What is a Freezing Injunction?

Freezing injunctions are often sought in cases involving a risk of dissipation or the dissipation of assets. Obtaining an injunction plays a crucial role in preventing parties from disposing of their assets pending legal proceedings.

A worldwide freezing order can be used to prevent a party from dealing with or disposing of their assets worldwide. This type of order is often sought in cases where there is a concern that a party may attempt to move or hide assets to avoid the enforcement of a potential judgment.

In order to obtain a freezing injunction, the claimant must convince the court that there is a real risk that the respondent will dispose of their assets to frustrate the enforcement of a potential judgment.

Establishing this risk is crucial, and freezing order applications often depend upon presenting a compelling case demonstrating the urgency and necessity of such an order.

Freezing orders are typically granted on an interim basis pending a return date, where the court reviews the case more comprehensively. At the return date, the court considers the balance of convenience, weighing the interests of both parties. This evaluation is crucial in determining whether the freezing order should be continued, varied, or discharged.

While the primary focus of freezing injunctions is often on preserving assets, the court also considers the living costs of the respondent. Striking a balance between protecting the claimant’s interests and ensuring the respondent’s ability to meet their essential living expenses is an essential aspect of the court’s considerations.

The pursuit or defence of such injunctions involves a complex legal landscape with significant implications, including the recovery of legal costs.

Freezing injunction legal costs

Obtaining or defending a freezing order involves various costs that can fluctuate based on the specific actions required. The primary costs associated with applying for a freezing order include:

1. Solicitors/Counsel’s Fees: The process of obtaining a freezing order is intricate, requiring substantial work within a tight timeframe, especially in cases involving suspected dishonesty or fraud. The costs will depend on factors, such as the documents to be reviewed, whether the order is sought globally, and the size of the claim. Counsel’s fees cover tasks such as preparing a skeleton argument, attending court, and presenting the necessary evidence and legal arguments.
2. Court Fees: The application fee for a freezing order in court is £100. It’s important to note that the freezing order is not a standalone order. When applying for an order, the claimant must also initiate their legal claim against the defendant, incurring additional court fees. The fee for issuing the claim depends on the value of the damages claim, and in substantial claims, it can amount to as much as £10,000.

For those facing the need to defend a freezing injunction, the following options are available:

1. Continuation Agreement: The defendant can agree to continue the order until the claimant’s case is determined at trial or until the court issues a further order. This option is often the most cost-effective.
2. Attempt to Vary the Order: The defendant may seek to vary the terms of the order, but this requires legal assistance to persuade the court regarding the necessity for changes.
3. Full Discharge of the Order: If there are grounds to fully discharge the order, the defendant can provide detailed evidence to support this, and legal counsel can present this evidence at a contested hearing. The associated costs will vary depending on the level of assistance sought. Importantly, the order allows the defendant to incur reasonable legal costs in dealing with the claimant’s case.

One of the main components of freezing injunction applications is the requirement for full and frank disclosure. Claimants must present all material facts to the court, even those that may be unfavourable to their case. Failure to provide complete and accurate information may result in adverse consequences, including the discharge of the freezing order and potential liability for legal costs.

Recovering freezing injunction legal costs

Claimants seeking a freezing injunction are usually required to provide a cross undertaking in damages. This undertaking serves as security for the respondent, compensating them for any losses suffered as a result of the freezing order if it is later deemed unjustified. The quantum of the cross undertaking is a factor that the court considers in the broader context of legal costs.

Furthermore, if a defendant successfully defends or varies a freezing order, the court has the discretion to make a costs order in favour of the defendant.

The court may consider various factors in exercising its discretion, including the conduct of the parties, the reasonableness of their positions, and the overall circumstances of the case.

If the court determines that the claimant’s application for the freezing order was unjustified or improperly made, it may order the claimant to pay the defendant’s legal costs.

If legal costs are granted by the court, the receiving party will be required to recover their costs using the process of Detailed Assessment. A Bill of Costs should be drafted and served upon the paying party alongside a Notice of Commencement to start the process.

The paying party can contest and negotiate the costs listed within the Bill by serving Points of Dispute. The receiving party may wish to further negotiate using Replies to Points of Dispute. If an agreement cannot be reached using this process, the receiving party will be required to make an application to the court to have the Bill of Costs assessed at a Detailed Assessment Hearing.

How can ARC Costs assist?

ARC Costs can assist will all aspects of claiming or defending freezing injunction legal costs.

ARC Costs are a team of independent and experienced Costs Draftsmen and Costs Lawyers who regularly assist you in the recovery/contention of costs.

Whether you are the Paying Party or the Receiving Party, we hold vast experience in dealing with costs matters on both sides.

We can assist in fixed recoverable costs cases and cases where costs are awarded on the standard basis, including the preparation/challenging of Bills of Costs, conducting of detailed assessment proceedings, and the preparation of Points of Dispute/Reply.

Should you require our assistance or have any further queries regarding costs, please contact us on 01204 397 302 or email one of the team at info@arccosts.co.uk. Alternatively, please complete our online enquiry form, and we will contact you to discuss your query or speak to our staff using the live chat function.

If you would like to issue or defend a freezing injunction ARC Costs also maintain an extensive legal network of expert Solicitors in this area, and we would be happy to pass on your details to assist in recovering your outstanding debts. 

We may receive payments from third party solicitors on our panel to whom we may refer your claim. We will never charge you for any referrals made to our panel of third parties.