How to Apply for a Freezing Injunction Efficiently and Economically

Witnessing your money or your assets vanish before your eyes is panic-inducing, especially when you cannot stop it from happening. The same feeling is associated with attempts to hide or relocate assets before you recover what is yours.

On the bright side, the law provides a solution to this situation, a freezing injunction. These injunctions serve to ‘legally handcuff’ assets and prevent anyone from moving or concealing money or property until the court has the opportunity to decide the owner.

Essential Requirements

Courts don't just hand out freezing orders like parking tickets. You need to prove you've got a genuine case worth protecting.

Strong Legal Foundation

Your case needs what courts call a "good arguable case." You don't need an ironclad guarantee you'll win, just enough evidence that a reasonable judge would say "this deserves a proper hearing."

Asset Dissipation Risk

Courts take concrete evidence seriously. Has the other party been dishonest before? Are they moving money around suspiciously? Document everything, because vague worries won't cut it.

Financial Guarantees

And finally, you'll need to provide security, a deposit that could range from tens of thousands to millions, depending on your case. The court wants to know you can cover the other party's losses if your freezing order turns out to be wrong.

Proper Jurisdiction

Proper jurisdiction in English courts generally requires that the defendant resides here or that their assets are located in the Claimant's vicinity. Clear this up as soon as possible to avoid unnecessary time and resource expenditure.

Asset Evidence

Reasonable detail to determine the existence of the required specific assets is required. However, you need not conduct your own expensive investigations. The courts expect detail, not forensic accounting reports.

How the Application Process Works

Recent reforms in substantive areas of legislation and the accompanying rules have been, and should continue to be, time-saving and predictable, which is a considerable improvement.

Without Notice Applications

Without the defendant knowing, you may apply for a domestic freezing injunction to prevent them from dissipating or moving their assets. The courts then return the application for a decision in 7–14 days.

Required Documentation

To satisfy each of the criteria necessary for obtaining a freezing order, you will need to submit Form N244 and supportive affidavits. The affidavit itself and the accompanying documents must be complete and relevant.

Full Disclosure Obligation

Since you are applying without the other party knowing, courts expect you to be open about the weak spots in your overall case.

Quick Service Requirements

You must notify the defendant and any other person in control of their assets immediately after the order is made. The law in this area is that speed is of the essence to maintain order.

Cost Management Strategies

Proportionality must govern each of your steps to prevent recouping overwhelming legal fees. Recovery of £50,000 in assets will not justify an expenditure of £100,000 in legal fees.

In the latest reporting period, account freezing orders totalled approximately £220 million, representing 70 % of the £314.9 million in seized and frozen assets under forfeiture powers, an increase from the prior year’s base.

Scope Selection

Domestic freezing orders covering England and Wales are significantly cheaper than the global orders. You should only go global if it is truly necessary.

The significance of freezing assets has increased and is reflected in government statistics.

Proportionate Investigations

Asset tracing by forensic accountants can be very costly. Obtain sufficient evidence to support your application, but save the more detailed investigations until after the order has been secured, at which point you can proceed to detailed investigations.

Settlement Leverage

The moment a freezing order is issued, many settlements tend to be completed in record time. This is due to the defendants’ understanding of the situation and its stark severity.

Enforcement and Duration

Standard Duration

Most freezing orders are set for an ephemeral period, typically 7 to 14 days. When the order expires, the court will convene again to consider whether to extend the order, discharge the order, or continue the order until trial.

Enforcement Methods

Enforcement of the order is done via committal proceedings in contempt of court. Only those who were served with the order in the first place can be subjected to contempt proceedings.

Conclusion

Freezing injunctions can serve their purpose effectively, but they require careful and intelligent planning. The key is seizing the moment as soon as the warning signs appear and then striking the right balance of evidence to prevent over or under-investigation and finding the suitable legal skills to correlate with your case’s level of complexity. Effectively, this type of injunction can preserve a large amount of assets and encourage early settlement.

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)