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An Overview of Freezing Orders

Thursday, 1 October 2015

It can be incredibly frustrating for a claimant to spend a lengthy amount of time locked in a legal battle to chase a claim and to be successful in that battle only to then discover that the defendant has arranged their assets in such a way  that they can no longer be recovered.

A Freezing Order (previously known as a Mareva Injunction) can be used in court to prevent a defending party from disposing or handling their assets to frustrate the claimant’s recovery of said assets.

History of Freezing Orders
In the mid-1970’s a major decision by the English Court of Appeal made it possible to prevent a defendant from re-arranging their assets to avoid settling a claim. “Mavera Compania Naviera S.A. vs. International Bulk Carriers S.A.’ in 1975 set a precedent for the courts which means they are now able to prevent a party from disposing of their assets prior to a final judgement being made for example by disposing of their assets in overseas accounts.

Requirements of a Freezing Order
However, there are specific requirements that need to be met for a Freezing Order to be enforceable. Freezing Orders are usually only enforceable in England and Wales, so the case must not originate from or take place outside of these countries. The defendant must also hold those assets in this jurisdiction. They must be of a sufficient amount to meet the claim and there must be a reasonable amount of risk of the defendant disposing of or using the assets.

When seeking a Freezing Order it would be unusual to serve notice as this would only inform the defendant of the claimant’s intentions to freeze their assets and therefore potentially give them chance to disperse them. A Freezing Order can be sought at any time during legal proceedings dependant on the needs and fears of the defending party.

The first step would be for an experienced solicitor to apply to the necessary court for the Freezing Order. The court will then determine if the Freezing Order should be granted and if so for what period of time. A Freezing Order might be granted for a short period of time until a further hearing when the defending party can be in attendance and provide any counter-arguments to the need for a Freezing Order.

Rollingsons Solicitors has extensive experience in Freezing Orders and the recovery of commercial debt and can provide a comprehensive and efficient service. To find out more click here or call us on 020 7611 4848 to arrange a complimentary consultation.

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