Disputing a Freezing Injunction

What is a freezing injunction? In simple terms, it’s a powerful legal tool allowing an Applicant (typically the Claimant) to safeguard the value of the Respondent’s assets until a judgment is obtained against them. 

Upon initial success of the application, the court will order that the Respondent’s assets cannot be disposed of, dealt with, or diminished. This order will then be relayed by the Applicant to major banks, prompting them to freeze any accounts held under the Respondent’s name. 

In most cases, the application for the freezing injunction and initial hearing proceeds without the respondent’s presence or awareness. Subsequently, the freezing order is served on the Respondent, usually after the accounts and other assets have been frozen. 

How to Overcome a Freezing Injunction 

During the initial application hearing, which the respondent typically does not attend, the judge schedules a further hearing, usually 1 – 2 weeks later, termed the Return Date. This allows the Respondent an opportunity to contest the freezing injunction and present arguments for its removal. 

Overcoming a freezing injunction hinges on several critical factors, which are often key to discharging the injunction: 

– Prompt Action: Time is of the essence, with only a few days available before the Return Date. Therefore, engaging legal representation promptly is crucial. Opposing a freezing injunction is complex, and swiftly seeking assistance from competent solicitors is key. 

– Full and Frank Disclosure: Since the Respondent cannot defend themselves initially, the Applicant must provide full and frank disclosure of any evidence during the first hearing. Scrutinising the application documents meticulously for evidence of full and frank disclosure or lack thereof is essential. Non-compliance with this duty can be grounds for the freezing injunction to be discharged. 

– Demonstrating Low Risk of Asset Dissipation: The freezing injunction is often granted on the premise of a risk of asset dissipation. However, presenting evidence to the contrary can sway the court. Factors such as a good credit history, timely filing of accounts, and a transparent company structure can strengthen your case. 

– No ‘good arguable case’: If at the return date, you can demonstrate that the Applicant’s underlying claim lacks merit and is unlikely to succeed at trial, you have a strong argument for the freezing injunction’s discharge. 

– Adjourn the Return Date if Necessary: 1 – 2 weeks will often not be long enough for you to be fully prepared for the Return Date hearing. You only get one chance at the Return Date hearing, if you are unsuccessful, you will need to show in any future application to discharge the injunction that there has been a material change in circumstances since the Return Date.  Often the time provided by the Court for the Return Date will be insufficient if the parties are to argue whether the freezing injunction should continue. Requesting an adjournment to a later date can provide additional time to address the accusations made by the Applicant effectively. 

Freezing Injunctions: Damages 

The Applicant will need to provide the court with an undertaking (promise) to pay any damages incurred as a result of the freezing injunction, should the freezing injunction be discharged at the return date or trial. It is therefore crucial to keep accurate records of losses incurred, such as loss of business. 

Contact RFB’s Commercial Litigation Solicitors 

For inquiries regarding commercial litigation matters or assistance with freezing injunctions, feel free to contact Litigation Solicitor Nii-Amaa Ollennu at 0208 138 8133 or via email at n.ollennu@rfblegal.co.uk, or Senior Litigation Partner Rudi Ramdarshan at 0207 467 5765 or via email at r.ramdarshan@rfblegal.co.uk. We’re here to help.