Injunctions and freezing orders are a fairly well-known legal concept among the public, and many business owners will have heard of them. However, at Three Graces Legal we have found that while our clients are aware that these legal remedies exist, they are less clear on exactly how they work. It is important to understand because, in the unfortunate event that your business does have to enter into litigation, injunctions and freezing orders can be both a great help and a serious blow.
What is an injunction?
An injunction is a court order which prevents the party it is made against from doing something. For example, an injunction may be sought to prevent a business from selling a certain product if it is believed that the product is being sold in breach of intellectual property. Injunctions can be used as a remedy in themselves, or they can act as interim measures while the court is deciding whether the action the injunction prohibits can be legally allowed to continue.
What is a freezing order?
A freezing order is a type of injunction which prevents the party it is being used against from accessing or disposing of certain specified assets, for example money in a bank account. In business litigation, a freezing order is typically used to prevent the other side from disposing of assets it could use to pay off its legal liabilities if it loses the case. Freezing orders are usually temporary and will not be granted over assets which are worth more than the value of the claim being made.
What are the consequences of breaching an injunction?
If you or your business breaches an injunction, this is considered contempt of court which can be punishable by fine or imprisonment for the owners and/or managing directors of a business.
Is it legal for another party to obtain an injunction against my business without warning me?
Unfortunately, yes. An injunction or freezing order can be granted at a ‘without notice’ hearing, which means that the party the order is made against is not told about the hearing and is not in attendance. This is to prevent a party from performing the prohibited act before it becomes illegal for them to do so. However, all parties are always then invited to a second hearing soon after the first, at which it is possible to challenge an injunction or freezing order.
Can I claim damages if an injunction is unfairly imposed on my business?
Yes, and the applicant will have to give a legally binding promise that they are willing and able to pay these damages when they are granted the injunction in the first place.
Contact our Business and Commercial Solicitors in Liverpool, Wirral and Merseyside Today
Whether you are considering seeking an injunction or freezing order or need to challenge one made against you, our dedicated and knowledgeable legal team can help. For free initial advice call us today on 0151 659 1070 or get in touch via our online enquiry form.