Served with a Freezing Injunction

Top Tips

  • Don’t panic. Don’t bury your head in the sand.
  • Seek urgent legal advice – contact us
  • Comply with the terms of the freezing order. If you act in breach of the order you may be held to be in contempt of court and could be sent to prison, fined or have your assets seized.
  • Consider whether there are grounds to vary or discharge the injunction.

Don't Panic

If you’ve been served with a freezing injunction, it’s important not to panic, although it’s equally important not to bury your head in the sand. The shock of being served with the papers (usually by a process server) and feeling of impotence can cloud judgement. However, there may be grounds for challenging or getting rid of the injunction and strict compliance with its terms is required in the meantime.

Please contact us for a free, and no-obligation, conversation.

Seek urgent legal advice

This may sound like an advertisement; however, it is generally a good idea to contact us or another specialist firm of solicitors as soon as you’re served with the legal papers. We can guide you through the urgent steps that are often required to comply with the terms of the freezing order so to avoid any suggestion that you are in 'contempt of court' (see below).

Further action can be taken to protect your position which may include applying to court to vary or discharge the injunction, defending the claim, or negotiating out of the proceedings on your behalf.

Injunctions are a heavyweight piece of litigation and the stakes are often high. It is no exaggeration to say that if an injunction is not handled correctly, not only could it result in you losing your assets, you could ultimately be imprisoned. Specialist advice is paramount for these reasons alone.

Instructing a solicitor in this area will also put a protective barrier between you and your opponent and take the heat off you.

The freezing injunction will normally include an exception that enables you to spend reasonable sums on legal advice and representation and, even if it doesn’t, we may be able to apply to court to allow you to do so.

Please contact us for a free, and no-obligation, conversation.

Comply with the order

Upon receipt of a freezing order, you should firstly read and review the terms carefully. In particular, you should take note of the assets which are frozen by the injunction, comply with any deadlines for disclosure of information and ascertain the date of any further court hearing (known as the ‘return date’), at which you may be represented and may seek to fight the injunction by having it varied or discharged.

In the meantime, it is essential that you comply, in full, with the terms of the freezing injunction.

If you acted in breach of the order you may be held to be in contempt of court and could be sent to prison, fined or have your assets seized. In addition, any other person who knows of the order and does anything which helps or permits you to breach it may also be in contempt of court.

This is explained in the penal notice which is contained on the front page of the freezing order which provides:-

“PENAL NOTICE
IF YOU DISOBEY THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE YOUR ASSETS SEIZED.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS THE RESPONDENT TO BREACH THE TERMS OF THIS ORDER MAY ALSO BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED.”

A common mistake made by unrepresented parties is that they fail to comply in time with tight deadlines that are included in the freezing order. It is likely that you will have been ordered to inform the claimant’s solicitors of your assets and to provide further information such as whether they are in your own name or not, whether they are solely or jointly owned and to give their value, location and further details. You are then usually required to swear and serve an affidavit setting out such information.

If the provision of information regarding your assets is likely to incriminate you, you may be entitled to refuse to provide it; however, this is rare and it is strongly recommended that you seek legal advice before refusing to provide the information. The reason for this is that if you wrongly refuse to provide information you will be in contempt of court and this could render you being liable to be imprisoned, fined or have your assets seized.

If the freezing order is made against your company, that company must take all steps possible to prevent a breach of its terms. You should therefore immediately inform the relevant people in your organisation about the order and give notice of its terms to banks or others that you jointly hold assets with. It is also generally also a good idea to check the authority given to your staff, officers and agents and, if necessary, to withdraw or change it to ensure that your company does not deal with assets in breach of the terms of the freezing order.

Please contact us for more information or if you need legal assistance.

Grounds to vary or discharge the injunction

The effect of the freezing injunction on you can be extremely harsh. You should consider at an early stage whether there may be grounds to vary or discharge (get rid of) the injunction.

Discharge the freezing injunction

The court may discharge or set aside the freezing injunction if there are grounds to do so. Whilst each case is different and the list below is not exhaustive, the court may do this if:-

  • The claimant does not have a cause of action; in other words it has no legal or equitable right to sue you;
  • The claimant does not have a good arguable claim;
  • The freezing order is oppressive;
  • The claimant delayed in: (a) making the application for the freezing injunction; and/or (b) pursuing its claim;
  • You do not have assets or the money and property that are frozen belongs to somebody else;
  • There is no real risk of you dissipating (getting rid of) your money and assets;
  • The courts of England and Wales do not have jurisdiction to impose the freezing order;
  • The claimant failed to disclose material facts to the court when seeking the freezing order;
  • The claimant has not complied with undertakings it has given to the court which are contained within the freezing order;
  • The claimant does not have the means to pay damages to you (or any other party notified by order) which may be suffered as a result of the freezing injunction, if it later transpires that the court should not have granted it in the first place;
  • An award of damages will not adequately compensate you for the harm and loss that you may suffer as a result of the freezing injunction, again if it later transpires that the court should not have granted it in the first place;
  • An award of damages would be an adequate remedy to your opponent; and
  • You are able to provide some alternative form of security by, for example, paying a sum into court.

If the injunction is discharged, depending on the circumstances, the court may order that the claimant pay your costs and damages for the loss caused by the injunction.

Vary the freezing injunction

Even if you are not in a position to apply to court to discharge the injunction, you may need to vary the freezing injunction. The usual reasons for doing this include the following:-

  • The amount of money that is frozen is too high as it does not reflect a realistic value of the claim against you;
  • You need to pay a specific expense or liability;
  • The amount of money that you are permitted to spend each week in respect of your ordinary living or business expenses is too low;
  • You need to spend reasonable sums on legal advice and representation and the freezing order, for whatever reason, does not include this default exception; and
  • You need more time to comply with the deadlines for providing information about your assets or the affidavit relating to them.

Freezing injunctions normally include a provision that enables the parties to agree to vary the terms of the order in writing. Therefore before making an application to court it is usually necessary to try to reach agreement with your opponent’s legal representatives. If matters are not able to be dealt with by agreement, your legal team will need to consider making an application to court.

Please contact us for more information or if you need legal assistance.