anywhere in the world; however, their practical effect is limited as they may not be recognised in certain jurisdictions.

Courts grant freezing injunctions with caution as they are viewed as draconian remedies. If one is successfully overturned, the claimant may need to compensate the defendant for any disadvantage caused.

On any application for a freezing injunction, the court must consider:

  • whether it is fair, just and convenient to grant a freezing injunction
  • whether the claimant has clean hands, ie their conduct is not in question
  • whether the claimant has brought the claim in a timely manner
  • whether the claimant has a substantive cause of action against the defendant
  • whether the claimant can establish that there are assets available
  • whether there is a real risk of the assets being placed out of reach
  • how quickly the defendant could place those assets out of reach
  • the defendant’s history of behaviour

The claimant must evidence the existence of assets and the likelihood of dissipation of the assets. If a claimant merely suspects that the defendant has funds available to freeze, the court will not grant a freezing injunction

A defendant in breach of a freezing injunction would be in contempt of court and could be subjected to fines and seizure of their assets.

Before applying for a freezing injunction the Claimant must consider whether to go on notice or not, ie without notifying the Defendant. It is usual to apply without notice if there is a genuine fear that “tipping off” the Defendant will make him/her move or hide the assets. There are other ancillary orders the court may grant to support a freezing injunction such as orders against third parties in possession of property to which to defendant is still beneficially entitled or information concerning it. For example, where someone has transferred all of their assets into their marital partner’s name.

 

For further information on freezing injunctions and other interim measures, please contact Rupert Farr, on rupert.farr@blaketurner.com, or alternatively contact us here.

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