How Can I Get a Freezing Order?

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If your business is owed a debt and you’re concerned that your debtor or debtor company can sell or dispose of assets rather than pay what is due, they may apply to the court for a freezing order. However, you must understand that the Courts do not grant these lightly, of course, as they interfere with the basic right of any individual or company to sell their assets as they see fit.

What Is a Freezing Order?

A freezing order (formerly known as Mareva injunctions) is an interim measure granted by a court to prevent a person from being able to dispose of or deal with their assets before a judgment has been enforced.

What Can Be Frozen?

Almost any asset, including company bank accounts, property, land, investments, and shares, can be frozen under the freezing order.

The freezing order will not prevent the corporation or individual from borrowing money, and if they do so after the order is issued, the borrowed funds will not be considered an asset.

When a freezing order is granted by the court it is endorsed with a penal notice in case a respondent does not comply, it will be contempt of court and face a fine.

What are the Requirements for a Freezing Order?

The applicant must have a strong case. The applicant must establish that its case is capable of a serious argument.
There must be a substantive cause of action against the defendant
The applicant must demonstrate the risk of the asset being disposed of if the order is not put into place.
It must be ‘just and convenient to grant the order – it would cause unnecessary and disproportionate hardship to the defendant to grant the order.

In order to obtain the injunction, the following forms will need to be prepared |

These forms will be best prepared with support from a legal advisor.

Application Notice

A draft Order – which will set out the terms for the freezing Order.

Ancillary Orders (only sometimes needed) – this may include an order for cross-examination, delivery of passport, or order for a company receiver.

When preparing evidence to support an application the following should be considered |

How quickly the assets in question could be disposed of.
The financial standing of the defendant in relation to the relative value of the claim.
Whether the defendant operates a business and the reputability of the business. The more longstanding a business is the less likely that a defendant would attempt to dispose of the business.
Where the defendant or any business they have is based. If the defendant is domiciled abroad there is a higher risk of dissipation. The particular country in which the defendant is situated may also affect the risk due to varying tax and company laws between various companies.
The defendant’s behaviour. Evidence of threats dissipate poor commercial morality or refusing requests for disclosure, or a settlement discussion may help establish evidence of a threat to dissipate.

What must the applicant provide?

If it is determined that the freezing order should not have been granted, the applicant must provide full disclosure of all relevant material as well as an undertaking in damages to pay the respondent. The applicant may be asked to furnish security in specific instances.

To allow the court to properly use its discretion, the applicant must submit all facts and information to the court. These facts include everything that could harm the applicant’s case, the length of the dispute, and facts that the applicant or their counsel were unaware of but could have learned if they made reasonable inquiries.

How long does a Freezing Order Last?

In most cases, freezing orders are given for a period of 7 to 14 days. The court will reconvene once the order has expired to decide whether to extend, discharge, or continue the order until the trial.

How much does a Freezing Order Cost?

Applicants for a freezing order should be aware that the process might take a long time, both in terms of legal fees and the time required of firm employees. Third-party costs, such as those incurred by banks, may also be borne by applicants.

Because they are secured before a trial, the applicant should be aware that injunctions are only given if the applicant agrees to a cross-undertaking in damages, which means they will reimburse the defendant for any losses if the injunction is found to have been obtained incorrectly.

As a result, legal fees may be substantial, and they rank as the most major potential disadvantage of taking this course of action.

Summing -up

Shergroup is a leading enforcement agency based out in the UK. We also have a legal company by the name of Sherwins Ltd that looks into the legal aspects of enforcement and our other services from our client’s perspective.

We have been actively supporting businesses, government organisations and individuals with high-quality legal advice.

Our prosecutors are proficient at advising on prospective methods and at finding the evidence required to prove a fraud conviction, as well as ensuring that whatever evidence is provided is admissible in any later criminal trials. Hiring Shergroup’s legal team that comprises experienced solicitors will provide you with a first-class and comprehensive legal service to help you get justice.

So, whether you need to get a freezing order against your debtor or you to want a piece of legal advice about your case or want us to enforce your court order, feel free to get in touch with us. We’d be glad to help you through it.