Lord Donaldson, when he was Master of the Rolls in the mid-1980’s, described the drastic nature of a freezing injunction as being, “one of the law’s two nuclear weapons,” the other being an Anton Pillar Order or Search Order.
The freezing order itself, if obtained successfully, could serve as an early “knockout blow,” within litigation against a party, who would ordinarily attempt to evade the enforcement of a judgement obtained against them. This form of interim relief represents an important tool within the armoury of a commercial litigator; a supplementary remedy granted to protect the efficacy of proceedings, domestic or foreign.
A freezing order is an interlocutory injunction, which restrains a respondent from disposing of or dealing with his own assets. The purpose of a freezing order is to prevent a defendant from moving, hiding or otherwise unjustifiably dissipating his assets so as to render himself as immune from the enforcement of judgement.A freezing order is not a proprietary remedy.
They are not granted to give a claimant advance security for his claim; although in practice, they may have that effect. They are not an end in themselves. They are a supplementary remedy, granted to protect the efficacy of court proceedings, domestic or foreign.
Originally, a freezing order was only obtainable in support of litigation brought within England & Wales. These days, a freezing order is often obtained in support of foreign litigation, even in cases where the primary court where the litigation is proceeding would not have a similar power to grant a freezing order (e.g. Switzerland , USA etc.). In 2002, Moor Bick J referred to the jurisdiction as enabling the English Court to act as an “international policeman”.
To obtain a freezing order, the applicant must establish:
- A good arguable case;
- A real risk that the respondent will dissipate his assets if the order is not given; &
- That the respondent has assets and (where a worldwide freezing order is sought) that the known assets within the jurisdiction would be insufficient to meet the claim if successful.
Applications for freezing injunctions are often made at short notice, with limited time to prepare. Accordingly it is important to instruct solicitors, who are able to plan properly to ensure that they can deal with the evidence and documents as efficiently as possible.
Here at Lewis Nedas, we are regularly instructed on behalf of private and commercial clients, who have secured or are in the process of securing judgements against a defendant/s, only to discover that there is a real risk that any assets that the defendant /s may have is at a real risk of dissipation. Also, in circumstances where a fraud has been committed and one wishes to ensure that the fraudster does not remove stolen monies from the victim’s reach, a freezing order may be the answer.
The interim relief afforded by a freezing order are usually utilised by individuals, companies, employers, hedge funds and brokerages, who are engaged in complex commercial disputes or have been the victims of fraud. Investors, who risk their assets on the stock market and in unregulated schemes together with companies, who look to transfer their assets to a parent company offshore, seek the protection of a freezing order as ammunition to support their claim.
At Lewis Nedas, we see it as being imperative that the correct steps are taken to protect our clients’ interest. At times, this has warranted the use of a formidable weapon such as the freezing order, in order to put tactical pressure upon a defendant whilst taking into account the strategic considerations of commercial litigation.
For advice on any of the above, contact Jeffrey Lewis and Jasbir Kaur on 020 73872032.
