Fraser Dawbarns Obtains Substantial Freezing Injunction In Order To Protect Client’s Assets

Joshua Shuardson-Hipkin has this month secured an urgent freezing injunction on behalf of a client in order to protect a substantial ‘Judgment asset’.

He explains: “When one party is making a financial claim against another, the Court can obtain and enforce a judgment against some of the Defendant’s assets, such as a bank account or property.  This sometimes prompts the Defendant to try to move their assets out of reach of the enforcement.  This might be by  transferring them to someone else, or moving funds to somewhere that they are more difficult to trace. This is known as ‘dissipation of assets’. “

The purpose of a freezing injunction (and a freezing order, which is the official document obtained as the result of a successful injunction) is to prevent an opponent from dissipating assets in this way. Once described by a Judge as the “nuclear weapon” of litigation, freezing orders are a robust option where assets are at risk of dissipation.

The order prevents the “frozen” assets from being sold, or used in any way, until the Court makes a further order.  It can be applied to a variety of types of assets including bank accounts, shares and property. The strength of a freezing order lies in the fact that it often carries what is known as a “penal notice”. This means that, if the order is breached, the person who breaches it can face imprisonment, a fine or having their assets seized.

While freezing orders are common in matters such as international fraud, they are rarely seen in disputes concerning Norfolk-based clients.

However, a freezing injunction can be used in a wide range of circumstances but, in particular, to protect a substantial asset from being sold, encumbered or put out of reach of someone seeking to get judgment against it.   While freezing injunctions are typically associated with companies, they can also be used by individuals in all manner of disputes.

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In the current case, the injunction was obtained in the High Court against the other party’s main asset which we were concerned was about to be put out of our client’s reach. The freezing injunction will continue to “bite” until Judgment in the main case is handed down or further order of the Court. Our clients can therefore proceed with the litigation knowing that if they are successful, there will be an asset against which to enforce at a later date.

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Joshua concludes: “There are potentially more disputes locally in which a freezing injunction could usefully be considered and obtained and clients should be aware that this is a service that can be obtained locally.”

For more information contact Joshua Shuardson-Hipkin or David Osborne on 01553 666 600.

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances.  Fraser Dawbarns LLP are always happy to provide such advice.