Worldwide Freezing Injunction - Freezing Orders

A worldwide freezing injunction is a legal order issued by the high court in England and Wales to prevent a party from disposing of assets worldwide.

This type of injunction is often sought in cases where there is a concern that a party may try to move assets to avoid the enforcement of a judgment or to frustrate the claims of creditors.

The freezing injunction is designed to maintain the status quo by preventing the defendant from taking any action that would hinder the ability of the claimant to recover their judgment or damages. It essentially “freezes” the assets of the party against whom the injunction is granted.

Typically, a worldwide freezing injunction is sought in cases involving fraud, financial wrongdoing, or other situations where there is a risk that the defendant may attempt to hide or transfer assets to escape legal consequences.

The injunction may be granted at the outset of legal proceedings or at a later stage when there is evidence of a real risk that the defendant may dissipate their assets.

Expert Commercial Law has access to an expert panel of solicitors who are highly experienced in dealing with worldwide freezing injunctions. If you would like more information or any assistance with your case, then please get in touch with us today to find out more. 

Criteria for granting a worldwide freezing order

In order for the English courts to grant a freezing order, the applicant must satisfy several stringent criteria:

• Good substantive claim: The applicant must demonstrate a good arguable case in an underlying substantive claim against the defendant. There must be evidence that the order would be just and convenient to grant.
• Risk of asset dissipation: There must be credible evidence suggesting that there is a real risk that the defendant may dissipate their assets to avoid the consequences of an adverse judgment.
• Jurisdiction: The court must have jurisdiction over the matter, either because the defendant is domiciled within the jurisdiction or the substantive cause of action occurred within the jurisdiction.
• Use of assets: The court must be satisfied that the defendant has assets that would be affected by the order.
• Proportionality: The scope of the freezing order must be proportionate to the claim and necessary to prevent the risk of asset dissipation.

Process of obtaining an worldwide freezing injunction

• Application: An application for a worldwide freezing injunction is typically made ex parte (without notifying the defendant) to prevent the risk of asset dissipation upon learning of the application.
• Evidence: The application must be supported by an affidavit providing detailed evidence of the claim and the necessity for the order, including the risk of asset dissipation.
• Hearing: The court reviews the application in a private hearing. If the judge is satisfied with the evidence, they will issue the WFO.

Full and Frank Disclosure

When applying for a WFO, the applicant has a duty of full and frank disclosure. This means all material facts, favourable or unfavourable, must be disclosed to the court. This includes any information that could influence the judge’s decision whether to grant the order.

Failure to disclose relevant information can lead to the order being set aside and possible sanctions against the applicant, including costs penalties.

Cross undertakings in damages

The applicant must usually provide a cross-undertaking in damages as a condition of the order. This serves as a security for the defendant. It compensates them for any loss they might suffer from the order should it later be found to have been wrongly granted.

The court needs to assess the risk of unjust injury to the defendant and balance this against the applicant’s need for asset preservation.

Subsequent procedures

The injunction is typically granted on an interim basis and is subject to further review. A return date is set for a full hearing where both parties can present their arguments, and the court can decide whether to continue, vary, or discharge the injunction.

Once granted, the WFO must be complied with globally. Enforcement can be challenging, especially internationally, and may require cooperation with foreign jurisdictions.

What assets can be frozen?

In a worldwide freezing injunction, the court has the authority to freeze various types of assets owned or controlled by the party against whom the injunction is issued. The specific assets that can be frozen may depend on the jurisdiction and the wording of the court order, but they typically include:

• Bank Accounts: The court can order the freezing of bank accounts held by the party subject to the injunction. This includes both domestic and international bank accounts.
• Real Estate: The injunction may extend to real property, such as houses, land, or commercial properties, owned by the party in question.
• Investments: Investments, including stocks, bonds, and other financial instruments, may be subject to the freezing order.
• Business Interests: The court can freeze the party’s interests in businesses, partnerships, or other entities, preventing them from selling or transferring such interests.
• Intellectual Property: Intellectual property rights, such as patents, trademarks, and copyrights, may be included in the freezing order to prevent their disposal or transfer.
• Assets Held in Trusts: If the party has assets held in trust, the court may extend the freezing injunction to cover those assets.
• High-Value Items: Valuable items such as art, jewellery, and luxury goods may be subject to the freezing order to prevent their sale or transfer.

Freezing injunctions are a powerful tool for protecting assets, but they are not without their risks. If a freezing injunction is granted without proper justification and a ‘good arguable case’, it can be costly and embarrassing for the respondent. It is important to seek legal advice from a specialist freezing injunction solicitor before applying for a freezing injunction.

At Expert Commercial Law, our panel of solicitors have many years of experience in dealing with cases involving worldwide freezing injunctions. If you would like a free initial consultation to find out more about our services and how our experts can help you, then please get in touch today. 

How can Expert Commercial Law assist?

Our panel of worldwide freezing injunction solicitors can assist parties in taking legal action against a defendant who might be at risk of dissipating assets.

Our panel firms provide guidance throughout the process and can help protect their client’s rights and interests. They can also help evaluate the strength of the case and advise on the best course of action.

Our panel firms can assist with domestic freezing injunctions, which involves the freezing of assets within the UK, or a worldwide freezing injunction.

If you have received a worldwide freezing injunction, you should read the terms of the WFO and contact a solicitor for advice. A breach of this type of order could result in you being held contempt of court.

If you need help with a freezing injunction order, then please get in touch with us today.

Our solicitors also help with commercial claims, such as partnership disputes, fraud claims and CCJ removal.

Please note we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a freezing injunction query or a commercial law case, we will pass your case on to a panel firm in return for a fee from our panel firms. We will never charge you for passing your case to a panel firm.