An interim injunction is an interim remedy whereby the court compels or restricts a party from doing something for a specified period of time. An interim remedy is usually dealt with at the beginning of a claim or before proceedings are issued and continues until a further order of the court i.e. once the court has dealt with the case fully. Therefore, an interim injunction does not preclude the applicant’s ability to obtain damages or a final injunction by the courts at a future judgment.

Before exploring why an interim injunction might be a suitable interim order, it is worth explaining the legal test the courts will apply when deciding whether to grant an interim injunction and the different types of injunctions available. Any interim injunction is intended to ‘hold the ring’ pending the full trial of the issues in dispute.  The legal test is:

1. Whether there is a serious question to be tried – that being there is a legal issue to be addressed; and
2. Damages alone would not be a suitable remedy for the applicant – meaning the ‘balance of convenience’ lies with the applicant and an award of damages would not be suitable ‘justice’ for the applicant.

The court will also consider the timing of the application with specific regard to whether it was made promptly and without unnecessary delay.

There are three main types of injunctions:

• Prohibitory injunctions – to stop a party from doing something.

• Mandatory injunctions – to compel a party to do something.

• Freezing injunctions – to freeze a party’s assets.

There are many different reasons an interim injunction might be sought after, I have expressed a few examples under the below subheadings.

Property boundary disputes

An interim prohibitory injunction can be sought to prevent a party from tampering with or moving a boundary structure during the course of proceedings where the boundary structure is the subject matter of the dispute. This would ensure ‘self-help’ remedies are not pursued when the dispute has reached the depths of litigation – note that the claim itself might be for a final mandatory injunction (as well as damages) in which the court can order the relocation of a boundary structure at its discretion, however the interim remedy is useful during proceedings to halt any tampering with the boundary during litigation.

Disputed estates

In claims relating to a disputed estate, the applicant may wish to prevent the executors from administering or distributing the estate until the dispute is resolved. This might be the case where entitlement to an asset of the deceased’s is contested or in a s.50 (Administration of Justice Act 1985) application, the applicant might wish to prevent an executor administering the estate until the court has made an order to replace them or dismissed the claim. This would help to ensure the problematic executor does not carry on the conduct that has led to the dispute in the first place.

Freezing injunctions

To protect the assets fundamental to the claim

If there are concerns of a party disposing the assets that are the subject of the dispute in the claim, an applicant may seek a freezing injunction to ensure there is still a claim worth pursuing. For example, in the event the defendant has obtained an asset by fraud or there is a tracing claim, it would be a good idea to freeze the asset to prevent the defendant from disposing it and jeopardising the claim.

This is known more specifically as a Proprietary Freezing Injunction and can be used against ‘property’ that is in the defendant’s possession but belongs to the claimant. Note that ‘property’ can be widely interpreted to mean anything from tangible property to bank accounts and loan drawdowns*. It is also possible to obtain a global freezing order but this is a discussion for another.

To freeze the respondent’s assets to ensure they do not evade enforcement of judgment

The same principle applies when a party has obtained judgement for damages, and the losing party (the Judgment Debtor) is not paying the damages. In such case the successful party (Judgment Creditor), might commence enforcement of judgment payments. To facilitate this it could be desirable to briefly freeze the Judgment Debtor’s assets to ensure they are not moved to prevent the Judgment Creditor from enforcing judgement.

Preventing a breach of contract

A common purpose for an interim prohibitory injunction is to prevent a breach of contract in order to prevent further detriment being caused to the applicant for the duration of the legal proceedings. This same principle has been extended to non-disclosure agreements** where the court can enforce the terms of the non-disclosure agreement associated with the dispute to protect the confidentiality of sensitive information.

Other considerations

It is also worth having the following in mind when considering whether to make application for an interim injunction.

Cross undertakings in damages and risk of costs

When granting an interim injunction, the courts will very likely require a cross-undertaking in damages from the applicant. This is an agreement given by the applicant to the court that they will pay damages to remedy any detriment the other party suffers should the injunction subsequently be deemed unnecessary or the applicant loses the claim entirely.

The prospect of a cross-undertaking should be carefully considered before making an injunction application. The convenience of the injunction should be necessary for justice in order to justify the application in the first place and the risk of having to pay damages to the other side as a result of the undertaking.  The court will normally also require some evidence that the applicant could afford to pay damages if the injunction was later overturned and the undertaking enforced.

Only obtain injunctions against a party to the proceedings

It should also be noted that an injunction can only (in most cases) be obtained against a party to the proceedings.

There are specific exceptions to this rule in cases of freezing injunctions and if satisfied the court can grant an interim freezing injunction against a third party – however this can be discussed in a later blog.

Notice requirements for an injunction

There is a 3 day notice requirement for an interim injunction. If a hearing is required, both parties will be able to put forward arguments for/against the injunction application at this hearing. It is possible to submit an application without notice (commonly for freezing injunctions), however, at a without notice injunction hearing, the one party who is present has to fully, fairly, and accurately put forward arguments for both sides of the case.

A final word on costs

Being mindful of costs is important when deciding whether to make an interim injunction application. Keep in mind that an injunction effectively takes away the other party’s liberty as it restricts them from or forces them to do something. This creates a high bar to be satisfied for the court to consider granting an injunction and as such lodging an application will incur legal costs (sometimes quite extensive). Legal fees will accrue because of the requirement for specific witness statements and other advice coincidental to the application, as well as the added cost of the injunction hearing and associated court fees.

Not only will the applicant need to bear these costs, but so will the respondent. The general rule regarding costs is that the losing party will be liable to pay for the successful party’s legal costs and so if the application is unsuccessful, the applicant is likely to be ordered to pay the other party’s legal costs in relation to the interim injunction as well as its own costs. Although costs are no way part of the legal test for an interim injunction, a client should always be advised on the litigation risks surrounding costs of an interim injunction.

This blog has been a basic introduction to interim injunctions. If you would like further information or have an issue surrounding interim injunctions in legal proceedings, please contact Toby Walker by email or on 01494 893512.