Notification Injunctions - An Alternative to a Freezing Order?


The English High Court has recently confirmed that its wide powers to grant injunctions include the granting of "Notification Injunctions". A Notification Injunction requires a Defendant to give advanced notice to a Claimant if the Defendant intends to dispose of assets over a certain value threshold. It provides similar protection to an Order freezing the Defendant's assets but imposes less of a burden on the Claimant, conceivably increasing the Court's willingness to grant such an injunction. 

Notification Injunctions

International parties who are regularly involved in large transactions, which often involve cross-border issues and multiple parties from multiple jurisdictions, are likely to be aware of the possibility of obtaining a Worldwide Freezing Order. Such an Order is generally available in circumstances where a dispute arises and there is a risk that the other party may dispose of assets in order to avoid enforcement of a judgment against them.

Because of the nature of a Freezing Order, the Courts have described them as a "nuclear" weapon of the law, and therefore the Courts set a high evidential threshold before it will exercise its discretion to grant such an Order. Helpfully, the Courts have acknowledged that a Notification Injunction is "plainly a less invasive interference with the defendant's rights".

While in practice the Courts are likely to remain faithful to the underlying principles governing the granting of a Freezing Order, the recent confirmation of the availability of a Notification Order as a "less invasive interference" may see a trend towards the Court adopting an approach that reflects its less draconian nature. Therefore a Notification Injunction should be considered as an alternative to a Freezing Order in circumstances where it offers suitable protection or there is doubt as to whether a Court would grant an Freezing Order on the evidence available.

For more information please contact Liam Tolen from the Dispute Resolution Team.

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