My company has been served with an injunction

An injunction is a court order and can be granted as either an interim or interlocutory order (which is granted pending another hearing or the full trial) or final remedy. There are two types of injunction:
•    Mandatory, which means that the party specified in the order has to do a certain act
•    Prohibitory, which means that the party must refrain from doing a certain act
 

Vardags are highly experienced in dealing with all matters relating to company injunctions. Vardags offer strategic and geared advice to ensure the best and most suitable outcome for you and your business. We understand that your time is precious and will take all reasonable steps to ensure that your management time in dealing with your matter is used in the most efficient and effective way.

We offer a free consultation to qualifying individuals. Please call our confidential enquiry line on 020 7404 9390 or email us. Lines are staffed 24 hours.

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There is a wide range of injunctive orders that can be granted from the court. Injunctions are draconian in nature and so there are stringent rules that need to be followed before they are granted. Injunctions are used for a variety of reasons, including:
•    Protection or preservation of assets
•    Safeguarding of business interests, including intellectual property rights
•    Protecting a company’s reputation 
•    Shareholder disputes
•    Employment disputes such as breaches of restrictive covenants and prevent unlawful competition by former employees, known as springboard relief 
•    Protection of trade secrets and company data
There are a range of orders that can be granted that:
•    Restrict how assets are used, known as freezing injunctions 
•    Allow the claimant to search and seize items on a person’s property
•    Require the respondent to give details of the location of an asset
•    Require that property is delivered to the claimant
•    Require the respondent to reveal the location of property or assets
•    Are used in relation to insolvency law
Applicants need to make various undertakings before they will be granted an injunction that recognise their onerous nature. The main undertakings are:
•    Full and frank disclosure in relation to the information given to support the application for the injunction
•    An undertaking in damages in case it is discovered at a later date that the injunction should not have been granted
 

The applicant is able to apply for the injunction:
•    On notice- which means that the other side will be notified about the application hearing
•    Without notice- which means that the other side is not notified about the hearing and cannot be present. The applicant will need to present very strong reasons why this should be granted
 

These used to be known as Mareva Injunctions and they prevent a party from disposing of assets or dealing with them in any way including hiding them or diminishing their value. The purpose of this order is to protect the assets until the case is finalised. The order has to state the maximum assets that are covered by the freezing order- it cannot be open-ended. These orders also generally only cover assets located in the England and Wales.
These injunctions can be used by claimants that are arguing that the respondent has property in their possession that belongs to the claimant or where the claimant is concerned that the respondent will dispose of assets in order to frustrate any money judgment.
Freezing injunctions are usually made without notice, since the element of surprise is usually needed to ensure that they are successful. The order takes effect as soon as it is granted and not just when it is served on the respondent.
A freezing injunction will affect respondents in the following way:
•    Access to their bank accounts can be restricted
•    There is often a requirement to disclose and fully detail assets to the claimant within hours of the order being granted
•    Day-to-day business transactions become a lot harder to complete for the respondent
A respondent is able to refuse to provide any information if it is likely to incriminate them in relation to a crime. However, it is advisable that you take legal advice before doing this to ensure it is the right approach.
 

It is possible to apply for an injunction once court proceedings have commenced or before they have started in cases where it is in the interest of justice to do so, for example because evidence may be destroyed or funds dissipated. The court has to decide that it would be just and reasonable to grant the injunction. The granting of injunctions is discretionary and will depend on the individual facts of each case. The following must be proved before an injunction will be granted:
•    That there is a substantive cause of action
•    The respondent is threatening to act in such a way as to affect your rights
•    It is just and reasonable to grant the injunction and the actions of the applicant does not affect this
•    Damages are not an appropriate remedy for the substantive issue. 
 

This is taken very seriously by the courts and breaches of injunctions can result in being found guilty of contempt of court that can result in various penalties including a fine, imprisonment or the confiscation of assets.

If you are served with an injunction then it is vitally important that you follow whatever is stated in the order, but also get immediate legal advice on your case and what route should be followed. 
These orders can be incredibly lengthy with reams of evidence attached. Ensuring that you have expert legal advice straight away can ensure the best outcome in your circumstances. Your lawyer will determine whether the claimant has complied with all the requirements that are necessary to obtain such an order and that they made full disclosure to the court. If this was not done, then you may have the right to receive damages. Having strong legal representation will also ensure that your rights are protected and that the claimant does not act outside of the remit of the order in a manner that it unreasonable or oppressive. 
Other issues that should be considered is whether the injunction will lead to a serious loss that means that the respondent is no longer able to trade or if the injunction is being used purely to detrimentally affect the respondent’s business.
The order cannot prevent the respondent from being able to pay for ordinary living as well as business expenses so that the business can continue to operate. This will be allowed under the order, though often the provision is not enough and further applications to the claimant need to be made. 
The claimant will be given a return date to go to court to ask for the injunction to be continued. This is usually after a short period of time such as a week. This hearing allows the respondent the opportunity to ask for the order to be varied or discharged. Depending on the complexity of the case, it may be that this cannot be done at the first return date and this is why expert legal advice is needed to ensure you follow the best approach.


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