Freezing injunction

The court must have jurisdiction to make an asset freezing order. Nevertheless, in practice, that is not such a difficult hurdle to overcome.

If there are English proceedings, there is a basis of jurisdiction over the defendant and this gives power to the court to award a freezing injunction.

If there are foreign proceedings and the defendant is present in England, separate proceedings for a freezing injunction can be commenced. If the defendant is not present in England, the separate proceedings for a freezing injunction may be commenced under the Civil Procedure Rules 6B.[1] Under CPR, the claimant may serve a claim form out of the jurisdiction with the permission of the court where a claim is made for an interim remedy under section 25(1) of the Civil Jurisdiction and Judgments Act 1982.

Good arguable case on the merits

To obtain a freezing order, the applicant must establish a good arguable case on the merits. This is the common requirement for cases where the judgment has not yet been awarded.

The ‘good arguable case’ test was subject to a comprehensive review by the courts in the context of jurisdictional gateways.[2]  The central concept at the heart of the test is ‘a plausible evidential basis’.[3] Thus, the claimant has to establish they have some substantive claim that requires the asset of the defendant to be frozen. The claim should be more than barely capable of serious argument,[4] however, the stronger the case on the merits, the more likely the court will award a freezing order.

A real risk that assets will be dissipated if the order is not given

The purpose of freezing injunction is to prevent the dissipation of assets. For instance, the fact that the defendant has acted wrongfully on the merits can be taken into account as evidence that the defendant is likely to attempt to dissipate assets. The correct test for showing that the targeted assets exist is that there are “grounds for belief” that the respondent has (or is likely to have) assets.[5]

It must be just and convenient to grant the freezing order

Under section 37 of the Senior Courts Act 1981, the courts have the discretion to grant a freezing injunction and will do so only if it is just and convenient. Therefore, freezing injunctions are a discretionary remedy. The court is not obliged to grant an injunction; thus, the court should be satisfied that making the order guarantees the interests of justice. Furthermore, an injunction is subject to equitable rules. In particular, ‘the clean hands’ doctrine required the court to deny equitable relief to a party who has acted inequitably in regard to the matter for which it seeks an injunction.

If the freezing order is requested in support of foreign proceedings, there is an additional requirement that reflects the fact that the courts of England do not have a direct interest in the litigation.

Under s.25(2) Civil Jurisdiction and Judgments Act 1982, the court may refuse to grant the relief if the court has no jurisdiction to the subject-matter of the proceedings in question that makes it inexpedient for the court to grant it.

If applying on an ex parte basis, there is a duty to provide full and frank disclosure.

Freezing orders are generally sought by claimants on ex parte (without a notice application). The applicant is under a duty to make full and frank disclosure. This means that the applicant must accurately and fully disclose all material facts to the court determining the application for the freezing order. If a party does not comply with the duty of full and frank disclosure, the freezing order could be set aside.

How Gherson can assist

Gherson litigation team has considerable experience conducting your arbitration, litigation and freezing orders. If you have a potential claim, please contact us to discuss potential funding options.

For any queries about your specific circumstances, please contact us to discuss potential funding options. For any queries about your specific circumstances, please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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