Introduction

A freezing injunction (formerly a Mareva injunction) is a powerful remedy in English law, preventing a defendant from disposing of assets before a court judgment is enforced. It is commonly used in fraud cases, contractual disputes, and asset recovery claims.

Given the strict legal requirements set out in UK case law and the Civil Procedure Rules (CPR 25.1(1)(f)), claimants must act swiftly and provide compelling evidence to convince the court. This article outlines the key warning signs that justify seeking a freezing order in the UK and the steps to secure one successfully.

Key Signs That a Freezing Injunction May Be Needed

1. Risk of Asset Dissipation

• To obtain a freezing injunction, the claimant must demonstrate a real risk that the defendant will dissipate assets to frustrate a future judgment. The following are strong indicators:
• Sudden asset transfers to offshore accounts or related parties.
• Unexplained liquidation of valuable assets, such as property, stocks, or business interests.
• Past history of evading debt enforcement or ignoring court orders

2. Evidence of Fraud or Dishonesty

UK courts are more likely to grant freezing injunctions in cases involving fraud or serious misconduct. Signs include:

• False accounting practices or misrepresentation of financial records.
• Use of shell companies or nominee directors to hide beneficial ownership.
• Attempts to transfer assets for less than fair market value (suggesting concealment).

3. Offshore Structures and Hidden Assets

Defendants using complex offshore structures, trusts, or cryptocurrency transactions to move assets quickly may warrant urgent court intervention. Jurisdictions with weak disclosure rules—such as the BVI, Cayman Islands and Panama—are red flags.

4. Imminent Insolvency or Bankruptcy

If a defendant is on the verge of insolvency, a freezing injunction may be necessary to prevent asset stripping before a formal liquidation process begins.

How to Secure a Freezing Injunction in the UK

1. Meet the Legal Test for a Freezing Injunction

Under UK case law (Mareva Compania Naviera SA v International Bulkcarriers SA [1975]), the claimant must establish:

• A good arguable case – The claim must have a solid legal foundation.
• Real risk of asset dissipation – Evidence must show a likelihood of concealment or disposal.
• Balance of convenience – The order must not unfairly prejudice the defendant.

2. Act Quickly: Apply on a Without Notice Basis

Most freezing injunctions in the UK are sought without notice to prevent the defendant from transferring assets before the order is granted. Courts require an urgent, well-evidenced application with supporting affidavits.

3. Provide Full and Frank Disclosure

The claimant must disclose all relevant facts, even those unfavourable to their case. Failure to do so can result in the injunction being discharged.

4. Cross-Undertaking in Damages

UK courts require claimants to compensate the defendant if the injunction is later deemed unnecessary. This financial security reassures the court that the order is not being misused.

5. Ensure Effective Enforcement

A freezing injunction only succeeds if it can be enforced against assets. Claimants should:

• Identify bank accounts, real estate, shares, and crypto holdings subject to the injunction.
• Use Norwich Pharmacal Orders to uncover hidden assets.
• Consider worldwide freezing orders (WFOs) if assets are held in multiple jurisdictions.

Conclusion

A UK freezing injunction is a critical remedy for preventing the dissipation of assets pre or post judgment. By acting swiftly, presenting strong evidence, and complying with court rules, claimants can maximise their chances of success.

How we can help?

Should you be looking for advice in respect of obtaining or defending a freezing injunction in the UK our dispute resolution department has significant expertise handling this area of law.

Contact us for a free, no obligation initial discussion on 020 3440 8000 or email adam.haffenden@tvedwards.com

Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.