Tuesday, 26 May 2015

The Obligations Of The Applicant After A Freezing Order Is Obtained

After a Freezing Order is granted at the first hearing, the Applicant is under certain obligations moving forward. These are as follows:
  1. In the granting of a Freezing Order, the Applicant will give undertakings to the Court with regards to service of the Order, Application Notice and supporting evidence upon the Respondent. If an Applicant fails to do this, the Freezing Order may be discharged and the Applicant may face a potentially significant adverse Costs Order against it.
  2. An Applicant is also obliged to issue an Application Notice for continuation of the Freezing Order in advance of the Return Date and the full hearing. This needs to be done immediately after the granting of the Freezing Injunction and be included in the papers to be served on a Respondent.
  3. The Applicant is also under an obligation to pursue the underlying substantive claim as reasonably quickly as possibleFailure to do this can lead to the Freezing Order being discharged.
Other practical steps the Applicant should consider as part of the Freezing Order process
Service on third parties
Practically speaking, the Applicant then needs to consider which third parties should be notified of the Freezing Order in order to protect its interests as best as possible. These would include, for example, banks and/or other financial institutions with whom accounts are held, the Land Registry (in the event that there are any property interests which are affected by the terms of the Order) and any other relevant third party.
Disclosure obligations
The Applicant is also under a duty of ongoing disclosure. What this means is that if documents relevant to the case come into its possession after the granting of a Freezing Order, especially where they render the information which the Applicant relied upon at the original hearing incorrect, then, this has to be notified to the Court and the Defendant informed as a matter of urgency. This can occasionally be the case in circumstances where the underlying issues had not been fully explored by the time of the original Freezing Order hearing because of the limited time available to the Applicant to make the application.
Changes in financial standing
If an Applicants financial standing was to change materially, then this also needs to be notified to the Court and the Respondent. This is important as the Applicant provides an undertaking in damages at the outset of any application and the granting of a Freezing Order places an additional burden on the Applicant and it must be able to meet that undertaking in damages should it later transpire that the Freezing Injunction should not have been granted.
General review of the order
On an ongoing basis, an Applicant should keep the terms of the Freezing Order under review. For example, if the quantum of the Applicants claim was to materially change, then the Freezing Order should be amended to reflect this.
Should you require any further assistance at all in this area of the law, please contact one of our fraud specialists on 020 7841 0390 and we will be happy to have a free consultation with you.