FREEZING ORDERS IMPORTANT PRE APPLICATION CONSIDERATIONS PART 3
What benefits will actually accrue from the Freezing Order?
Consideration needs to be given to the benefits which will actually accrue as a result of obtaining a Freezing Order. Often, Applicants who are the subject of fraud require their legal advisers to “throw the kitchen sink” at the wrongdoers without thinking of the longer term implications, both in terms of costs and the benefit of taking that course of action. Consideration needs to be given to other types of remedies available to litigants before determining whether to progress down the route of a Freezing Order.
Will the Freezing Order actually stop a person dissipating his assets?
Some Respondents may simply act in contravention of the order in any event. Whilst this could lead to their imprisonment, the primary purpose of getting such an order is to preserve assets. It is therefore worth considering whether it is likely the Freezing Orderwill have the desired effect in respect of the wrongdoers concerned.
It is often the case the Applicant is simply unaware of what assets there are of the Defendant and whether the reality is that the Defendant may simply carry on and deal with those assets regardless of obtaining a Freezing Order.
Policing the Order
The Applicant must be willing to pursue and enforce the Order if necessary with court applications relating to disclosure, cross-examination, the possible appointment of a receiver, delivery-up orders, search orders and/or proceedings for contempt of Court.
Whilst these are all remedies available to an Applicant, they can incur yet further legal costs and again, this is something which the Applicant needs to be advised of carefully at the outset. It is not the case that an Applicant can simply sit on a Freezing Order once granted. Ongoing work needs to be carried out in respect of compliance and enforcement of the Freezing Order for it to have the maximum effect.
Applications by the Respondent to vary or discharge the Freezing Order
Applicants need to be aware of the fact that Respondents may seek to discharge or vary the Freezing Order once they have had time to take stock and prepare for the Return Date hearing. These applications, if fully contested, can become very costly and can in some instances can run for many days.
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.