Business Injunction? What you need to know

An injunction is a Court Order which stops a company or person doing something specific. It might be something that they have already done that must be rectified or are about to do and you wish to prevent it happening. The party breaching an injunction can be held in contempt of Court and in some circumstances this may lead to imprisonment. Injunctions are therefore powerful tools to protect your business and are not granted lightly.

When can I seek an injunction?

An injunction can be brought any time before or after Court proceedings have begun. The injunction would be granted if the matter is urgent or if it is necessary in the interests of justice. It would be in the interests of justice if, for example, there is a real risk that funds will be dissipated or evidence destroyed.

What does a Court take into account?

There must a basis for a claim to persuade a court that an injunction is appropriate. It is essential to show that your legal rights have been impinged or are likely to be undermined by the other party.

Injunctions are not guaranteed. They are awarded only at the court’s discretion.

Any delay in applying for an injunction may reduce the prospects of being successful and the applicant must have acted appropriately throughout, in what is known in the legal profession as going to Court with “clean hands”.

There has to be more than an award of damages required to remedy the issues at the heart of the dispute for a Court to grant an injunction. If financial n would be an adequate remedy, an injunction is unlikely to be granted.

Injunctions can be obtained “on notice” or “without notice”. This means that either the other side is aware of the application or not told until afterwards. The court will only grant an injunction without the other party represented, in other words on an “ex parte” basis, if there are good grounds for not telling that party about the action.

If an injunction is granted, the court will generally set a date for a further hearing with all parties present and the interim injunction will only last until the date of that hearing. It may however be that the interim injunction lasts through to a full hearing or trial of the issues but on the basis that the party subject to the injunction can apply to the Court to vary or discharge the undertaking.

What are the consequences for the applicant in applying for an injunction?

Injunctions carry consequences for the party applying to the Court and requesting an injunction.

Before granting an interim injunction, the Court will require the applicant to provide the other party with a cross undertaking in damages. This is written into the Court’s Order.

This means that the applicant gives an undertaking to compensate the other party for any harm that the injunction may cause if the Court should decide at a later date that the injunction should not have been granted or should be discharged.

A cross undertaking can lead to substantial damages and therefore it is vital that there is good cause to apply for an injunction.

In addition to cross undertakings, the Court may also require the party applying for the injunction to make a monetary deposit by way of security for costs. A sum of money is paid into the Court’s bank account and held by the Court. These sums are returned to the applicant if the injunction and subsequent claim is successful and, if not, are paid to the respondent party if they are found to have suffered a loss or costs as a result of the court proceedings.

Costs

There are a number of factors impacting upon the level of costs. These include:

• Urgency of the application
• Whether on notice or without notice
• Volume of documentary evidence and information available to substantiate position
• Number of witnesses involved

Injunctions can be expensive and time-consuming. Your legal team will want to work closely with you and quickly, especially as time is of the essence and a court will consider whether there has been any delay in bringing the proceedings when making its decision. It is important to have all supporting evidence ready and to be as accessible as possible so your legal advisers can clarify any information required and present your case with all the supporting evidence.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk