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When to Call Injunction Solicitors for Effective Dispute Resolution • BBS Law
The reference to an “injunction” can be something of a misnomer.
Taken at its true meaning, an injunction is simply an order made by a court requiring or refraining someone from taking certain specified steps. An injunction order is a serious matter, the breach of which is punishable by contempt of court which could potentially lead to committal to prison.
“Permanent” injunctions can be granted by the court to provide a long-term relief to an aggrieved Claimant, for example to prevent the continued trespass on land.
However, when talking in general terms about an injunction, we are typically thinking about circumstances where a court grants an emergency injunction (known as the grant of interim relief).
There are a number of different scenarios where a court may be prepared on an emergency basis to order someone to do something – or stop them doing something – at the outset of a dispute, for a short period of time until the dispute can be resolved by the court. A typical example of this scenario is an application for interim relief to prevent an ex-employee taking steps to compete with his former employer in breach of the terms of his former employment contract. The employee/Defendant may be arguing (for a multitude of reasons) that he is not bound by the terms of the contract and that he is therefore free to compete without restriction. However, in certain circumstances the court may be prepared to prevent the ex-employee from taking any steps to compete in the short term in order to protect the Claimant’s business – essentially to keep the status quo in place – until the court is in a position to decide the “rights and wrongs” of the case.
That however is just one example of where a court may be prepared to grant emergency interim relief. Other examples include freezing injunctions (which restrict dealing with assets), search orders (permitting a search of a Defendant’s property for the purposes of preserving evidence), privacy injunctions (preventing for example the publication of information), orders for delivery up of property, and orders for other property related issues (for example restraining trespass or preventing a party from transferring a property to another). Again the purpose of these orders is to provide a short term protection to the Claimant by holding the current position in place until the court can decide matters.
A party considering that it may need to apply to the court for interim relief should consider carefully whether there are grounds to do so and the likelihood of the court granting the order, which will obviously depend on the particular circumstances of the case. The risk of proceeding where an order is unlikely to be granted is the wasted costs of pursuing the application and (if the opponent has been given notice of the application) the possibility of also having to pay their costs.
In general, in order to grant interim relief, the court has to be initially satisfied that there is “a serious question to be tried” i.e. establishing whether the Claimant has a good case. If so, the court must consider the “balance of convenience“, in other words whether the grant of the order is appropriate which will involve a number of factors not least whether the payment of damages would be an adequate remedy rather than the court granting an injunction. As part of that deliberation, the court will consider the damage/injustice that would be served to the Claimant if no injunction was granted, including the consequences if the steps that the injunction is designed to protect are indeed taken, and what irreparable damage may be caused to the Claimant in those circumstances.
There are a couple of important issues to consider in terms of the proposed application.
Firstly, a Claimant considering such an application will usually be required to proceed with speed. The fact of any significant delay in pursing the application may persuade the court that the circumstances do not justify the grant of interim relief (on the basis that if there was a scenario that required protection, the Claimant would have acted more quickly).
Secondly and importantly, a Claimant applying for an injunction will be expected to provide to the court a “cross undertaking in damages“, which is essentially an undertaking to pay to the Defendant whatever the court may assess by way of compensation, if the court later finds that the injunction was wrongly granted. Using the above employment scenario as an example, if the ex-employee persuades the court that his contract of employment was not valid or enforceable, but where the injunction had prevented him from competing (and potentially working) for a period of time, the Claimant/employer will be expected to compensate the ex-employee for any provable losses in accordance with the cross undertaking (that it would have been required to provide as a condition of the grant of the injunction). This for example may amount to several months of lost earnings.
As will be appreciated this is a complicated area of law and it’s crucial that a party considering pursuing an application for emergency interim relief urgently seeks sensible and commercial legal advice. The litigation department at BBS Law have a team of solicitors who have significant experience of dealing with these type of applications, regularly advising both Claimants looking to issue applications and Defendants who have either been served with an application or who have already been made subject to an order.