Frequently Asked Questions
We answer some of the frequently asked questions on freezing orders we are regularly asked by our clients:
What does a freezing injunction do?
A freezing injunction, or freezing order, temporarily stops someone from removing assets located within England and Wales, or from dealing with assets that they may have elsewhere in the world.
The order can relate to all of the defendant’s assets generally or to specific assets. The most common type of order will put a maximum sum which is limited to the value of the claim.
The courts in England and Wales can also grant a freezing order if the defendant has assets in England and Wales and someone has commenced proceedings against them in another country.
What assets can be frozen?
In short, all types of assets can be frozen. This includes:
- bank accounts
- shares
- motor vehicles
- land
However, the court will not grant an order which is overly oppressive, for example, it will grant an order which would force a business to stop trading or if an individual cannot pay for living expenses and reasonable legal costs.
Why would I need to get a freezing order?
If you have started proceedings against someone who has assets that you believe they may try to dispose of or otherwise try to put out of your reach, a freezing order preserves those assets in the event that you win a judgment against them and you need to recover damages and costs. However, a freezing order does not give you security over the assets.
How do I get a freezing order?
You will need to apply to the High Court with a “without notice” application.
This means that the defendant will not be notified of your application until after the hearing. You will have a duty as the claimant to disclose all relevant information at the hearing because the defendant will not have the opportunity to make representations to the judge.
Legal advice should be sought when making a without notice application as you will also be required to give undertakings (legally-binding promises) to the court.
You must provide evidence to support your application and sign an affidavit (a statement given under oath to the court). Freezing orders are very restrictive on the defendant, so the court may not grant the freezing order even if you have met all of the necessary requirements.
For this reason, the court will only grant a freezing order if it is “just and convenient”.
A freezing order will only be granted until the next hearing which the defendant will have notice of and will be allowed to challenge the order.
If the order is not discharged at this next hearing, it will continue only until judgment or a further order is made by the court. The exception to this is where a freezing order is granted after the judgment has been made, and in this case the freezing order will remain in force indefinitely until payment is made.
What do I need to establish to obtain a freezing order?
The courts have set out six conditions to obtain a freezing order.
- You must have a legal or equitable claim.
- The English court must have jurisdiction.
- You must have a good arguable case.
- Assets must exist.
- You have to prove that there is a risk that the assets will be dissipated.
- You have to provide an undertaking in damages.
How do I prove a dissipation risk?
You have to show that there is a real risk that a judgment against the defendant will not be paid unless restrained by an injunction, without which the defendant will dissipate or dispose of assets or that assets will be dealt with so as to make enforcement of a judgment more difficult.
What is an undertaking in damages?
Before the court will grant a freezing order you have to undertake to the court to pay any damages that the other side or any other party notified of the order might suffer as a result of the freezing order being granted if, at a later date the court decides the order ought not to have been granted.
This has to be considered seriously before making an application for a freezing order.
When can I apply for a freezing order?
Most freezing orders are sought before the main proceedings are started because the claimant already has concerns that the defendant will try to dispose of their assets to avoid paying any sums due under a judgment.
However, a freezing order can also be sought after a trial has concluded until the judgment has been enforced.
When is a freezing order not available?
A freezing order cannot be obtained if:
- the defendant has filed an acknowledgement of service or a defence (unless the court gives permission)
- in proceedings against the Crown
- in proceedings against a foreign state, unless that state has given written consent
- to enforce a penal law of a foreign state
What happens if someone breaches a freezing order?
A freezing order can affect third parties as well as the defendant. For example, if someone’s bank account is frozen, the bank also must ensure that it does not breach the order by allowing anyone to deal with the bank account.
A breach of a freezing order is very serious and the person who breaches the order will be held to be in contempt of court. The Court has extensive powers to impose sanctions for contempt of court which can range from a fine to imprisonment.