Freezing Orders & Injunctions

Couples that get a divorce or civil partnership dissolution must come to a fair agreement about the division of their finances. This requires both parties to be open and honest about the extent of their financial resources. Even assets owned solely by one party or that were acquired before the marriage can be given to the other party if that is what is fair.

The family courts take into account a number of factors to decide what is fair, such as the needs of the parties, the needs of any children in the marriage, and the duration of the marriage.

However, the prospect of handing over assets to a former partner can cause strong reactions in people, who may feel like certain assets are ‘rightfully’ theirs. This can lead to individuals trying to hide their money and property so that it does not get considered in the divorce or dissolution proceedings.

In many cases, particularly where one party is primarily in control of the finances or has a significantly high Net Worth, the ‘financially weaker’ party may not know how the marital finances are structured, making it easy for assets to be hidden. Asset freezing can prevent a ‘financially stronger’ party from getting away from the marriage or civil partnership with money and property to which you are entitled.

All types of assets can be frozen including overseas assets, for example:

• Bank accounts
• Property
• Cars
• Shares and investments
• Valuable items such as jewellery and artwork

Freezing Orders can even cover assets that do not ‘exist’ yet, such as imminent compensation for a personal injury.

Typically, the court will freeze specific assets of a certain known value, such as a bank account balance. However, Freezing Orders can stretch to cover all assets owned or controlled by your spouse or civil partner.

The process of getting a Freezing Order can be challenging and expensive but depending on the value of your claim and the amount of assets at stake, the benefits can quickly outweigh the costs. We can provide clear, practical advice about your prospects for success and whether making an application is in your best interests.

To get a Freezing Order, you must make a court application. It is likely that you will need to attend at least one court hearing and we are more than happy to represent you throughout the proceedings.

In most cases, you can make your Freezing Order application ‘without notice’. This means that your spouse or civil partner will not be notified of your application to prevent them from hiding their assets before the Order is granted.

When deciding whether to make the Order, the court will consider whether your spouse or civil partner is about to sell or dispose of an asset with the intention of depriving you of its financial benefit. You must satisfy strict criteria to prove this, such as:

• There must be solid evidence of their intention to dispose of assets
• You must show that refusal of the Order would create a real risk of injustice
• There must be sufficient assets to meet your claim

You will also have to make an undertaking. This means that you could be held liable to compensate your spouse/civil partner or a third party if your application is not successful or if the Order is later discharged. For this reason, it is essential to consult a specialist divorce solicitor for advice and assistance in making the application to minimise your risk.

Your spouse or civil partner is the primary target of the Freezing Order, but others who manage, deal with or benefit from assets covered by the Order will also be bound by it. This could include business partners, trustees and banks.

You must serve notice on any third parties that could be affected before they can be bound by the Order. Serving notice on banks is particularly important because they will play a major part in preventing your spouse or civil partner from handling their money.

A Freezing Order can last as long as the court deems necessary.

If the application is made without notice, the court will typically grant the Order for an initial period of 7-14 days. After this period is up, there will usually be another hearing that your spouse or civil partner can also attend. At this hearing, the court will either:

• Keep the terms of the Order the same
• Vary the Order
• Discharge the Order if your spouse/civil partner makes a successful application

If the Order is left in place (either in its original state or varied), it will usually last until the conclusion of the divorce financial proceedings.

In most cases, an application for a Freezing Order can be made ‘without notice’. This means that your spouse or civil partner will not be notified of the application before the Order is made. This usually gives you a chance to freeze their assets before they are put out of the court’s reach.

Where assets have already been moved, we can undertake investigations to try to locate them and take action where necessary. For example, if assets are moved overseas, we may be able to get a global Freezing Order that freezes their assets no matter where in the world they are.

In certain circumstances, we may also be able to get an Avoidance of Disposition Order that sets aside a transaction made by either party to a divorce that is made with the aim of frustrating a claim for financial provision. If your spouse or civil partner disposes of the asset less than 3 years before your application for financial provision, it will be presumed that they had the intention to defeat your claim unless:

• The asset was exchanged for its appropriate monetary value
• The third party who acquired the asset acted in good faith. That is, they were unaware of your spouse/civil partner’s intention to deprive you of the value of the asset

If your spouse or anyone else bound by the Order chooses to ignore it, they could be held in contempt of court. As a result they could be fined, their assets could be seized, or they could receive a prison sentence.

If you are the party at risk of a Freezing Order, we can help you take steps to minimise the risk of an application being made, such as:

• Providing clear, honest disclosure about your finances with your spouse or civil partner at the earliest opportunity
• Consistently staying in communication with your spouse/civil partner and their legal representatives
• Being open to cooperative discussion about the divorce financial settlement

If a Freezing Order is made against you, we can provide advice on getting the Order discharged, including:

• Arguing that your former spouse or civil partner has no arguable case for a Freezing Order
• That there is no risk that you will dispose of your assets with the intention to hide them
• That the Freezing Order is oppressive and does not allow you to meet your ordinary living expenses and your reasonable legal costs and business expenses

Freezing Orders and Injunctions can be an extreme measure that the courts will not grant lightly. They tend to be expensive and carry financial risks due to the requirement that you give an undertaking to pay for costs incurred in complying with the Order as well as potential liability for damages if the Order is later discharged.

Furthermore, it is important to remember that a Freezing Order will not necessarily resolve a divorce financial dispute overnight. For example, even if a global Freezing Order is made, until it is recognised by the foreign courts that have jurisdiction over the assets, it may be unenforceable.

Therefore, the advice of a solicitor who specialises in complex financial matters is essential to ensure you are taking the right step by making an Injunction application and to minimise the risk of any financial loss.