Court injunctions: obtain or defend

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Court injunctions: obtain or defend

A court injunction either stops an individual or business doing something, or forces an action. We tell you which court injunction to pursue.

If an organisation or individual has damaged your company, and you don’t seek an injunction, the damage may be irreparable.  We protect your value and minimise your damage.

Injunctions can be interim, i.e. pending the final court case. Alternatively, an injunction can be your final remedy, i.e. the injunction remains in force indefinitely or for a period set by the court. Injunctions can be used in a range of sectors and scenarios, including tangible assets, and intangible assets.

The appropriate court injunction

Broadly, there are two main types of injunction. The choice depends on your type of loss. Injunctions either:

  1. Protect assets; or
  2. Restrict activities.

Causes of action

All injunction applications arise because an applicant has a claim against a respondent. However, the applicant cannot wait until the trial finishes for an appropriate remedy.

So the applicant applies to the court for an interim court injunction. The injunction remains in force until the full trial finishes. If the respondent does not comply with the injunction, the consequences are severe.

The route to take

We act for applicants and respondents. We protect assets and restrict activities. We know the pressure points. We first create an appropriate case plan to meet your objectives.

Assess losses prior to the court injunction

We ascertain your losses or likely losses. Often your losses cannot be calculated, e.g. an ex-employee breaches their restrictive covenant, by taking your clients to a competitor.  Clearly, this is bad for your business. However, although you know there is a loss, you can’t calculate the amount.

Preparing your case

Applicants must show the court they have a reasonable case against the respondent. Good cases often result from e.g.:

Common court injunctions

The examples are unlimited. We have resolved similar cases to yours.  Court injunctions limit the damage you’ll suffer.

Obtaining an injunction where a director is in breach of his fiduciary duties

Here, the application is made by the company on behalf of the shareholders. To succeed, the company must show that:

  1. There is a serious question to be tried, that being the director acting in breach of duty or intending to act in breach;
  2. Damages alone would not be an adequate remedy. This can often be proven as a director’s breach may financial cripple a company;
  3. The injunction would not unfairly detriment the director; and
  4. There are special factors in favour of granting the injunction. One argument is that the actions of one director affect the other directors on the board, and put the other directors in their own position of breach of duty. The examples are not exhaustive and new points do emerge during disclosure.

Evidence is usually a key decisive factor.

Court injunction application

In some limited circumstances, applicants can apply for an injunction without notice, i.e. without telling the respondent. The respondent would then be completely unaware the court granted an injunction against them.

Injunction without notice risks

However, an injunction without notice has risks. The respondent can ask the court to set aside the injunction. If the court sets the injunction aside, the applicant pays the respondent’s costs. Moreover, the applicant cannot control the respondent’s costs. Nevertheless, applicants often ask courts to assess the respondent’s costs.

Hence, if you apply for an interim injunction, you must undertake to pay the respondent damages, if:

  • A court sets the injunction aside; and
  • The respondent suffers losses.

To prevent cost penalties, we build evidence to support your case. We also prepare counter-arguments to the respondent’s likely defence.

Procedures

Usually, court injunctions are a last resort. Applicants exhaust alternative solutions before they apply for a court injunction. An injunction is the final step to prevent damage and protect your business’ value.

Injunction enforcement

Injunctions must be “served” on the respondent. A search order has to be personally served.

The penal notice

Most court injunctions contain a penal notice. If the respondent does not comply with the injunction, the respondent can be imprisoned.

Defending court injunction applications

We defend respondents against a court injunction application. Although our arguments depend on your case, arguments often focus on the applicants’:

  1. Weak case;
  2. Disregard for procedural requirements;
  3. Failure to make full and frank disclosure; and
  4. Your detriment if the court grants the injunction.

Naturally, we combine these arguments to counter all the applicants’ points.

Court injunction costs

Sometimes, the court injunction hearing deals with costs.  Othertimes, costs wait until the full trail.

These days courts require all costs to be “reasonable and proportionate“. If not, courts assess your costs claim, and often reduce it.  We know that costs are always a concern. So we budget for each stage, so you control your downside. Our budgets also limit the risk of the court ordering an assessement of your costs.

Our court injunction track record

Recent instructions include:

  • Disclosure of information injunction for a hedge fund manager who sought:
    •   The identity of an EU funds’  beneficial owners, suspected of money laundering.
  • Injunction for a London FinTech company against key employee who:
    • Sought to take company confidential information to a competitor.
  • Resisted freezing injunction for company director who allegedly:
    • Transferred intangible company assets to an outside partnership.
  • Search order for children’s toy manufacturer whose competitor passed off their drawings. We:
    • Obtained the competitors’ documents,
    • Won damages for loss of profits.

A court injunction is a draconian measure. Court injunctions are powerful tools in the litigator’s armoury. The requirements are high, the procedures strict.

We know the requirements and procedures. We ensure damage to your business ceases.  We also know which defences succeed when we defend court injunctions.