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An injunction is an urgent and immediate court order that prevents a person or a company from committing a particular act or compels them to take a specific and defined action. If you’re seeking an injunction in a commercial, construction, or property dispute, time is of the essence.
By definition, an injunction is only effective if it is issued before the event and worst case actually occurs.
An injunction can be an indispensable tool to preserve the status quo or current position in commercial, property and construction litigation and/or company shareholder/director/investor-related disputes.
Helix Law’s expert litigation team specialises in obtaining injunctions in commercial disputes. We don’t advise individuals on injunctions for issues like harassment unless it’s within a larger commercial dispute.
Injunctions can be an important urgent tool to protect the position on the ground during a dispute and to prevent a situation from worsening.
An Injunction can take many forms, including:
- Freezing assets- money or property so they are held pending ;
- Preventing further loss/damage or harm to a company, shareholders or investors;
- Stopping works to prevent a wall from falling down or some other disastrous outcome.
With the right legal advice, injunctions can be obtained quickly. Injunctions can be incredibly powerful tools at our disposal to assist you in preventing your situation from worsening. Tactically obtaining an injunction can also help you negotiate the most favourable outcome in a dispute.
In one case, Helix Law obtained an injunction preventing banks from processing transactions or distributing monies from accounts tied to a commercial dispute on the same day we were instructed.
If you’re a director or decision-maker in a commercial, construction, or property dispute that needs to protect the status quo, an injunction can be an invaluable tool.
Our experienced commercial, property, and construction solicitors will gladly advise you further.
If you need an injunction urgently, contact Helix Law immediately. 98% of potential clients hear back from us in less than an hour.
What Is an Injunction?
An injunction is a court order which compels a party to do or not do something.
There are two subcategories.
Where an injunction requires someone to do something, that is called a Mandatory Injunction.
If the order prohibits the party from doing something, for instance, transferring money away from a company bank account, this is known as a Prohibitory Injunction.
An injunction can also be described as ‘interlocutory’ or an ‘interim’ order. This is because they are usually granted at an early stage in the court proceedings and are temporary.
Alternatively, an injunction can be final and granted at the end of the court proceedings or trial. These are not interlocutory or interim orders.
An injunction can have an expiry date. It can be as short as two weeks or expire at a point in time defined by the order’s wording. Or it can be a final injunction that is permanent unless subject to either challenge or review.
An injunction is also an equitable remedy. It is subject to the usual equitable rules, and the party applying for an injunction must demonstrate that they have a valid underlying claim against the defendant.
An injunction is always discretionary and the court is not obliged to grant one. Getting this type of application right is fundamentally important; do so and you can seek recovery of costs from an opponent putting them immediately on the back foot. Get it wrong (or delay) and you can lose the opportunity to create considerable leverage in your favour.
Types of Injunctions in England and Wales
Many different types of injunctions are used in a commercial, property or business contexts, the areas of law in which we operate. We frequently use and apply for injunctions to preserve and protect assets, ultimately to preserve value, for our clients be they companies or shareholder investors.
A freezing injunction is a court order preventing a party from altering or disposing of relevant assets or property. It can be applied for at any stage in the proceedings. We often use these applications to prevent steps being taken or assets/monies being dissipated.
A freezing order can protect the applicant by ensuring a respondent does not transfer away or dissipate money, property, shares or other assets or documents. A freezing order can be made against shares, bank accounts, vehicles, land and property.
A search order facilitates the claimant’s representatives entering the premises of a party to copy or remove important documents and information. A search order preserves evidence that may be important in the action.
When considering the application for a search order, the court makes a distinction between obtaining evidence and preserving it. Search orders are common in intellectual property disputes and can also be used in fraud and breach of confidence claims to protect important documents.
The application for a search order must demonstrate a robust prima facie case and a legitimate possibility that the defendant may dispose of documents and material.
We often make injunction applications on a ‘without notice’ basis. This is where the reasons for the application are so urgent, there is insufficient time to allow the opponent/Defendant/respondent notice the hearing is even taking place.
Where we pursue without notice injunctions the typical process involves an immediate application and court hearing, usually in the high court, London.
A judge will consider the evidence and urgency and will consider making an immediate order on an interim (or temporary) basis. The application is then listed for a return date, being a date usually in a few working days to a week/couple of weeks. At the return date, the respondent has the opportunity, on notice, to consider the content of the application and evidence in support, and to argue (if they wish) whether the injunction should continue or not.
Interim Injunctions — What You Need To Know
An Interim Injunction is discretionary — meaning it is granted at the court’s discretion and is not granted as of right.
An application for an injunction can either be ‘ex parte’ or ‘inter partes’. An ex parte application is also known as a without notice application. Only the party seeking the injunction has the chance to present their case to the court, whereas inter partes means that both parties will present arguments for the court to decide on.
Before granting an interim injunction, the court will take into account numerous factors, including;
- Delay by the applicant,
- Whether it is possible to construct the injunction in clear enough terms so that it can be adequately implemented and enforced against the defendant if necessary,
- The behaviour of the claimant. This is often referred to as ‘clean hands’ and determines whether this party has acted illegally in connection with the claim or whether there is misconduct that could affect the claimant’s rights to obtain the injunction.
A landmark case lays down guidelines that the court should follow when deciding whether or not to grant an injunction.
The case is called American Cyanamid Co vs Ethicon Limited. The protocol has subsequently been known as The American Cyanamid Guidelines.
The American Cyanamid Guidelines include that the court will consider whether;
- Is there a serious issue to be tried? The claim must have substance and not be frivolous or vexatious,
- Would damages be an adequate remedy? The court first looks at this from the claimant’s viewpoint. It could be impossible to quantify loss, and the court may also consider the financial position of the respective parties. It can be hard to assess a potential award for damages if the impact of the injunction is to stop or stifle a new or fledgling business,
- Where does the balance of convenience lie? The court weighs up the possible outcomes for both parties based on the interim injunction being granted or denied. This varies from case to case and typically includes issues such as how long the interim injunction will remain in place before trial,
- Any other special factors.
The court will avoid looking at questions of disputed facts or matters of law at this stage.
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When Can You Seek an Injunction?
An interim injunction can be sought anytime — including before proceedings have begun or after judgment is given.
Typically, an application is made for an interim injunction shortly before, or shortly after, the claim has been issued and well before the trial.
Part of the court’s consideration of the application is the speed at which the application has been made. Delay, or undue delay, can be a factor that counts against the claimant applicant. It is important to show that there is a real urgency and a threat to business interests or legal rights.
What Steps Are Involved in Obtaining an Injunction?
With or Without Notice
The procedure for applying for an injunction depends on whether the application is being made with or without notice to the other party. Most applications for an interim injunction are made with notice to the respondent.
A ‘without notice’ application is made without the respondent having any notice of the application or being present at the application hearing. Such hearings are usually ex parte.
The court will only grant an order after a ‘without notice’ hearing if there are valid reasons for the respondent not to receive notice. For instance, if the matter is very urgent or if there is a likelihood that the responding party will dissipate assets before the hearing date.
Filing an Application with the Court
The applicant must file an application notice with the court stating the type of injunction the applicant is seeking, the reasons why, and the date, time and place of the hearing if there is one.
There should also be a claim form and evidence to support the application. This is usually given in the form of a witness statement or affidavits and a draft order. It is not common practice to have witnesses present in person to give evidence.
Cross Undertaking in Damages
The court may require a claimant to give an undertaking in damages to the person seeking the order if the application for an interim judgement is successful.
Cross undertaking holds the claimant liable for damages the respondent incurs from the injunction should the court later decide the injunction should not have been granted or should have been valid for a shorter period.
What are the criteria for obtaining an injunction?
The landmark case of American Cyanamid Co vs Ethicon Limited set out down the guidelines that the court should follow when deciding whether or not to grant an injunction. A protocol has subsequently developed known as The American Cyanamid Guidelines.
The American Cyanamid Guidelines include that the court will consider;
- whether there is a serious issue to be tried. The claim must have substance and not be frivolous or vexatious;
- whether damages are an adequate remedy. The court first looks at this from the claimant’s viewpoint. It might be impossible to quantify loss, and the court may also consider the financial position of the respective parties;
- where the balance of convenience lies. The court weighs up the possible outcomes for both parties based on the interim injunction being granted or denied. This varies from case to case and typically includes issues such as how long the interim injunction will remain in place before trial; and
- any other special factors.
The court will avoid looking at questions of disputed facts or matters of law at this stage and those are triable issues.
What is a springboard injunction?
A “springboard injunction” is a type of injunction used to neutralise the unfair start a former employee has gained from breaching a term of their employment contract or using confidential information, usually in the context of starting a competing business or in joining a competitor and diverting work and/or opportunities.
Springboard injunctions are aimed at levelling the playing field. Usually, this looks like prohibiting the former employee from further dealing with customers that he/she contacted using the confidential information. Springboard injunctions are usually limited for a certain period of time.
When might a springboard injunction need to be considered?
Many employees have access to confidential or trade secret type information and business contacts and contacts that they may be tempted to take and use unlawfully to set up in competition against their current employer. This can be very detrimental to the employer’s business. The courts recognise this and can be asked to grant a springboard injunction to stop the ex-employee immediately in their tracks to protect the business. Even the threat of legal proceedings of this kind is a serious deterrent.
What are the requirements to obtain a springboard injunction?
The American Cyanamid Guideline apply as above. Springboard injunctions are usually only granted pending a trial of the substantive issues; these are an immediate step to prevent harm and losses that might otherwise be irrecoverable if steps aren’t taken immediately.
You must be able to show:
- unlawful activity by the former employee (e.g. they have breached their contact or duty of fidelity);
- that the former employee gained an unfair competitive advantage over your business as a result (e.g. poached your customers or employees);
- that the competitive advantage is more than short term;
- that the advantage still exists at the date the springboard injunction is sought and will continue unless the former employee is stopped.
How can a springboard injunction help protect businesses?
A springboard injunction can protect businesses from an employee using the employer’s confidential information, trade secrets and business contacts to set up in competition against their current employer.
If you suspect a departing employee intends to compete using your confidential information or in other breach of their contract you should immediately obtain independent legal advice. We handle many of these types of disputes which usually involve a high degree of urgency to protect your position immediately. Subject to that review we will usually advise we write immediately setting out your position and seeking written undertakings from the former employee and their new employer including disclosure of what they have, and confirmation of what they have done, and requiring a response usually in a matter of days (at most).
At this early stage we also may make clear the legal costs the employee and/or the new employer may be ordered to pay if they do not give undertakings (legally binding forms of promise) if the court finds against them.
If you are considering a springboard injunction or consider you may need one, t is fundamentally important that you position yourself early for success if the above steps are necessary.
What Are The Costs of Filing For an Injunction?
Applying for an injunction can be expensive. As are the costs of resisting one. Legal costs typically run into thousands of pounds, if not more.
The factors that impact the costs of applying for an injunction are unique to the circumstances of the particular case. Usually, the process is time-consuming. But the crucial factors which really impact costs include how urgent the application is, the number of witnesses involved, and whether the application is with or without notice.
If the applicant is required to make a cross undertaking in damages — to pay the respondent damages if the court determines the injunction should not have been made — then the damages awarded to the respondent can be substantial.
How Can Helix Law Help
Injunctions are a powerful tool in litigation. Injunctions can be used strategically and tactically. The costs they incur can be significant and need to be proportionate to the amount in dispute and the value of the claim. By taking this approach, and incurring costs, a Claimant will be able to seek recovery of those costs from the Defendant respondent. In this way injunctions, as well as the substance of their orders, can create pressure via costs.
Whether you are the claimant or the respondent, injunctions must be taken extremely seriously. The courts apply strict tests before granting an injunction. Obtaining legal advice from specialist litigation solicitors is essential before you embark on the process of issuing or responding to an injunction. Usually there is a need to do so quickly, and with a degree of urgency.
It is crucial to have a strong case and understand the implications of an injunction before pursuing one.
We have an experienced team who have experienced injunctions in numerous matters. We are able to quickly assess whether obtaining an injunction is appropriate, and to quickly move these types of application forwards if/as appropriate.
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People frequently tell us that we’re approachable and offer great advice.
They also tell us most solicitors are hard to get hold of whereas we’re happy to listen. The reason for this is that we value long term relationships and we’re happy to speak with business people, to invest our time in understanding your business and whatever your concerns are. Only at that point can we understand whether we’re the right people to help you.