Court injunctions are a powerful tool in litigation. A court injunction can force, prevent, or halt actions. Therefore, the courts have adopted a strict test. If the criterion is not met, then the application may fail. Based on past experience we apply judgement to explain what is achievable. If your chances of success are slim it is better to find out sooner rather than later.
Please get in touch for an initial review on prospects of success. We do provide fee estimates for each stage.
Applying for an injunction
We are a specialist litigation and dispute resolution legal firm acting for those either seeking court injunctions or defending them.
- We have many years of experience in both litigation in court and importantly in out of court settlements.
- We are specialists for employment litigation and in particular the enforcement of restrictive covenants after employment has terminated and trade secrets.
- We also handle cases where shareholders exploit the company assets for their own benefit. The commercial team will resolve problems following termination of a business contract.
- Our team is able to react quickly and meet you at our London offices at short notice.
To help you understand the background to a court injunction we have set out some pointers below.
How to obtain or defend a court injunction
Basic rules to applying for or defending an injunction
To apply for an injunction or to defend an injunction, the court will want to see clear evidence upon which you rely. Suspicion is insufficient. If you have enough evidence to get an injunction the order to force further disclosure of evidence or prohibit destruction.
Extent of the obligation
The courts distinguish between obligations placed on:
- Employees, and
- Obligations placed under business contracts, shareholder agreements, partnership agreements, share purchase agreements, etc.
The general rule is that restrictions on business people such as shareholders, former shareholders, or companies, can be more onerous than restrictions on employees. Much depends upon the strength of the drafting in the contracts.
Demanding an undertaking
A defendant can offer an undertaking. An undertaking is an alternative to an injunction. An undertaking means the offending party “promises” the applicant and the court either:
- Not to breach the restriction for an agreed period; or
- Return any items unlawfully taken and cease breaching the restriction.
An undertaking carries the same weight as an injunction.
Obtaining an injunction
To obtain an injunction you will need to show loss, or the potential for immediate loss, i.e. the threat of loss is imminent. For example, loss can be the diversion of revenue to a competitor. Damage to reputation can be a loss.
Discretion of the court to grant an injunction
There is no automatic right to an injunction. Instead injunctions are issued at the discretion of the court. In exercising its discretion to grant an injunction, the court will look at a number of factors, such as:
- Is there a serious issue in dispute? For example loss of business.
- Could the claimant be compensated with damages? If yes, then the court will consider if the injunction is necessary and may refuse to grant an injunction.
- If the injunction is granted, will the defendant be unreasonably restricted? If yes, then the application for any injunction may fail.
The court adopts a balancing exercise.
Applying for Ex parte without notice injunctions
Injunctions can be made on an “ex parte” basis. The benefit of this being that the court will hear the application immediately, often on the same day. The defendant is not given notice. If the court grants an injunction the defendant will have to apply to have it set aside if he disagrees with the restriction on activities.
Full and frank disclosure
Injunction applications made without notice to the defendant require full and frank disclosure of all relevant documents. This includes documents that could be damaging to your case.
Defending an injunction
The defence will depend upon the precise claim. But we explain some of the more commonly used defences. When acting for defendants, the trick is to use practical arguments to persuade the court to refuse the injunction.
Public policy reasons not to grant an injunction
There is a public policy that individuals must be free to earn a living. Even if there is an agreed restrictive covenant it must be reasonable. If it is unreasonable the agreement will be void for being an unfair restraint of trade. Reasonable means no more than is necessary to protect the business.
Failure to disclose relevant facts
Considering whether the person seeking the injunction has disclosed all material facts, whether or not the facts are in their favour? If not, then the application has a procedural flaw. This is a route of attack.
Defending ex-parte injunctions
If no notice was given to the defendant of the injunction application and the application was successful then the defendant will have to apply to have the injunction set aside. The court will fix the date at the ex parte hearing.
We handle applications to set aside injunctions. If set aside, then the claimant will be required to satisfy its duty to compensate the defendant for loss during the period in which the injunction was in force.
In understanding that applying for or defending an injunction application is high risk and high cost, you’ll want to ensure you have experienced and savvy solicitors on your side who are specialists in injunctions. We meet all these criteria so please do get in touch.