HomeFWJ takeawayTakeawayFraud and freezing ordersDefending a freezing orderVarying the terms of a freezing order – the grounds explained

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.

Introduction

Even if there are no grounds to have a freezing order removed completely, there may be legitimate reasons to vary the terms of the freezing order set out in the court document itself.

A variation can either be agreed by consent between the parties to the litigation or, alternatively in the event that the applicant’s solicitors refuse to agree the variation by consent, a respondent can do so by making an application to court.

Common grounds for seeking the variation of the terms of a freezing order include the following:

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.

Commonly, a sum of £500 a week is 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 the assets – see our booklet titled “freezing orders – A Practical Guide”) then the court will normally allow a respondent to use his 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.

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 equates to 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 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 full disclosure 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. For more details regarding the privilege against self-incrimination, please see our booklet in this series dealing with this particular aspect.

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.

Whatever your freezing order needs, contact one of our expert team and we can assist.

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