Injunctions – what are they and why use them?

Injunctions are court orders which force an organisation or person to either do something (a mandatory injunction), or to stop doing something (prohibitory injunction), with immediate effect. Breaching an injunction is considered a ‘contempt of court’ and may lead to punishment by imprisonment, so injunctions are not to be taken lightly.

They can be applied in a wide range of different circumstances, from commercial or property disputes through to preventing people from disclosing private or confidential information.

In this blog, we look at the use of injunctions in relation to commercial assets, although they are perhaps better known by most of the general public in relation to their use when difficult family law issues arise.

Why should I obtain an injunction?

Injunctions are effective when you are trying to protect your rights or assets. Situations where you may consider obtaining an injunction include:

• Preventing someone else from selling, moving or destroying your property or assets
• Prohibiting someone from transferring assets abroad or taking them beyond the reach of the UK legal system (‘jurisdiction’)
• Enforcing existing contractual obligations
• Prohibiting nuisance
• Preventing disclosure of private or confidential information – this is often referred to as a ‘gagging order’.

A practical example of this might be where there is a debt dispute and you discover that the other party is attempting to sell their assets and buy a property abroad. In this event, if you win your court case, you may find that you cannot claim the debt back as the other side no longer has any assets within the jurisdiction that can be accessed to meet the debt. You would therefore want to obtain a prohibitory injunction, to put an immediate stop to these plans.

Obtaining legal advice as soon as an issue of this sort is identified may be key to nipping it in the bud. A specialist dispute resolution solicitor will also be able to advise on whether an injunction is the most suitable action to take in your particular circumstances.

When can an injunction be obtained?

An injunction can be applied for in any stage of legal proceedings, or sometimes even before a commercial claim has been issued. Injunctions applied for before a trial are called ‘interlocutory’ or ‘interim’ injunctions. The injunction will remain in effect until a trial takes place or for a period set by the court.

Obtaining an injunction can be a matter of urgency if reputation, assets or business/personal interests are at stake.

Obtaining an injunction

There are two approaches to obtaining an injunction.

• The more common and standard application is an “on notice” injunction. This gives notice to the party whom the injunction is sought against, allowing them to prepare and present their case alongside your submission before a judge.
• The other type of injunction is a “without notice” injunction, or ex parte This application does not notify the other party of the application, because there is perceived to be a serious risk of the other side dissipating or destroying the relevant item if they were given advance warning.

If an injunction is granted, the court will fix a date for a follow-up hearing where both parties come before the judge and plead their case (known as the ‘return date’).

Obtaining an injunction should only be considered where there is a serious and reasonable risk of the other party dissipating or destroying assets. This is mainly because if the injunction is later deemed not to have been necessary, there will be cost implications for the party who brought it.  It should be noted that after a trial, whichever party wins will usually be entitled to claim some costs back.

There are hoops to jump through in order to obtain an injunction. You must:

• Show that the court has jurisdiction to hear the application
• Present to the court that it would be just and convenient to grant the injunction
• Show that due to the nature of the dispute, damages would not be a satisfactory remedy.

Our dispute resolution specialists can explain how this would apply in your particular circumstances.

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To contact a member of our team, you can fill in our online enquiry form, email info@fraserdawbarns.com, or call your nearest office below. If you’d like to speak to a member of our team at one of our offices across Norfolk and Cambridgeshire, visit our offices page.

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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 is always happy to provide such advice.