Welcome to our free industry leading guide on Freezing Orders. Whether you have been served with a freezing order or looking to get one from the court - we have the team to help. Successfully helping clients since 2002, we have dealt with a huge range of freezing order situations. Let our experienced team help you too. Call us free and in confidence today.
Our Experience with Freezing Orders
Francis Wilks & Jones solicitors have been advising Claimants, Defendants and other related parties on freezing order claims since 2002.
How we can help
Over that time we have successfully helped individuals, companies, business owners, financiers, directors, partnerships, investors, liquidators and other office holders on a wide range of freezing order issues. Our clients are based both in England and abroad.
This comprehensive guide will help take you through some of the key issues relating to the complex area of freezing injunctions – both in terms of practical advice dealing with these claims for the last 20 years, together with some of the legal issues which also need to be addressed.
Call us today – free initial call
Our team is here to help, whatever the nature of your freezing order enquiry. For immediate assistance, call Partners Maria Koureas-Jones or Andrew Carter and they can speak to you today. Alternatively send us a message and we will get straight back to you.
One of the most astute appointments I have ever made.A company director
What is a Freezing Order?
A freezing order is a type of Court order also known as an interim injunction. It is a very serious type of Court order and it is specifically designed to stop the subject of the Court order (often called “the Defendant” or “the Respondent”) from removing their property, money or other assets beyond the reach of the person or company applying for the order.
Courts in England & Wales do not grant freezing orders lightly. The reason for this is that Judges do not want to interfere with an individual or company’s ability to deal with its own assets. However, in certain circumstances, it is possible to obtain a freezing order or freezing injunction if the Applicant believes
- there is a real risk that the Defendant will remove its assets beyond its reach (referred to as “a real risk of dissipation”),
- the assets are currently within the jurisdiction of the UK Courts,
- that the Claimant has a good arguable case against the Respondent, and
- all things considered, the Court believes it is just and right to grant the order.
Freezing injunctions are most commonly sought by an Applicant when it believes it is the victim of some kind of fraud. When this happens, an Applicant often goes to Court without any notice to the Defendant and applies for a freezing order against the Defendant. It then serves the Defendant with the freezing order and the Defendant is then “on notice” that it should not try and remove its assets beyond the reach of the Claimant until the underlying claim is either settled or resolved at Court.
It is important for any Applicant to understand that a Defendant may still try and remove assets beyond the reach of the Applicant despite being served with a freezing order. However, to do so is extremely unwise as breaching the terms of a freezing order is a “contempt of Court” and can lead to the imprisonment of a Defendant who knowingly breaches the terms of the order. Because of this threat of imprisonment, the freezing order remedy is a powerful one and it is rare for a Defendant to ignore or breach the terms of the Court order.
How we can help
At Francis Wilks & Jones, we have a specialist team of freezing order solicitors. These types of orders are complex and do require specialist legal help.
We have a long track record advising clients on all aspects of freezing orders including
- Applying for a Freezing Order
- Freezing Order Defence
- Varying the terms of a Freezing Order
- Freezing Order costs
- Applying to remove a freezing order
- How to deal with business and living expenses
- Practical assistance if you have been served with a Freezing Order
- Advising any third parties who might be caught up in the Freezing Order process
Our team helps individuals or companies applying or freezing orders and also have a long and successful track record of acting for Defendants who have been served with a freezing order. It is this combined experience that allows us to provide expert freezing order advice to anyone involved with these types of serious Court orders.
Do contact us for help today and one of our expert freezing order team would be more than happy to speak to you.
How to remove a freezing order
It is possible for a Respondent or Defendant to challenge a freezing injunction and get it dismissed completely. This is known as having the freezing order “discharged” or dismissed.
Our experts have been helping Respondents get freezing orders dismissed since 2002. We can help you too.
The process for removing or dismissing a freezing order
Once a freezing order is granted by the Court, the process to remove a freezing order involves the making a formal application to the Court. This will involve the following key steps:
- drafting an application notice – this is a Court form setting out the nature of the order you are seeking from the Judge;
- the application notice will then be issued at Court and a date will be given by the Court at which the application for dismissing the freezing order will be heard. It is important when considering the dismissal application to ensure that the time estimate is appropriate, as this will ensure that the Respondent obtains sufficient time at Court to have the application heard. Bearing in mind it is likely that the Applicant, when served with an application to discharge the freezing order, may itself serve evidence in response. Therefore, sufficient time must be set aside by the Court to hear both sides to the application. Otherwise, the Court may be unwilling to deal with the application in too short a time frame and postpone the hearing for another date, which could be weeks away (with the freezing order continuing in the meantime).
- drafting a detailed freezing order affidavit (witness statement evidence) setting out specifically the grounds upon which the Respondent seeks to rely on in terms of the proposed discharge of the freezing order;
- the application and evidence (including documents referred to in the affidavit) will then need to be served on the Applicant or its lawyers. This will almost always lead to further correspondence being exchanged between lawyers. This will include service on you/your solicitors of their evidence in answer to your freezing injunction or freezing order application;
- as part of the application to discharge a freezing order, the services of a barrister will be required to represent the Respondent at the freezing order dismissal hearing and advise prior to the hearing on strategic matters and additionally any new issues raised by the other side’s evidence in answer. The lawyers acting for the Respondent need to draft a detailed set of instructions to the barrister outlining all matters and enclosing all documents to bring counsel up to speed to assist him/her in their preparations;
- The barrister will prepare what is called a skeleton argument which will need to be filed at Court, commonly the day before the hearing. A skeleton argument is a document setting out both the key factual and legal aspects of the application and it is provided for the benefit of the judge hearing the Application to quickly get up to speed with the documentation which has been served. It is vitally important that the skeleton argument is prepared properly, as a well prepared skeleton argument will ensure that of a judge being brought fully up to speed prior to the application being heard.
- All sides to the application with then go to Court and the Judge will hear the evidence and legal argument from both sides and then reach a decision as to whether the freezing order remains in place or is dismissed.
Common reasons to have a freezing order dismissed
There are various reasons why a freezing order can be discharged, including
- a failure by the Applicant to act quickly enough to have the freezing order granted in the first place. This can be decided by the Court at the initial hearing for the freezing order and as such, if it is being applied for on a “without notice” basis – the Court simply will not make the order in the first place if there has been “unreasonable delay”.
- a failure by the Applicant to comply with what is known as “full and frank disclosure” i.e. putting all relevant facts before the Court at the time the order was granted or has misrepresented the facts at the initial “without notice” hearing when the Respondent was not present;
- failure by the Applicant to show a “good arguable case”.
- Information later comes out which undermines the basis upon which the freezing order was originally granted.
- the Applicant fails to demonstrate that there is a real risk that the Defendant’s assets will be “dissipated” – i.e. put out of reach of the Applicant if the freezing order is not granted.
- Showing that the English Courts lack jurisdiction to make the freezing order
- Showing that the freezing order would be too “oppressive” on the Respondent
- The freezing order application should in fact have been made with notice to the Respondent.
Therefore, there are a number of areas by which any party having received a freezing order can make an application to dismiss the freezing order and have it removed.
Timing of an application to remove a freezing order
An application to remove the freezing order can be made either
1. At the “return date” hearing
The freezing injunction return date is a date set by the Court at the original application when it granted the “without notice” freezing order. It is normally 7-14 days after the original order was granted.
The purpose of the return date is that it gives the Respondent to set its position out to the Court for the first time. This can include an application by the responding party to discharge the freezing injunction or freezing order.
2. After the return date
Alternatively, even after the freezing injunction return date hearing, the Respondent can at any time make an application to discharge the freezing order if something comes to light which means that an application can be made For example, the Applicant didn’t put all the key evidence before the Court at the original hearing.
Speed is important in making the freezing order removal application
Once you have decided there are grounds to have the freezing order dismissed, it is important to start work on the freezing order application quickly. Any unreasonable delay in making the application can count against you and might mean that the freezing injunction stays in place.
The application will also take time to put together – so again, getting gup to speed quickly is important.
How we can help
If you are on the receiving end of a freezing order, we can help advise you how best to have the order removed – and help make that application for you. Equally, if you are an Applicant facing this type of dismissal application – we have the team to help defend it.
How to vary the terms of a freezing order
It is possible for a Respondent / Defendant to ask the Court to vary or amend the terms of the original freezing order. Our legal team has been helping clients do this since 2002. We can help you too.
Even if there are no grounds to have a freezing order removed completely, there may be legitimate reasons to vary or alter the terms of the freezing order as originally granted by the Court.
Often a freezing injunction is granted to an Applicant without any notice or reference to the Defendant pursuant to Practice Direction 25A in interim injunctions. Therefore, the terms of the freezing order tend to favour of the Applicant – although the Judge at the original without notice hearing will look at each term carefully before signing off the order to be served.
Having said that, some terms can be too onerous or irrelevant once the Court is made aware of the Respondent’s position in the claim.
Procedure for varying the terms of a freezing order
A variation can either
- Be agreed by consent between the parties to the litigation or, alternatively
- by making an application to Court – which normally happens at the Return Date Hearing – usually 7-14 days after the original freezing order is granted. This route is normally followed if the Applicant’s solicitors refuse to agree the variation by consent to the freezing order.
Common reasons to seek a variation of a freezing injunction
Common grounds for seeking the variation of the terms of a freezing order include the following:
1. The order is oppressive and the Respondent is unable to pay living, legal or business expenses.
A Respondent to a freezing injunction is always entitled to have sufficient money to pay reasonable living costs and legal or business expenses. It is common for a Respondent to seek an increase in the allowance given in the order for either living expenses or legal costs.
A amount of £500 a week is usually provided for in the terms of a freezing order in respect of living expenses. However, the Respondent will need to assess whether this amount is appropriate for his/her reasonable living expenses and whether or not an increase should be sought.
- in order to seek a variation of the living allowances figure in the freezing injunction, it will be necessary to show what the Respondent’s normal expenditure is, by reference to bank statements and / or facility / loan documents etc.
- of course, there may be a number of reasons why a Respondent would not want an Applicant having access to such information;
- however, it is not uncommon for the Respondent to have to provide full details of his/her financial position in accordance with the provision of information sections contained within the usual freezing order itself.
Furthermore, if the freezing order does not support a proprietary claim to the frozen assets (i.e. specifically targeting certain assets), then the Court will normally allow a Respondent to use his / her assets for ordinary living expenses together with reasonable, legal and business expenses.
However, if the Applicant claims a proprietary right to the frozen assets (i.e. the Applicant claims the rights to a specific asset such as a house purchased with allegedly stolen money), the Court is unlikely to vary the terms of the freezing order unless the Respondent can show three things
- there are no other assets available at all;
- s/he has a good defence to the claim / or a reasonable prospect of success; or
- s/he is entitled to the funds in question.
It is always sensible to consider all issues relating to an application to vary the term of a freezing order at an early stage. The Courts generally do not like it if a Respondent returns to Court more than once to seek to vary the terms of a freezing order.
2. Where the maximum sum claimed by the Applicant is excessive
In most freezing injunctions, a Respondent’s assets are frozen up to a certain specified limit.
This limit normally equals the level of losses the Applicant says it has suffered as a result of the Respondent’s actions.
However, it is open to a Respondent to apply to reduce the maximum sum limit if it can be shown that the Applicant has not given a realistic value of the claim, for example by not taking into account any counterclaims that might be available to a Respondent.
Variation of any “ancillary” or additional orders
When granting a freezing injunction, the Court will normally make additional orders if asked to by the Applicant – these are commonly known as “ancillary orders”.
Such orders often relate to disclosure of documents and / or provision of information about assets, details of which must be provided to the Applicant sworn as true and correct in the form of an Affidavit.
- often the deadlines in the Court order are very hard to comply with due to the volume of documentation to be disclosed or the fact that it may relate to information held in different jurisdictions or locations;
- or documents might be in the possession, custody or control of third parties and may take some time to recover.
In such circumstances, a Respondent needs to explain why a particular deadline cannot be met and provide an alternate deadline within a reasonable time. Ideally, if it is open to a Respondent to do so, he should provide partial disclosure of documentation whilst making every effort to comply with the full disclosure obligations imposed by the freezing order by any agreed extended deadline.
A Respondent may also wish to vary the terms of the order on the basis that disclosure of documents or information will not be given on the grounds of privilege against self-incrimination.
Other common terms which Respondents try and change include:
- varying the terms of a passport order;
- requiring the Respondents to deliver up his passport and to not leave jurisdiction;
- the appointment of a Receiver which could cause damage to his existing business.
How we can help
We regularly advise clients on the terms of a freezing order and assist Respondents in making applications to vary the terms of an order if there are valid reasons to do so. We will always attempt to do this by consent with the Applicant’s solicitors as it is cheaper to do it this way. But if that is not possible, we have the expert team able to make the appropriate variation application for you.
Freezing Orders – 6 important considerations before applying
If you are thinking about applying for a freezing injunction, it is vital to properly understand the implications of this legal remedy and the short and long term consequences of making such an application. Once you start this process, it is not easy to back out. And if you get the application wrong or fail to follow the very strict Court rules in interim injunctions under Practice Direction 25A relating to freezing orders, you could even end up with a legal costs order against you.
Our team have been advising individuals, companies and financiers about Freezing Orders since 2002. Contact us today and we can help you too.
Freezing Orders – an overview
A freezing order is a legal remedy that the Court may order in support of a claim brought by an individual, company or other legal entity (often referred to as the “Applicant”). A Freezing order is a type of interim injunction and the rules and procedures are set out in the Ministry of Justice Practice Direction 25A.
For the Court to grant a freezing order it will need to be satisfied that
- the Applicant has a substantive good arguable claim against the Respondent;
- that there is a solid risk that unless a freezing order is granted the Respondent may not have assets available to pay any judgment that the Applicant may obtain; and
- it is just and convenient to grant the freezing order.
A freezing order does not give the Applicant any security over the assets that are frozen. It merely prevents the Respondent from dealing with those assets (eg selling, transferring ownership or charging them) until the underlying legal claim is settled or resolved at a full trial.
Before applying for a freezing order, any Applicant must be aware of the nature of the order they are seeking from the Court and the obligation it is under when making such an application.
- whilst some of these considerations relate to legal aspects, any Applicant must always bear in mind the practical considerations of applying for a freezing order before deciding to commence that course of action;
- often, when faced with a possible fraud or other serious wrongdoing, Applicants are very keen to head off to Court and seek a freezing order against a Respondent but in so doing they must be aware that this is only the first part of what can be a very lengthy, time consuming and expensive process.
Proper consideration of this prior to making such an application, together with consideration of other potential remedies, is essential before embarking on what could be a very lengthy set of legal proceedings.
Freezing injunctions are a powerful legal weapon in the right hands. Careful thought and due consideration should be taken prior to taking any steps to obtain such an order. Whilst difficult to do in what are often very serious circumstances an Applicant might find itself in, it is always worth taking some time to step back and consider all the options before reaching a decision.
The practical considerations to think about before applying for a Freezing Order
1. The time, expense and commitment involved with Freezing Orders
Freezing orders are one of the most serious types of order which a Court can grant. As a result, the Court does not grant them lightly and as set out above, a freezing order is only the first step in what can be a lengthy litigation process.
- Freezing injunctions are time consuming. They require significant investment of management time and involvement of senior individuals before an application can be issued. Applicants will be deeply involved with their legal advisors in the preparation of the evidence required to obtain a freezing order. This can often involve working over some days and nights (and sometimes weeks) to produce the affidavit evidence required in support of the freezing order.
- If the Applicant is a company, senior personnel will be required to access company documentation and help prepare the evidence to substantiate allegations made, commonly involving analysis of money flows and other financial information to help evidence the alleged wrong doing by the Respondent. This may require the assistance of the finance team of a company, the bookkeeper or the company accountant. This will obviously have an impact on the day to day running of the business at a time when it has already suffered from the Respondent’s wrongdoing.
- Where the Court grants a without notice freezing injunction under part 4 of Practice Direction 25A, the Applicant will normally be required to go back to Court 7 to 14 days later for what is known as the “Return Date”. Often that hearing is fairly brief but if the Respondent wishes to challenge the continuation of the freezing order and get it dismissed, the Court will usually set a timetable for the service of evidence and relist the hearing. And this can then lead on to a lengthy hearing at which further evidence will need to be drafted and a barrister required to attend Court on your behalf.
- The standard terms of a freezing injunction or freezing order are that it will not prevent the Respondent from making payments in the ordinary course of business or spending money on legal advice and representation. Additionally, if the Respondent is an individual, it will state that the freezing order will not restrict the Respondent from spending a specified amount per week or month on ordinary living expenses. The principle is that the Respondent ought not to be restricted from making his or her usual payments in accordance with their standard of living. Usually at the without notice freezing injunction hearing the Applicant will estimate what the Respondent’s expenditure may be and will seek a restriction that the Respondent does not spend more. You can read more about living costs and business costs in other parts of this Guide.
Typically in the days between the granting of the freezing injunction and the Return Date hearing, the Respondent may take issue with the practical effect of the freezing order on payments in the ordinary course of business and (where the Respondent is an individual) on the amount of permitted living expenses. Practically, the freezing injunction Return Date hearing will often be concerned with resolving such matters, if disputed.
2. Paying the costs of any third parties
Applicants must also be aware that they are responsible for the costs reasonably incurred by third parties, such as banks and other financial institutions, in complying with the terms of the freezing injunction.
3. Work out what benefit will you actually gain from a freezing order
Careful thought needs to be given to the benefits which will actually arise as a result of obtaining a freezing injunction or freezing order.
Often, Applicants who are the subject of an apparent fraud ask their legal advisers to “throw the kitchen sink” at the wrongdoers without thinking of the longer-term implications, both in terms of costs and the benefit of taking that course of action. Careful through should be given to any alternative remedies available to Applicants before deciding that a freezing order is the right way to go.
4. Will the freezing order actually stop a person hiding or removing their assets?
Some Respondents served with a freezing order may just ignore it or deliberately act in contravention of the Court order. Whilst this can lead to their imprisonment for contempt of Court, the primary purpose of getting a freezing order is to preserve assets and stop them disappearing. It is therefore worth considering whether it is likely the freezing injunction will have the desired effect in respect of the wrongdoers concerned.
It is often the case the Applicant is simply unaware of what assets the Respondent or Defendant has and whether the reality is that the Defendant may simply carry on and deal with those assets regardless of obtaining a freezing injunction or freezing order.
5. Policing the freezing order
The Applicant must be willing to pursue and enforce the freezing order once it is granted by the Court. This might also require further Court applications dealing with disclosure of document, cross-examination of the Defendants, the possible appointment of a receiver, delivery-up orders, search orders and/or proceedings for contempt of Court.
Whilst these are all legal remedies available to an Applicant, they can incur further legal costs and this is something which an Applicant needs to think carefully about at the outset before applying for a freezing order. It is not the case that an Applicant can simply “sit” on a freezing injunction once granted. Ongoing work needs to be carried out in respect of compliance and enforcement of the freezing injunction / freezing order for it to have the maximum effect.
6. Applications by the Respondent to vary or discharge the freezing order
Applicants need to be aware of the fact that Respondents may seek to dismiss the freezing order or alter the terms of a freezing injunction once they have had time to “take stock” and prepare for the first freezing injunction return date hearing. These applications, if fully contested, can become very costly and can in some instances can run for many days.
Our expert team at Francis Wilks & Jones are here to help you with your freezing order enquiry. Our years’ of knowledge can help you with all aspects of freezing injunctions. Contact one of our friendly solicitors now for your confidential consultation.
What is the purpose of freezing someone’s assets?
Freezing Orders are applied for at Court to try and preserve assets and stop the Defendant or Respondent putting them beyond the reach of the Applicant. It is essentially a way of stopping a wrongdoer from making themselves “Judgment proof” – i.e. removing their assets and property beyond the reach of the Applicant – so that if the Applicant obtains a Judgment at Court, there are no assets to enforce the Judgment against.
The types of assets covered by a freezing order can be wide ranging – covering cash, shares, property, land and other investments.
If there is a real risk when it is suspected that the Defendant has done something wrong or acted in a fraudulent or dishonest manner that assets might be removed eg abroad,
- the freezing injunction helps protect those assets (and stop them being removed from the jurisdiction) whilst the overall claim / dispute between the parties is deal with at Court as part of the normal litigation process;
- the freezing order is put in place to try and make sure that if the claimant later obtains a judgment against the Defendant, there are assets of the Defendant left in reach – over that the judgment can be enforced;
- technically, a freezing injunction or freezing order does not “freeze” the assets and a Respondent can still deal with them if he/she decides to. It does not provide a form of security to the Applicant over any assets. But if the Respondent does act in breach of the freezing order, then whilst he/she may remove the assets from the jurisdiction that person can then be sent to prison for contempt of Court – ie breaching the terms of the order.
It is therefore a very serious type of order and it takes a very rash (or badly advised) Respondent to ignore the terms of the order and remove assets from the jurisdiction.
Freezing orders are complicated legal documents. We highly recommended that you seek legal advice if you have any freezing order related questions. Our friendly team of experts at Francis Wilks & Jones is the county’s leading set of freezing order solicitors and here to help, whatever our situation.
Freezing Injunctions – the Court “Return Date” explained
The “return date” is the first Court hearing which takes place after a without notice freezing order has been granted. It is vitally important – it is often the first chance a Respondent / Defendant will have to present their position to the Court – and perhaps try and have the freezing order dismissed or the terms of the freezing order altered.
Whichever side you are on – we have huge experience of return date hearings and freezing orders generally.
Without notice / ex parte Freezing Orders
These are dealt with under part 4.1 of Practice Direction 25A. Often, because the allegations are so serious and acting quickly is so important, an Applicant will apply to Court for a freezing order “without any notice” to the alleged wrongdoer. The reason why is that if the alleged wrongdoer was given notice of the impending application, they might try and remove their assets beyond the reach of the Applicant before the order was made. These are known as “ex parte” or “without notice” freezing orders.
If a freezing order has been obtained without notice to the Respondent, the Court will always order that a further hearing take place between the parties very shortly after the order is made – this is what is known as the “Return Date” – ie when both sides to the dispute return to court for the next hearing. This is only fair as it allows the Respondent to consider the papers served on it and decide what it wants to do. A Respondent is allowed to put its case across to the Court and the Return Date is the first opportunity for it to indicate what it will do.
Timing of the Return Date Hearing
Normally, the Return Date is set 7 – 14 days from the granting of a freezing injunction by the Court and provides an opportunity for the Respondent to appear at Court once they have been served with the various Court documentation.
- it is open to the parties to the claim to seek an adjournment (delay / date extension) of the Return Date by consent, particularly when a Respondent needs to prepare witness evidence in response to the allegations set out in the Freezing Order and the Applicants evidence. Often the Applicant’s evidence can be very detailed, and a Respondent served with the Court papers may require more time to review it.
- An extension of time to the Return Date is particularly useful if the Respondent is thinking of challenging the freezing order – to have the freezing order dismissed or alternatively to try and alter the terms of the freezing order.
- however, the Respondent should be aware that the freezing order will continue to apply until it has been discharged / dismissed by the Court or other order is made.
What happens at the return date hearing?
At the full hearing, a Respondent can do one of three things
- seek to have the freezing order dismissed completely;
- seek to alter the terms of the freezing order;
- agree to the continuation of the freezing order / freezing injunction until trial or earlier order in the underlying substantive proceedings.
How we can help
We are experts at dealing with freezing orders and have a team of lawyers who can help at very short notice. This is particularly important if you are a Respondent / Defendant who has been served with a freezing order and don’t know what to do in the short period between service of the freezing order and the Return Date hearing. Our brilliant team can advise you on your options and then prepare for the hearing to maximise your prospects of success.
Documents required to obtain a freezing injunction
If you want to obtain a freezing injunction, the rules are set out in Practice Direction 25A dealing with interim injunctions. it is vital to make sure your witness evidence is properly drafted and all the documents you intend to rely upon are set out clearly to the Court. Our excellent Guide on “what the court requires to grant a freezing injunction” helps simplify some of these complex rules. Failure to prepare properly so can have serious consequences and you might not get the order you want. It is important to remember that Freezing orders are serious types of Court order. A Court will not grant an order unless it is absolutely satisfied that it is appropriate. Our brilliant team can help you maximise your chances of success.
Documents required to get a freezing order at Court
There are a number of documents which will need to be completed prior to attending Court to ask the Judge to grant a freezing order. These rules are governed by Part 25 of the Civil Procedure Rules and Practice Direction 25A which deals with interim injunctions.
These key steps are as follows
- an application notice. This is a document which will be prepared by the Applicant’s legal advisers and in accordance with paragraph 2.1 of Practice Direction 25A it must set out
- the name and address of the Applicant and Respondent,
- the date time and place of the hearing
- the nature of the application sought by the Applicant; and
- a draft of the freezing order. This is a very important document as it sets out the terms of the actual freezing order sought by the Applicant from the Court. Whilst there is a standard form of wording for a freezing order, they are often amended to suit the particular circumstances of each application. It is vital to make sure that your freezing order reflects what it is you need from the Court – including any other additional orders such as disclosure of certain documentation by a Defendant. The draft must also be available in electronic format for the Court. Often, the draft freezing order will be drafted by the Applicant’s legal advisors in conjunction with the barrister instructed by the Applicant to attend Court and seek the order.
- detailed affidavits (a type of witness statement) in support of the application in accordance with paragraph 3 of Practice Direction 25A which deals with evidence.
- affidavits are crucial documents setting out the factual background to the application and why it is being made. These often have to be prepared at very short notice and are something our brilliant legal team can help with.
- the affidavits will also attach and refer to all the key documents in support of the application (paragraph 3.3 of Practice Direction 25A).
- where no notice of the application is given to the Respondent, the affidavit must also set out the reasons why this is (paragraph 3.4 of Practice Direction 25A)
- draft claim form and particulars of claim – these will need to issued at the same time the freezing injunction is obtained at Court. It is important to remember that a freezing order cannot stand alone or in isolation. It is there to ensure that the Defendant does not try and hide its assets whilst the underlying dispute between the different parties is dealt with. Therefore, when applying for a freezing order, the Court will expect to see the formal Claim Form and details of the underlying dispute – which will then need to be issued as a legal claim in its own right. Solicitors acting for the Applicant will be required to give an undertaking to issue the Claim Form after the granting of the Freezing Order (paragraph 4.4 of Practice Direction 25A)
Our expert team help draft these documents, often in conjunction with the barrister instructed on the freezing order application.
Additional Court orders applied for at the same time as the freezing order
In addition to the freezing injunction itself, Applicants often apply for additional orders from the Court (often called “ancillary orders”). These are additional orders which, if granted, will also be binding on the Respondent. They often exist to ensure the freezing order can be effective.
Whilst these are often varied, they can include the following
- an order for cross-examination of the Respondent about the nature, location and / or value of his/her assets;
- an order that the Respondent delivers up his passport (paragraph 8 of Practice Direction 25A);
- an order that a Receiver be appointed over the Respondent’s company;
- an order for immediate delivery up of assets or a payment into Court (paragraph 8 of Practice Direction 25A);
- an order that the Respondent’s bank and / or any other financial institution be authorised to disclose information to the Applicant;
- an order for a Search order (paragraph 7 of Practice Direction 25A);
- an order requiring the disclosure of the identity of the third party funder;
- an order that any party who is holding assets / documents on behalf of the Respondent be prevented from dealing with and / or disposing of the same.
It is vital when making an application for a freezing order that careful thought is given to what further orders an Applicant may wish the Court to make in order to fully protect its position. Failure to do so can result in the Applicant not putting itself in the strongest position possible at the outset of the proceedings and it is a waste of time and legal costs if the freezing order / freezing injunction is obtained but is ineffective.
It is vital that specialist legal advice is taken as to the nature and extent of any ancillary orders which may be sought. It is often a combination of the standard form of freezing order and the appropriate ancillary orders which make it such a powerful litigation weapon at the disposal of an Applicant.
How we can help
Obtaining a freezing order is not straightforward. Our team can quickly take you through the process, make sure you understand all your options, and work at speed to maximise your chances of getting a freezing order at Court. Time is very much of the essence – working quickly and with expertise is needed when applying for a freezing order. Our team is renowned for its ability to work under pressure to get the exact order you need to protect your position.
Freezing Injunctions – 11 crucial issues to cover in the witness evidence
Any application made for a freezing order must be supported by written evidence in the form of an affidavit (a type of witness statement) in accordance with paragraph 3 of Practice Direction 25A.
An affidavit is a written statement made by a party which is sworn by the relevant individual on oath as being true and correct to the best of that person’s knowledge and belief. If the Affidavit is later shown to be incorrect or the individual trying to deceive the Court and /or was reckless as to the information given then it is possible that the relevant individual swearing the affidavit may be held to be in contempt of Court. This could result in imprisonment or a fine. And almost certainly lead to paying a large legal costs order to the Respondent / Defendant
It is therefore essential that the affidavit is drafted carefully and in sufficient detail to support the application for a freezing injunction. If it is not, then the application is highly likely to fail.
Our brilliant team has been obtaining freezing orders for clients since 2002. We have an excellent record of success. Call us today and we can help you too.
What a freezing order affidavit should deal with
- The reasons for urgency. The Court will need to be convinced that the matter is urgent and why, if the application is being made without any notice to the Respondent, this is necessary. This requirement is in accordance with paragraph 3.4 of Practice Direction 25A;
- The Respondent’s assets and property. The Court will also require some information regarding the Respondent’s assets, including evidence as to their nature and current location;
- Evidence of the potential risk of dissipation. This is the risk that the Respondent might try and hide its assets in the event that the freezing injunction is not granted by the Court;
- A good arguable case. The Applicant will also have to show there is a “good arguable case” in the underlying litigation claim against the Respondent. Ideally, the Applicant will need to exhibit a draft claim form relating to the underlying claim (if not yet issued) so that the Court can see that there is a claim to be litigated out against the Respondent. The Court may require the Applicant to provide an undertaking that the claim form will be issued and served as soon as practicable possible;
- Details of any defences available to the Respondent. If relevant, the affidavit will have to outline (with as much detail as possible) any possible defences which the Respondent may have including those of set-off, counterclaim or possible privilege against self- incrimination (which reflects the Applicant’s duty of full and frank disclosure – see below);
- Possible insolvency of the Respondent. If the Respondent is likely to go into some form of insolvency in the near future, this needs to be drawn to the Court’s attention. If it is clear that insolvency is likely, the Court may refuse to grant an injunction on the basis that it will provide no added protection to the Applicant;
- Prejudice or hardship to the Applicant. The affidavit will need to cover the issue of any likely prejudice or hardship which the Applicant may suffer if the freezing order is not granted;
- Criminal convictions. If the Applicant is subject to any criminal charge or conviction, this needs to be disclosed in the affidavit;
- Financial standing of the Applicant. In order to deal with the issue of undertaking in damages, the Applicant will need to provide detailed evidence of its financial standing, often by exhibiting its latest audited / management accounts (and possibly also by providing copies of bank statements), particularly in light of the Applicant’s obligation to provide an undertaking in damages should the application be unsuccessful. A cross undertaking in damages is something which provides protection to a Defendant where it is later shown that the freezing order should not have been granted and the Defendant needs to be compensated for any financial damage it suffered from as a result;
- Foreign law considerations. If the freezing order is sought on a worldwide basis, it might be that issues of foreign law in different jurisdictions also needs to be covered. The Applicant may also need to consider the issue of seeking leave to serve the proceedings outside the jurisdiction of the Court (i.e. outside England and Wales); and
- Full and frank disclosure. In addition to the above, every Applicant in these types of proceedings is under a duty to provide full and frank disclosure, meaning that it must disclose all relevant material to the Court, either factual or legal and whether in favour of the Applicant’s claim or not, which may have a bearing on the Court’s decision to grant the order. Failure to do this can lead to the freezing order being dismissed from Court at a later date – often with an order that the Applicant pays all of the Defendants legal costs. It is vital to comply with the rules relating to full and frank disclosure.
How we can help
Our expert team are very experienced in producing high quality witness evidence under tight time constraints. Getting the evidence right is central to obtaining a Freezing Order. Contact us today for help.
Freezing injunctions and cross undertaking in damages explained
The Court will always require what is called a “cross undertaking in damages” from an Applicant before granting a freezing order. An undertaking to the Court is a very serious thing – and vital for anyone considering applying for a freezing injunction to fully understand.
People applying for freezing injunctions must pay heed to the requirement to give an undertaking in damages to the Court at the outset of proceedings. This is the default position as set out in JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev  EWCA Civ 139,  1 WLR 160. There is a possible exception to this position where the Applicant has no personal interest in the litigation and is bringing the action on behalf of others however, the burden is on the Applicant to show why it should not be required.
The reasons the Court requires a cross undertaking is that if it is later shown that the freezing order should not have been granted, it allows a Respondent / Defendant to be compensated for any financial loss it suffers as a result of the freezing order being wrongly granted.
What does this mean in practice?
Depending on the financial standing of the Applicant, the Court may
- order that money actually be deposited in Court and held in a protected account until the claim is resolved at trial. The Court will make it a condition of the freezing injunction that the Applicant has to actually pay monies into a Court bank account which will be held there until trial or earlier order in the main proceedings. This amount could easily be in the region of £50,000 (or much higher dependent on the value of the claim) and before commencing an application the Applicant should consider whether payment of such a sum is possible and the affect it might have.
- alternatively, the Court can rely upon a written undertaking from an Applicant to pay damages. This will normally be the case when the Applicant is of significant financial standing, such as a bank or other financial institution.
What happens if the Applicant later loses its claim?
If an Applicant ultimately loses the underlying legal claim or a Defendant successfully argues that the freezing injunction should be dismissed, the Applicant could face a very significant claim in damages against it, either in terms of
- the legal costs of the main proceedings;
- the legal costs of the injunction application; and
- the undertaking in damages arising from the injunction, both to the Respondent and third parties (subject to any limitation as described above).
In any subsequent “enquiry as to damages” (i.e. the level of any financial compensation), the Defendant must prove that the losses it alleges would not have occurred but for the freezing injunction, but not that the injunction was a sole cause of the loss.
How to fund the cross undertaking?
If an Applicant does not have sufficient funds to provide a cross undertaking this may prevent them from applying for a freezing order.
However, there are options available to Applicants to assist them with this aspect such as obtaining insurance or litigation funding prior to issuing an application. We are aware that The Judge and Harbour Underwriting provide insurance for cross undertakings and there are a number of litigation funders who are willing to fund the same. Some insurers will defer the initial premium.
Can the cross undertaking in damaged ever be increased?
It is open to a Respondent / Defendant to a freezing order to ask the Court at the freezing injunction return date for the cross undertaking in damages to be increased and “fortified” (which refers to mechanisms to secure payment in the event the undertaking is called on).
When considering the question, the Court will adopt the course which will involve the least risk of injustice. It is balancing act between having an undertaking which is of realistic value but ensuring that the fortification of it does not stifle the underlying litigation.
A cross undertaking in damages is not required where the Applicant is the Crown or a law enforcement body.
How we can help
Whether you are a Defendant or Claimant, understanding the importance of the cross undertaking in damages is vital in any freezing order claim. Without proper thought at the outset, an Applicant might have its application for a freezing order rejected. As a Defendant, it is important to understand that the undertaking in damages can be relied upon if the freezing order is later dismissed.
Our brilliant team is here to help. We have dealt with many cross-undertaking issues since 2002 and have good relationships with insurers and litigation funders, if required, and are here to help you today.
Freezing Injunction legal costs
Whether you are applying for one or on the receiving end of a freezing order, it is vital to properly understand the cost implications of the freezing order process. Freezing orders are very serious types of Court orders and often form part of complex litigation proceedings.
Understanding the cost implications of this, for either side to the claim is important and our superb team has been acting for individuals, companies and financiers since 2002 on both sides of legal proceedings. We can advise you on the legal costs of this type of litigation so that you are fully aware of it from the very earliest stage of the claim.
There are two main sets of costs to consider – depending on whether you are defending a freezing order or applying for a freezing order
Legal costs from a Defendant / Respondent perspective
If you are on the receiving end of a freezing injunction, it is vital to get an early grip on potential legal costs;
- The freezing order itself will contain provisions within it allowing the Respondent permission to spend money for its legal costs defending / dealing with the freezing order claim. It is very important to remember that a Court will never allow a freezing injunction to be used to try and put pressure on a Defendant by cutting off their ability to pay for its own legal expenses.
- towards the back of the freezing order document will be a paragraph setting out the Respondent’s entitlement to spend its money on legal costs (so long as they are reasonably incurred). The Respondent is normally required to inform the Applicant of the anticipated amount of money being spent on legal fees and the source of those funds. There can be some complications relating to what are called proprietary freezing injunctions, but this is something that the expert team at Francis Wilks & Jones can advise further on.
- if you are defending a freezing injunction, then the level of freezing injunction legal costs will depend on the action you then take. If the Respondent / Defendant simply agrees to a continuation of the freezing injunction without seeking to amend it or defend it, then legal costs will be limited to the initial legal advice on what the freezing order means and making sure the terms of the order are properly complied with. Even so, this can still be quite a lot of money as it will often involve drafting witness statements setting out what assets the Respondent has and where they are located.
- if a Defendant either wants to alter the terms of the freezing injunction or look to dismiss the freezing order, then costs will increase as evidence normally has to be presented to the Court in either of those circumstances. At Francis Wilks & Jones we can advise you on the likely level of freezing injunction legal costs if you are a recipient of a freezing injunctions.
Legal costs from the Applicant’s perspective
If you are looking to obtain a freezing injunction, Francis Wilks & Jones can advise you on the likely costs. There are the time costs of the solicitors dealing with the following;
- advising on the merits of any injunction application
- advising on any alternatives to a freezing injunction
- preparing witness evidence and supporting documentation
- preparing the freezing order application and the draft freezing order
- instructing a specialist freezing order barrister to attend Court and prepare key documents such as the freezing order skeleton argument
- attendance at Court
- arranging service of the freezing order
- (for example, on the Respondent’s banks or companies)
- dealing with the Return Date
- dealing with any other issues such as a challenge to the freezing order, issues with third parties such as banks, cross undertaking in damages, full and frank disclosure obligations etc
- dealing with any defence to the main claim
- Court issue fees
How we can help
Each case will be different, from the evidence involved, the number and type of Defendants, what they have done and the outcome the Applicant is after. Our experience in dealing with freezing orders since 2002 means we have a wealth of expertise to draw upon in order to find the right solution for you. We do understand the cost limitations Claimants are under, especially if they are looking to recover money they believe has been wrongly taken from them. Our expertise means that we work with clients to ensure we maximise the chances of success whilst keeping control of potential legal costs exposure.
How long does a freezing order last?
A freezing order is initially granted on what is called an “interim basis” i.e. it only lasts for an specific initial period of time – normally 7-14 days.
This is because most freezing orders are granted without any notice to the Respondent / Defendant (in accordance with Practice Direction 25A) in order to avoid tipping that party off in advance and allowing them the chance to put their assets beyond the reach of the party owed the money.
At the end of the 7 or 14 days, there is then another Court hearing date (known as the Return Date Hearing) at which the various parties then attend Court. At that hearing, the Court can do a number of things;
- keep the freezing order in place until a full trial (or other Court order in the claim);
- alter the terms of the freezing injunction granted at the original hearing but keep that revised freezing order in place until the trial of the main claim or until the Court makes a further order in relation to the freezing order itself;
- dismiss the freezing injunction completely if a successful application has been made by the Respondent for it to be dismissed.
If the freezing order is continued until “trial or further order”, the injunction remains in place until there is a trial of the underlying litigation claim or the parties otherwise agree by consent at a later stage for the freezing order to be withdrawn. The latter normally happens upon settlement.
Therefore, a freezing injunction can last for different periods of time depending upon the agreement or otherwise of the parties concerned in the application.
How we can help
Our expert team of freezing injunction order solicitors can assist whatever your enquiry. Our knowledge of freezing injunctions is unrivalled having dealt with many such claims since 2002. We can assist you whether you are a claimant, Defendant or third party.
Served with a Freezing Order? Ten immediate steps to take
If you have been served with a freezing order it is vital you act quickly. Freezing orders are extremely serious and failure to comply with the terms of the freezing order properly can even lead to imprisonment for contempt of Court.
Our expert team have been acting for parties served with freezing orders since 2002. Let us help today. Quick, commercial expert advice is our trademark.
1. Take immediate legal advice
It is imperative in our view that you seek legal advice if you are served with either a UK or a worldwide freezing order., This is the case if you are a Respondent and /or third party named in the order.
Freezing orders or freezing injunctions are by their very nature are very serious Court orders and often impose wide ranging restrictions on any individual or company served with this type of Court injunction. The sanctions for not complying properly with the terms of a freezing order can be very serious – and can even lead to imprisonment for contempt of Court.
By seeking early legal advice, you can put yourself in the strongest position possible, particularly with regard to
- understanding the exact terms of the freezing order.
- not breaching the terms of the freezing order.
- challenging the order and trying to have the freezing order dismissed.
- altering the terms of the freezing order originally granted at Court
- working out your potential exposure to legal costs
- making sure you are protected if it is later shown that the freezing order should not have been granted – by making sure the Applicant’s cross undertaking in damages is sufficient.
- the underlying legal claim – working out the basis of the Applicant’s legal claim and how best to defend those separate legal proceedings
- advising you on how much money you can spend on legal advice, living expenses and business expenses.
2. Obtain a note of the hearing
If the freezing order was obtained without notice (practice direction 25A) to you (known as a without notice application or ex parte hearing), then it goes without saying that you would not have had the opportunity to attend Court at the time the freezing injunction was granted by the judge.
- as such, you are entitled to be shown a full note of the hearing which the solicitors acting for the Applicant should have produced from notes they took during the initial hearing.
- a full note of the freezing order hearing should be included in the papers which have been served on you but, if it is not, then you must immediately ask for a full note of the hearing as you are entitled to understand fully what was said at the hearing and the reasoning behind the granting of the freezing order.
3. Consider requesting a full written transcript of the freezing order hearing
Whilst the note of the hearing produced by the Applicant’s solicitors is often useful, you can request a full typed transcript of the freezing order hearing. Any Court hearing of this nature is recorded and it is possible to ask for that recording to be typed up by a certified transcriber so that you have a complete record of what was said at the hearing.
- Requesting a full transcript can take time so it is vital to make this request as soon as possible.
- whilst the Applicant’s solicitors will make every attempt to fully explain what was said at the hearing in their note, it goes without saying that it is often impossible to record manually every word spoken at the hearing.
It can be very useful to have a full transcript of the hearing, especially if you are considering challenging the granting of the freezing order when the case next comes back to Court.
4. Examine the grounds the Applicant relied upon to obtain the freezing order
In order to obtain a without notice freezing order under CPR Part 25, the Court has to be satisfied that there are very strong grounds to grant such a serious order.
Normally , both sides to a claim are entitled to attend a hearing, but in circumstances where only one party (i.e. the Applicant) attends Court, the Court has to be satisfied that there are very strong grounds for the granting of such an order. The nature and basis of the obligations imposed on an Applicant are set out in later in the Guide, but it is essential to review the evidence in support of the freezing order very carefully, together with the legal arguments put forward.
5. Examine the extent of the disclosure made to the Court by the Applicant
When applying for a freezing order, the Applicant is under a duty to comply with “full and frank disclosure” obligations set out by the Court.
- the Applicant must be completely truthful and disclose to the Court all matters and facts within its knowledge at the time of seeking the order, even if they are unhelpful to the Applicant.
- the Applicant cannot just turn up to Court on a without notice basis and present to the Court information which only helps the Applicant but does not reveal information which might be damaging to the application.
If an Applicant has failed to provide full and frank disclosure to the Court at the time of the granting of the freezing order, this can be a ground to have the freezing order dismissed or the freezing injunction terms altered. The Court insists upon full and frank disclosure because of the one sided nature of these applications and the fact that the Respondent is unaware of them until such time as it is served with the Court papers.
6. Read the freezing order carefully and fully understand its terms
It is imperative that a Respondent to a freezing order understands the full terms of the order granted by the Court. And do so very quickly as there are often time limits by which certain actions have to be taken as ordered by the Court.
- freezing orders come with what is called a “Penal Notice” on the front i.e. a notice which explicitly states that failure to comply with the terms of the order can result in imprisonment and/or a fine for contempt of court.
- by their nature, freezing orders are one of the most serious forms of order a Court can make. It is therefore imperative that you take the time to read the terms of the order fully and invest sufficient time to understand it properly.
We would strongly recommend that you seek freezing order legal advice with regard to the terms of the freezing order as, bluntly put, non-compliance can result in a finding of contempt of Court and the ultimate sanction for that is imprisonment.
Often, Defendants served with freezing orders are faced with very onerous & strict obligations, often relating to disclosure of documents. These obligations can come into existence at the very time the order is served on you by a process server acting on behalf of the Applicant. You are entitled to take your time to read the terms of the order and fully understand it. The process server should even take the time to read out the key provisions of the order (although they are not qualified to explain or interpret any such provisions).
7. Check the dates by which certain obligations and / or requirements must be completed
Often, a standard form of freezing order will include certain dates by which specific actions must be undertaken. Commonly, these relate to disclosure of documents and also relate to production of an affidavit (a form of witness statement) by which you must set out on oath details of your assets, either domestically or on a worldwide basis (up to defined limits).
- it is vital that you fully understand the dates by which any actions must be taken and start preparing the relevant documentation / information as soon as possible following service on you.
- by doing so, you have the best chance to comply with the terms of the freezing order and, for example, if it appears that for whatever reason you are unable to meet one of the dates as set out, you can apply to Court to alter the terms of the order prior to the expiry of the particular date.
Always remember that if you fail to comply with any terms of the freezing order, the Applicant can make an application to Court for contempt of Court which could lead to a fine or even imprisonment.
Failure to comply without having made an application to Court for an extension of time can also lead to payment of the Applicant’s legal costs if they make an application for Contempt of Court and committal to prison.
It is therefore always better to deal with any issues in advance and if necessary go back to Court to seek an extension of time for dealing with any matters if it is clear further time is required. It is not recommended that a freezing order is put aside for reading later, as the failure to read it immediately is not an excuse for failing to comply with the stated requirements.
8. Consider whether the Applicant’s undertaking in damages is sufficient
As part of granting without notice freezing orders under Practice Direction Part 25A, the Court will insist that the Applicant provides what is called a cross undertaking in damages.
- this is a sum of money which the Applicant must either pay into Court as part of the granting of the order or provide an undertaking to pay in circumstances where it is later shown that the freezing order should not have been granted and the Respondent has suffered damages as a result.
- if it appears that the monetary sum offered by way of an undertaking is insufficient to cover any estimated likely damages you may suffer as a result of the wrongful granting of a freezing order, you can make an application to Court for the undertaking in damages to be increased and/or fortified by the Applicant actually paying money into a Court bank account which will then be held there until the main litigation dispute is resolved.
9. Consider whether you require more time to comply with the freezing order or require a delay of the Return Date Hearing
It might be that you require more time to comply with certain aspects of the freezing order. The documents served on you are likely to be detailed and setting out a range of information and allegations – all of which need to be looked at carefully.
If that is the case, then you need to give careful thought as to the extent and amount of additional time required to comply with certain aspects of the order.
- this will need to be set out in an application notice supported by evidence in a written affidavit form giving reasons why it is that you require further time.
- you should also ensure you make the application to the Court prior to the expiry of the time period set out in the freezing order.
- for example documents maybe held outside the jurisdiction or alternatively it might take time to obtain information from banks or other third parties as ordered to do so by the Court.
10. Prepare for the Return Date Hearing in Court
In all without notice freezing orders under Practice Direction Part 25A, the Court will set a date (known as the Return Date) when both the Applicant and the Respondent will attend Court – generally 7 – 14 days after the making of the freezing order.
The purpose of that hearing is to enable a Respondent the right to reply to the application which he previously had no notice of at the time it was granted.
At the return date hearing a Respondent can
- fully contest the granting of the freezing order and look to dismiss the freezing order,
- ask to vary or alter some or all of the terms of the freezing order; or
- simply agree to a continuation of the freezing order until trial or any earlier order in the main litigation claim.
In advance of the return date, the Respondent will commonly want to prepare Affidavit evidence setting out its side of the events and also confirming compliance with the terms of the freezing order. This is particularly the case if the Respondent wants to contest the order in any way.
Commonly the Court will order that the return date is either 7 or 14 days after the granting of the freezing order. It might be that you require further time to prepare that evidence in which case we would recommend that you make an application to adjourn the return date to enable you sufficient time to prepare all the relevant paperwork (the previous point refers).
How we can help
Being served with a freezing order can be a frightening experience. Our team can quickly help you regain control, identify the key issues and set out a timetable to make sure you comply with the freezing order. We can then discuss wider tactics, the best way forward and how to maximise your chances of a successful outcome.
8 Important issues to consider when trying to remove a freezing order
It is possible for a Defendant to challenge a freezing injunction – either get it dismissed or have the terms varied. Our experts have been helping individuals, companies and financiers with these complex applications since 2002. Let us help you too.
The grounds on which such an application can be made are as follows:
1. The Court had no jurisdiction to make the order
For a freezing order to be granted in England & Wales, the Court must have jurisdiction to hear the substantive claims between the parties.
- a freezing order cannot simply sit alone in isolation.
- it is there to support the main set of proceedings between the parties which are to be litigated out in the ordinary way – for example a claim in fraud. These claims are known as the substantive claims and it is these which the Court must have jurisdiction to hear.
2. The Applicant’s substantive claim is not a good arguable case
There is no obligation on the Applicant at the time of seeking a freezing injunction to establish that the substantive claim is “bound to succeed” or has more than a 50% chance of success at trial.
- the Court will consider the merits of the substantive claim at the time of the application for a freezing order is made (or where the Applicant is seeking to continue it); and
- a case which is shown to be simply no more than arguable is insufficient to support either the granting or continuation of a freezing injunction.
The Court will review for example any defences which may be available to the Respondent including for example, the defence of set-off when deciding whether the Applicant has a good arguable case.
3. There is no risk of dissipation of the Respondent’s assets
To grant a freezing order without notice pursuant to Practice Direction Part 25A, the Court must be persuaded that there is a real risk that any judgment may not be satisfied because the Respondent may seek to remove assets beyond the reach of the Applicant. The Court applies an objective test in this matter and considers the effect of the Respondent’s actions, not his intentions.
- if a Respondent can provide evidence of his strong financial status, business history, links with the jurisdiction or indeed links to countries in which the judgment would be enforceable and supports this with evidence of the ability to pay any ultimate award of damages, then it is likely that the Court will dismiss the freezing order on the basis that there is no real risk that the Respondent will remove his assets from the jurisdiction;
- for example, if the Respondent’s main asset is a property in England and there is no evidence that the property is up for sale and the Respondent has always lived in England, has family connections in England and close links to the that country, then the Court will take this carefully into account when determining whether there is a real risk of dissipation of a Respondent’s assets.
In Lakatamia Shipping Co Ltd v Morimoto  EWCA Civ 2203 it was established that a real risk of dissipation is shown by demonstrating that the Respondent “may” unjustifiably dissipate assets.
The point was recently considered in Les Ambassadeurs Club Ltd v Yu  EWCA Civ 1310 in which it was stated that “The focus should be on whether, on the facts and circumstances of the particular case, the evidence adduced before the court objectively demonstrates a risk of unjustified dissipation which is sufficient in all the circumstances to make it just and convenient to grant a freezing injunction. Plainly a risk which is theoretical, fanciful or insignificant will not meet that threshold…”.
4. Inordinate delay by the Applicant
Speed is of the essence for an Applicant when seeking a freezing order from the Court.
A freezing order is what is known as an “equitable remedy”, and any Applicant must act reasonably and without any undue delay in pursuing its claim.
- any unreasonable delay also counts against an Applicant when seeking or continuing a freezing injunction or freezing order.
- if a Respondent can show that a delay has occurred and that delay is not explicable by the Applicant, then this can provide a ground for the discharge of a freezing order.
5. Failure by the Applicant to comply with its duty of full and frank disclosure
Where a freezing injunction has been granted without notice (ie without giving notice to the Respondent of the application), the Applicant must ensure that all material and relevant matters are brought to the attention of the Court at the time the freezing injunction is applied for (even if such matters go against the application).
- this is very important due to the fact that with all without notice applications under CPR Part 25 a Respondent does not know that the Court hearing is happening and does not have the ability to comment on anything which the Applicant tells the Court about in the course of the application. Without notice applications are by their very nature, one sided applications;
- therefore, it is incumbent upon the Applicant to make sure that every material and relevant fact is made known to the Court when a without notice freezing order is applied for, even if those facts are not particularly helpful to the Applicant. Matters to be disclosed can be matters of either law or fact and should include any relevant issues even if adverse to the Applicant.
Examples of such matters include any defences to the claim that may be available to Respondent together with any potential claims by a Respondent of privilege against self-incrimination.
In circumstances where the non-disclosure is serious in nature, Courts has been known to dismiss a freezing order. In less serious cases, Courts have set-aside the original order and re-imposed the order on specific terms – but often with an order that the Applicant pays the Respondent’s costs on what is known as an indemnity basis – something which can be very expensive for the Applicant indeed.
6. Demonstrating that the freezing order is oppressive
Freezing orders should not be used oppressively. For example, a common term within a freezing order is that the Respondent should be able to meet his ordinary living expenses as well as his reasonable legal costs or business expenses. Freezing orders that fail to include these terms can be seen as oppressive and as such, are open to challenge by a Respondent.
- additionally, a freezing injunction should not prohibit a Respondent from dealing with or disposing of any assets in the ordinary and proper course of business.
- a freezing order should not be used to cause a Respondent excessive difficulties in undertaking its business and should not for example cause the business to cease trading. In those circumstances, an application can be made to Court to have the freezing order discharged.
7. The Applicant has not complied with its undertakings, or alternatively, damages would not be an adequate remedy
When obtaining a freezing order, an Applicant is normally required to give what is called an “undertaking in damages” to compensate a Respondent if it is later shown that the Applicant was not entitled to the injunctive relief sought. The undertaking itself is given to the Court and not the Respondent. Even where there is no express undertaking, there is always an implied undertaking.
However, a Respondent may be able to seek discharge of the freezing order on two grounds:
- the Applicant has not complied with his undertakings or is shown to have insufficient means to meet any undertaking in damages; and/or
- the Respondent can show that damages would not be an adequate remedy for losses that he will sustain.
Where there are doubts about the Applicant’s ability to pay any undertakings in damages, a Respondent can make an application to Court that the Applicant be ordered to pay actual money into Court as security in the event that it is later shown that the Applicant was actually not entitled to the injunctive relief.
The quantum / value of any such payment will take into account the value of the underlying claim, the Respondent’s potential defence and the potential costs that it will incur. A Respondent can seek to vary any such order if it considers that costs, in excess of those provided for, may be incurred by it in relation to responding to the underlying claim. Of course, such a request would have to be justified by reference to specific evidence and any decision to seek further payments will be entirely at the discretion of the Court.
8. Other considerations
If a Respondent wishes to dismiss or remove a freezing order which has been obtained without notice, the right route is that he must apply to the judge and not, for example, attempt to appeal to the Court of Appeal without having first been to the Court in the first instance.
The application must be made promptly if at all possible.
Even if you do not agree with the evidence in support of, or the existence of, a freezing order, despite any protests of innocence you may have it is vital that the correct procedure is adopted. Please remember that any breach of a freezing order, no matter the reliability of the grounds it was obtained on, is contempt of Court and could lead to committal to prison.
Freezing injunction – what is meant by a “Good arguable case”
The requirement to have a “good arguable case” is a key requirement when applying for a freezing injunction. Failure to convince a Court that you have a good arguable case will mean the freezing order won’t be made. Our superb team can help advise you on this important legal issue and maximise the prospects of obtaining a freezing order.
Threshold required by the Court to show a good arguable case
The threshold for a good arguable case is relatively low for the Applicant to get over. Comments by a leading Judge states
“the right course is to adopt the test of a good arguable case, in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which a judge believes to have a better than 50% chance of success”.
How does the Judge deal with this at the first freezing order hearing?
It is not a requirement at the initial freezing injunction hearing that a Judge must form a view that the Applicant will or will not succeed at the final trial in its underlying litigation claim.
- However, a Judge will consider the apparent strengths and weaknesses of the Claimant’s case when deciding whether the Claimant’s case is sufficiently strong to reach the appropriate threshold and grant a freezing injunction.
- This will include assessing issues such as the apparent plausibility of statements in affidavits in support of the application. However, the test is not particularly an onerous one for the Claimant to reach.
If the Applicant is able to convince the Court of the merits at this first hearing (which is normally heard without any notice to the Respondent) then an interim injunction (i.e. a freezing order) may be granted and a further hearing listed which must then be notified to the Respondent.
Will this issue be looked at again at the Return Date Hearing?
The question of a good arguable case can sometimes become more important at the Return Date Hearing – which usually happens 7-14 days after the freezing order was granted by the Judge – and which is the first time that Respondent can present its position to the Court.
At the Return Date Hearing, the Judge will decide whether the freezing injunction should continue until trial of the underlying litigation proceedings or until any further order in the substantive proceedings. By that stage, it is likely that the Respondent will have provided evidence in response to the Applicant’s original affidavits and the Court will consider these carefully before making a further order.
However, it is established case law that the Return Date Hearing must not become a trial in itself, even in circumstances where the Respondent is trying to have the freezing injunction dismissed.
Other commentary with regard to this particular requirement states that a claimant’s case must not be so strong as to warrant summary judgment under CPR 24.
How we can help
Please contact one of our expert freezing injunction solicitors now for your friendly consultation. At Francis Wilks & Jones, we have all the freezing injunction experience required to handle any type of claim, including good arguable case issues. Whatever your situation, do get in touch.
Service of a freezing order and other documents
Proper service of the freezing order and all associated documents after the freezing order has been granted at Court is vitally important. Our superb team has successfully dealt with numerous service questions over the years. Let us help you too.
Proper service of freezing order Court documents is vital
If a freezing order is granted, the Applicant must ensure that every effort is made to arrange proper service of all relevant documents on a Respondent. Those documents need to be served as soon as possible and also be personally on the Respondent if at all possible. An Applicant’s solicitor will usually retain the services of a specialist process server to ensure service is carried out.
The process server will then need to produce an affidavit of service detailing the time, date and the manner of the service, together with exhibiting the documents he served on the Respondent.
At Francis Wilks & Jones, we have been working with specialist process servers for over 20 years and can help maximise the chances of the freezing order being personally served, however evasive a Defendant is. The rules relating to service of documents as set out in CPR Part 6 Service of documents can be complex and our legal experts are here to help.
What documents must be served on the Respondent?
An Applicant will need to serve the Respondent with the following documents:
- an original sealed copy of the freezing order made by the Court.
- a sealed copy of the application notice.
- a copy of the affidavit in support of the application, together with any exhibits to that affidavit.
- a full note of the hearing prepared by the Applicant’s solicitors.
- a sealed copy of the application notice for continuation of the freezing order and setting out the date by which the parties must return to Court for the next stage of the proceedings (“the Return Date”).
- an issued claim form and particulars of claim in respect of the substantive proceedings, if issued and not yet served.
Service on other third parties
In addition to the Respondent, the Applicant must serve a copy of the freezing order on the following parties:-
- any other party named in the proceedings.
- any third parties who may hold assets belonging to the Respondent, such as banks where accounts are held. This is vital as it reduces the risk that the Respondent may seek to move monies out of the jurisdiction or beyond the Applicants reach. If the bank is not on notice of the injunction, then it cannot be criticised if monies are removed from a Respondent’s bank account prior to being put on notice.
How we can help
The service rules relating to Court documents are very strict. Not complying with CPR Part 6 Service of documents requirements can quickly lead to difficulty. Our team at FWJ works with experts in this area to ensure that valid service is carried out in accordance with the order made by the Court. If it is not possible to serve the Defendant personally, then we can help ensure that valid substituted service of the freezing order is made in accordance with the rules.
Please contact one of our expert freezing injunction solicitors for your friendly consultation. At Francis Wilks & Jones, we have all the freezing order experience required to handle any type of freezing injunction situation and can help with any service related issues which might arise.
Freezing Injunctions – dealing with the main litigation claim
A freezing injunction is there to support an underlying litigation claim.
The leading authority on this is The Siskina v Distos Cia Naviera SA  AC 210,  3 All ER 803 in which it was stated that the court’s power to make an injunction was dependent on the existence of an underlying cause of action, which the court asked to make the injunction has jurisdiction to decide.
It was also confirmed, in Lakatamia Shipping Co Ltd v Morimoto  EWCA Civ 2203, that the very nature of the cause of action that the Applicant brings can itself demonstrate the existence of a real risk of unjustified dissipation.
It is therefore vital for someone applying for a freezing order to make sure that the main litigation proceedings are properly dealt with. Our brilliant team can help make sure you cover all the bases, whether you are a claimant or Defendant.
The granting of a freezing order is only the start, not the end of a claim.
A freezing order is only ever a remedy to prevent a Respondent putting his / her assets out of the reach of the Applicant. Whilst the Applicant may have the protection of a freezing order in place, it is still under an obligation to pursue its substantive claim against the Respondent – normally a money-based claim in respect of the losses it has suffered. That claim must be progressed through the Courts in the normal way. It is vital for anyone thinking about applying for a freezing order to be aware that they could end up in a full set of litigation in order to resolve the underlying dispute between the two sides.
Steps in the main litigation claim
A freezing order cannot be obtained in isolation without the existence of a substantive underlying claim against the Respondent (although it may not yet have been issued).
This can be a lengthy process and ultimately end up in trial at Court. Set out below are the main steps which will have to be undertaken in the substantive claim.
1. Drafting detailed particulars of claim
Particulars of claim is the legal term given to a document which formally sets out the detail of the legal claim an Applicant has against a Respondent / Defendant. They must be compliant with Part 16.4 of the Civil Procedure Rules which deal with “statements of case”.
These documents normally need to be prepared by a barrister, as they specialise in drafting these types of detailed documents. In a complex case involving various allegations of wrongdoing and high levels of loss, the particulars of claim can run to many pages and will take numerous revisions before getting it right. It is vital that it is correct as it will form the basis of the Applicant’s ongoing claim throughout the entire litigation proceedings. It is the document which the Respondent will have to answer by way of a formal defence.
- if the freezing injunction has been obtained in circumstances of great urgency, the Court will not require the detailed particulars of claim to have already been prepared. There simply wont be time to prepare the full particulars.
- However, the Court will expect to see a “brief particulars of claim” setting out at a high level the nature of the Applicant’s legal claim.
- if, (as is often the case in fraud claims) the freezing injunction is obtained after a lengthy period of investigation and preparation, the particulars of claim, setting out the Applicant’s substantive case, will need to be prepared and put before the Court on the application for the freezing injunction.
2. Defence and counterclaim
If the Respondent intends to fight the claim, it will prepare and serve a defence to all of the allegations set out in the particulars of claim. Again, this can be a detailed and lengthy document as the Defendant is expected to respond to each and every paragraph in the Claimant’s particulars of claim. It must be compliant with Part 16.5 of the Civil Procedure Rules
The Respondent may even seek to Counterclaim against the Applicant for any losses it alleges it has suffered or money it believes it is owed. If that happens, the Applicant then must prepare a defence to the counterclaim to avoid judgment being entered for that amount. A counterclaim must be compliant with the format set out in Part 20 of the Civil Procedure Rules.
3. Cost and case management conference
The parties will then have the matter listed for what is known as a Cost and Case Management Conference (CCMC) at which stage the Court will review the claim to date and put in place steps to take the matter forward to trial (commonly known as “directions”). The content and format of a CCMC is set out in Part 29 of the Civil Procedure Rules.
- Directions are akin to a timetable put in place by the Court that the parties have to adhere to, setting out a chronological sequence of steps / actions for all parties to carry out up to and including trial.
- In advance of that hearing, the Applicant will need to provide detailed information with regard to the likely costs of the litigation pursuant to Practice Direction 3D on costs management – these are provided on a Precedent H Form.
- The Applicant / Claimant will also need to set out details about nature and extent of any disclosure of documents within the proceedings pursuant to CPR Part 31 – disclosure and inspection of documents.
The CCMC will take place at Court (normally listed for 1-2 hours) and a judge will review the Court file before putting in place directions to take the matter to trial.
4. Disclosure of documents
An Applicant will then need to produce what is called a disclosure list. This is a list setting out all relevant documents it has (or had) in its possession which are relevant to the current legal proceedings. This exercise in complex fraud proceedings can be very onerous indeed. Disclosure is dealt with CPR Part 31 – disclosure and inspection of documents.
- it is common now for large volumes of documents to be stored electronically (especially in large scale frauds) and parties often need to agree the parameters of any electronic search for documents (what is called “e-disclosure”). If necessary, the parties will need to appoint an independent IT expert to undertake searches of relevant databases by way of agreed key word search criteria;
- the electronic process is in addition to the more traditional review and cataloguing of all hard copy documents which in large scale cases can also be a very lengthy and time consuming exercise.
However, disclosure is of paramount importance in claims of this nature. Failure to properly undertake the disclosure process can result in a Respondent making applications against an Applicant for specific disclosure of relevant documents and in very exceptional circumstances can even lead to a party making an application against the other party to have its claim struck out for failure to properly complete the disclosure exercise.
There are also costs consequences for failing to properly cooperate with any order of Court. Even if your primary case is stronger and likely to succeed, a failure to comply with any order of Court can lead to interim cost orders against you before trial.
Once disclosure lists have been completed
- they are exchanged with the Respondent who will in turn send their own list;
- each party can then request copies of some or all of the documents on the opponents list or alternatively go to inspect the originals (such requests must be made within a specified time limit);
- in large cases the inspection and copy process can take considerable time. Even when complete, the Applicant and its legal advisors will then need to sift through all the documents to understand their important or otherwise in the claim thus extending the time taken up by the disclosure process.
5. Witness statement / affidavit evidence
The next stage of the directions process is normally commonly the preparation of witness statements (or affidavits in certain types of proceedings), detailing for each individual who has direct knowledge of the issues relevant to the claim, their evidence in relation to the substantive litigation case. Witness and affidavit evidence is dealt with in Part 32 of the Civil Procedure Rules.
In complex fraud cases these statements can be very lengthy indeed but are crucial to get right.
- the statements set out the factual basis of an Applicant’s claim and commonly witness statements are required from various different individuals and even third parties to the litigation. They will also exhibit all the key documentation to support an Applicant’s claim.
- it is critical that these statements are properly produced as, ultimately, the Applicant will only be able to rely upon the details contained in these statements at trial. These documents can often take a number of months to prepare and complete.
Once complete, the witness statements will be sent to the Respondent and they will likewise send theirs to the Applicant. It is then necessary to review the Respondent’s statements in detail and begin to gauge the quality of their evidence and whether it will ultimately “stand up at trial”.
6. Expert evidence
If the claim involves, for example, complex financial matters or allegations of forgery etc, it is likely that the parties will need to agree to the appointment of an independent expert (eg a forensic accountant) to provide an expert’s report dealing with certain aspects of the alleged fraud. Expert evidence is dealt with in Part 35 of the Civil Procedure Rules.
That person will also be required to give evidence at Court. Usually, the Court will insist on a single expert being instructed by both parties, but on occasion it might be that each party will seek to rely upon its own expert on a particular issue.
Experts need to be fully briefed and instructed pursuant to the Part 35 of the Civil Procedure Rules 1998 and there are strict guidelines as to how this is to be done to ensure the independence of the expert in the proceedings is maintained.
7. Interim Court applications during the litigation proceedings
Throughout the entire litigation process, either side to the proceedings may make an “interim Court application”. These are governed by Part 23 of the Civil Procedure Rules. Essentially this is the ability to apply to Court for various types of orders, such as:
- a Respondent seeking to vary the terms of an order;
- a Respondent seeking to discharge an order;
- applications to strike-out some or part of the other side’s case;
- applications for specific disclosure;
- requests for Further Information in circumstances where a party’s pleaded case is unclear;
- an application for security for costs; and
- an application for committal of a Respondent to prison for contempt of court for not complying with the terms of a freezing order.
Often, these types of applications cannot be foreseen at the outset of the legal proceedings but their possibility must be factored into proceedings of this nature as it is unusual to run a case without making (or facing) at least some interim applications.
8. Preparation for trial
The parties will then need to make time and / or resource to prepare for trial. In large cases, this is an extensive exercise as it is the Applicant’s responsibility to prepare all of the relevant paperwork in to paginated bundles ready for the Court. Often many duplicate sets need to be produced so that all relevant parties have a single set of files from which to work from.
As part of the preparation for trial, it is very common to have meetings with the barrister acting for the Applicant and these need to be factored into any proceedings.
- If a barrister has been instructed, a brief will also have to be delivered detailing all of the background to the case, enclosing all of the pleaded documents and any ancillary evidence and providing detailed instructions as to what is sought.
- This brief can take some time to prepare, as it effectively is an extension of the evidence in support of the claim. The barrister (unless previously involved) will come in “cold” and have to read such documents to come up to speed and understand the claim.
Equally, there is often considerable correspondence between the parties to the claim, together with correspondence with the Court, third parties, such as the experts, forensic accountants and investigators.
There will also be a formal court hearing known as a Pre Trial Review – to check that both sides to the dispute have done all they should have before the trial itself takes place. In advance of this each side has to lodge Pre Trial checklists with the court. Pre Trial checklists and reviews are dealt with by Part 29 of the Civil Procedure Rules.
Ultimately, if the matter is not capable of settlement and / or the parties not willing to discuss settlement, the case will end up at trial. Trials in complex cases involving fraud can be lengthy indeed due to the very detailed nature of the allegations and the number of witnesses often required to attend Court (including expert witnesses).
- Complex cases are likely to last a minimum of 10 days and representatives of the Applicant needs to be aware that attendance at Court throughout this period is required
- If the Applicant is a person, or has a nominated individual (where a company brings a claim), to provide evidencethat individual will usually be required to attend the trial and be cross-examined by the Defendant’s barrister on the evidence in support of the claim (and any other evidence filed in the proceedings).
The process and prodecure for the lead up to trial and trial itself is dealt with by Part 39 of the Civil Procedure Rules.
How we can help
Our expert commercial litigation team have been carried out complex litigation cases for the past 20 years. We are extremely experienced in dealing with the underlying litigation proceedings and making sure that we maximise the outcomes for our clients.
Freezing orders and the duty of full and frank disclosure
The obligation of full and frank disclosure of documents and information is critical when applying for a freezing injunction. Failure to do it properly can lead to the freezing order being struck out. Our superb team can help advise on this issue.
With freezing injunctions, the disclosure obligations on the person or company applying to court for the freezing order are very strict indeed.
Generally, freezing order applications are made without any notice or warning to the Respondent under paragraph 2 of the Practice Direction Part 25A. The whole purpose of a freezing order is based on a belief that the Respondent will dissipate or hide its assets unless it is forced not to. As with all applications to the Court made without notice to the other party, there is a duty on the Applicant to give what is called “full and frank disclosure”. That is – set out all relevant facts of the case to the Court. This is due to the fact that without notice applications are one sided, i.e. the Respondent is not present at the initial application.
- as such, an Applicant is obliged to set out all material matters to the Court, (factual or legal), which may have a bearing on whether the Court grants the freezing order or not. Such disclosure relates not only to matters which are helpful to an Applicant’s claim, but importantly any facts or legal issues which are or may be harmful or detrimental to an Applicant’s claim;
- for example, the Applicant is obliged to inform the Court as to whether it believes the Respondent has any likely defences to the claim or set-offs which it may apply eg under paragraph 16.6 of the Civil Procedure Rules. Equally if the Applicant has a previous conviction for dishonesty, this needs to be revealed to the Court.
The relevant principles were summarised in Brink’s Mat Ltd v Elcombe  1 WLR 1350:
(1) The duty of the Applicant is to make ‘a full and fair disclosure of all the material facts’.
(2) The material facts are those which it is material for the judge to know in dealing with the application as made. Materiality is to be decided by the court and not by the assessment of the Applicant or his legal advisers.
(3) The Applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the Claimant but also to any additional facts which he would have known if he had made such inquiries.
(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the Applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant.
(5) If material non-disclosure is established the court will be ‘astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure … is deprived of any advantage he may have derived by that breach of duty’.
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the Applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the Applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) It ‘is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded’. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms. ‘When the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant … a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed’.
The point is that failure to provide full and frank disclosure to the Court may result in a Respondent challenging the freezing order at the return date when all the parties are back in Court. Ultimately, a lack of full and frank disclosure by the Applicant can lead to the freezing order being dismissed and if that happens, the Applicant faces a risk of a very substantial costs order being made against it.
How we can help
Whether you are the Applicant or Respondent, we can help advise on the question of full and frank disclosure. Call our expert team today
Freezing Injunctions – allowable living, legal and business expenses
The question of whether a Respondent / Defendant has sufficient money for living expenses under the terms of an order can be a very contentious one. We have advised both Defendants and Applicants on this issue since 2002. Let us help you too.
What a Respondent / Defendant can spend on reasonable living expenses
One of the key terms of a freezing injunction is the entitlement of the Respondent (i.e. the person receiving the freezing injunction) to be permitted their reasonable living expenses.
- a freezing injunction is not allowed to put a Defendant under pressure in the litigation;
- the purpose of a freezing injunction is to prevent a Defendant from putting assets beyond the reach of the claimant.
Therefore, freezing orders should not restrict someone who has received one from maintaining their normal living standards.
Usually, a sum of £500 per week is provided for in a standard order for freezing orders living expenses. Often, this is not enough for an individual to live on or pay their reasonable living expenses including their mortgage payments etc.
Therefore, it is possible at the freezing injunction return date (normally 7-14 days after an injunction is granted) to go back to Court and ask for the freezing order to be altered or varied and the freezing injunction living expenses increased.
Clear evidence is needed to increase reasonable living expenses
In order for a Court to permit and increase in the living expenses amount, the Respondent will have to
- set out in an affidavit (witness statement) that the reasonable living expenses are inappropriate and too low;
- disclose documentation such as utility bills, mortgage statements and documents evidencing other living expenses (including bank statements and receipts) to persuade the Court that the sum provided for in the original freezing injunction is insufficient.
If this is served on the Applicant’s solicitors – then they usually consent to the increase which will then be rubber stamped by the Court. However, if the increase is contested, it will have to go to a Court hearing to be resolved.
It is a rule that freezing orders must not be used in an oppressive or unfair way.
A freezing order therefore cannot be used to make life so difficult for someone that they have to stop trading their business. A company served with a freezing order / freezing injunction has the right to continue trading and make payments in the ordinary course of business – e.g. to employees and suppliers
A Respondent is entitled to spend money on legal expenses in order to take advice on the freezing order and the claim made against them. A person or company cannot be prevented from spending money on legal advice in order to deal with the Court documents served on them;
Often there is a provision in the freezing order which sets out that the Respondent must inform the Applicant of the amount being used for legal expenses and the source(s) of that money. Otherwise, so long as the expenditure is “reasonable”, then the Respondent can spend money with its lawyers dealing with / defending the claim against it.
Worldwide Freezing Order
It is possible to obtain freezing orders to extend to a worldwide basis – but they are not easy to get. Our superb team has experience of obtaining and maintaining worldwide freezing injunctions since 2002. Let us help you too.
Worldwide freezing orders are only granted on rare occasions.
Obtaining a worldwide freezing order
The Court must be satisfied the Defendant has assets located outside England & Wales and there exists a danger that they might be got put beyond the Applicants reach if the freezing order is not granted on a worldwide basis.
- Whilst granting of a freezing order on a worldwide basis is quite unusual, it is a very useful tool for any claimant who suspects that the Defendant has assets abroad and is likely to dispose of them if the freezing order is limited to England and Wales only;
- To obtain a worldwide freezing order, additional evidence needs to be put before the Court with regard to the assets of the Defendant and it needs to be clear that there are grounds for the freezing order to be extended beyond the normal jurisdiction.
The freezing order team at Francis Wilks & Jones work closely not only with our clients but also with a team of experts needed in such cases, ranging from expert freezing injunction barristers to specialist investigators and forensic accountants.
What to do if you are served with a worldwide freezing order
If you are served with a worldwide freezing order, it is imperative that you understand the nature and terms of that worldwide freezing order and ensure that you do nothing to breach of it. Acting in breach of a worldwide freezing order is liable to lead to a finding of contempt of Court and ultimately this can lead to imprisonment.
It is therefore very important to understand the nature and extent of the worldwide freezing order and the associated disclosure obligations which are often accompanied with the freezing order. Failure to properly disclose your worldwide assets subject to the worldwide freezing order can also be a contempt of Court. Legal advice is highly recommended.
How we can help
Our team of experts have wide experience in both obtaining and defending worldwide freezing orders. Whatever your situation, speak to us and we can advise on the best way forward.
If there was ever a star rating for law firms, Francis Wilks & Jones would score five stars plus. Professional and pro-active, they were able to understand my problem quickly, provide expert advice, outline a solution and put it into place with a successful outcome. I should have gone to them sooner.A client we successfully defended