Freezing Orders – The Commercial Litigator’s Nuclear Weapon

Where a claimant can show a good arguable claim to be entitled to money from a defendant and there is a real risk that the defendant will remove assets from the jurisdiction, or deal with them so as to render them unavailable or untraceable, the UK courts may grant an injunction to restrain the defendant from removing them from the jurisdiction, or from dealing with the assets (whether located within the jurisdiction or not).

The freezing order represents an important tool in the armory of the commercial litigator, which if successful can often result in an early “knock out blow” within litigation against a party who would otherwise seek to evade the enforcement of a judgment obtained against them. The drastic nature of the freezing order led to it being described somewhat graphically by Lord Donaldson, when he was Master of the Rolls in the mid 1980’s, as “one of the law’s two “nuclear” weapons”; the other being the Anton Piller Order, or search order. For this reason, this has led the courts to put in place a number of procedural safeguards for respondents in relation to these orders.

THE LIMITED PURPOSE OF FREEZING ORDERS

The freezing order is granted for an important but limited purpose: to prevent a defendant dissipating his assets with the intention or effect of frustrating enforcement of a prospective judgment.

They are 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.



Source by Hefin Rees