In commercial disputes, businesses often need the courts to intervene quickly to prevent conduct that could cause immediate harm. One of the most common legal tools used for this purpose is the prohibitory injunction.
A prohibitory injunction is a court order that prevents a person or business from continuing a particular action. It is designed to stop conduct that is alleged to be unlawful while the dispute between the parties is resolved.
This guide explains how prohibitory injunctions work in England and Wales, when courts grant them and how they are used in commercial litigation.
What is a prohibitory injunction?
A prohibitory injunction is a court order restraining a party from carrying out a particular act. The purpose of the order is to prevent conduct that could cause harm before the court has had the opportunity to determine the dispute at trial.
In commercial cases, prohibitory injunctions are commonly used to
- stop breaches of contractual obligations,
- prevent the misuse of confidential information or
- restrain conduct that threatens a business’s commercial interests.
Unlike mandatory injunctions, which require a party to take positive action, prohibitory injunctions simply prevent a defendant from continuing or repeating the behaviour complained of. Because of this, they are generally considered less intrusive and are therefore more frequently granted by the courts.
When will the court grant a prohibitory injunction?
The courts in England and Wales approach prohibitory injunctions by applying the principles established in American Cyanamid v Ethicon Ltd [1975] AC 396.
Under this framework, the court first considers whether the claimant has established a serious issue to be tried. This requires the claimant to demonstrate that the underlying claim has a real prospect of success and is not merely speculative.
The court then considers whether financial damages would be an adequate remedy. If the harm suffered by the claimant could be adequately compensated through money, an injunction may not be necessary.
Where damages would not adequately protect the claimant’s position, the court will consider the balance of convenience. This involves weighing the potential harm to each party if the injunction is granted or refused. The court seeks to determine which outcome would cause the least injustice pending trial.
These principles ensure that prohibitory injunctions are granted only where they are necessary to protect the parties’ rights before the dispute is fully resolved.
In what situations are prohibitory injunctions used?
Prohibitory injunctions arise in a wide range of commercial disputes. They are particularly common where ongoing conduct threatens to cause serious harm to a business.
For example,
- a business may seek a prohibitory injunction to restrain a former employee from breaching restrictive covenants contained in an employment contract.
- Similarly, an injunction may be sought to prevent the disclosure or misuse of confidential information.
- Prohibitory injunctions are also frequently used in disputes involving intellectual property, where a claimant seeks to prevent the continued infringement of rights.
- In other cases, the court may restrain conduct that interferes with contractual relationships or commercial operations.
Because these disputes often involve ongoing behaviour, prohibitory injunctions provide an effective means of preserving the status quo until the court determines the parties’ rights.
Can prohibitory injunctions be granted urgently?
Yes. In many commercial disputes, prohibitory injunctions are sought on an urgent basis.
Where the claimant can demonstrate that immediate action is required to prevent serious harm, the court may hear the application very quickly. In some cases, an interim injunction may be granted within days of the application being issued.
In particularly urgent situations, the court may even hear the application without notice to the defendant. This procedure is used where giving advance warning would risk defeating the purpose of the order, such as where a defendant might destroy evidence or take steps to continue the unlawful conduct.
However, applicants seeking without notice relief must comply with strict duties of full and frank disclosure to the court.
How long does a prohibitory injunction last?
Many prohibitory injunctions are granted on an interim basis, meaning they remain in force until the court has determined the dispute at trial.
At trial, the court may decide to grant a final injunction if it concludes that the defendant’s conduct was unlawful and should be permanently restrained.
Alternatively, the injunction may be discharged if the claimant fails to establish the underlying claim.
The duration of the injunction therefore depends on the outcome of the litigation and the nature of the dispute between the parties.
What happens if a prohibitory injunction is breached?
Breaching a prohibitory injunction is treated as contempt of court.
Contempt of court is a serious matter and may result in severe penalties. The court has the power to impose fines, seize assets or, in extreme cases, impose a custodial sentence.
For businesses and company directors, it is therefore essential to comply strictly with the terms of any injunction order. If there is uncertainty about the scope of an injunction, legal advice should be obtained immediately.
In some circumstances, a party may apply to the court to vary or discharge the injunction if the order is unclear or overly restrictive.
The role of prohibitory injunctions in commercial litigation
Prohibitory injunctions are among the most frequently used remedies in commercial litigation.
They allow the court to intervene quickly to prevent harmful conduct while the dispute between the parties is resolved through the normal litigation process. By maintaining the status quo, these orders ensure that the court’s final judgment remains effective.
For businesses facing urgent threats to their commercial interests, prohibitory injunctions can therefore provide an important form of legal protection.
