Businesses and individuals in a legal dispute can apply to the courts for an injunction to make the other side do something, or to prevent them from doing something, on a temporary basis. The aim is normally to uphold the status quo so that neither side is disadvantaged awaiting settlement of a dispute. Often, you can apply for an injunction before the trial of the main dispute – especially if it will give you a tactical advantage if an injunction is granted.
In an emergency, you can sometimes apply for an injunction without notifying the other side – for example, where it would greatly increase the damage to your business if there was a delay, or where the other side is likely to do something to damage your case if they are given notice of the application.
Types of injunction
Freezing injunction
This stops the other side disposing of, or dealing with, its assets until the main dispute is resolved. ‘Assets’ could include bank accounts, bonds and other financial instruments, even if the other side is holding them on trust for a third party.
Freezing injunctions can also be used to prevent the other side from discarding of any such products that are likely to be needed as evidence. A freezing order can also be made against the other side’s bank if you can show there is a risk that the other side will try to hide or dissipate funds to avoid paying compensation if they lose.
The court will only grant a freezing injunction if it is ‘just and convenient’ to do so. You must show you have a good, arguable case, but do not have to prove that you will win the main dispute. It’s vital that you give the court all the facts, and not just those that support your application. The court then balances your likely loss or damage if the injunction is not granted against the other side’s likely loss or damage if it is.
In making its judgment, the court considers whether money would be adequate compensation for you – if it would, you are less likely to get an injunction. There must also be a ‘real risk’ of the disposal or use of the assets. You will usually have to agree that you will compensate the other side (and sometimes third parties who will be affected) if it later turns out that the injunction should not have been granted.
Search Order Injunction
This goes further, as it allows you to enter the other side’s premises to search for and take away documents, computers and other materials. For example, if you think there is a risk they will destroy computer records or documents which could be evidence in, say, a shareholders’ dispute between you, a search order allows you to take them away so you can keep them safe. It is extremely difficult to get a search order – you need very strong evidence.