Freezing Orders in the UK: A Powerful Legal Tool to Protect Assets

Omar Elzayat
International Associate 

Freezing orders, sometimes known as Mareva injunctions, are one of the most effective legal tools in the UK for protecting assets. Courts use freezing orders to prevent individuals or businesses from disposing of or hiding assets during litigation, ensuring enforcement of any future judgment.Whether you’re a creditor, business owner, or involved in litigation, understanding freezing orders can be crucial to securing the financial outcome you need. This article explores what freezing orders are, explains the legal framework behind them, and shows how to obtain and enforce them.

A freezing order is a court order that stops a party from dealing with or disposing of their assets, either within the UK or globally. It temporarily prevents the defendant from dissipating assets before judgment, ensuring those assets remain available to satisfy a future court ruling. Freezing orders can target assets domestically or worldwide, covering multiple jurisdictions. Courts grant these orders when they identify a serious risk that a defendant will hide, transfer, or deplete assets to avoid paying a future judgment.

To obtain a freezing order, applicants must demonstrate that there is an urgent need to prevent the dissipation of assets. Applicants often apply without notice to avoid alerting the defendant and prevent them from being tipped off.

The court will consider several factors, including:

• A real risk of asset dissipation.
• The applicant’s likelihood of success in the underlying claim.
• Whether it is “just and convenient” to grant the order.

File an application with evidence, prove a strong case, and offer an undertaking to compensate if wrongfully granted.

However, due to the strong nature of freezing orders and their effects on the defendant, securing one can be difficult due to the high threshold of proof. Applicants must show strong evidence of real risk, as courts carefully protect defendants’ control over their property.Courts will also consider the rights of the defendant, ensuring that the order is not overly burdensome. They exercise judicial discretion carefully, making it essential for the applicant to present a solid, evidence-backed argument.

Once a freezing order is in place, it effectively freezes the respondent’s assets up to the value of the claim. The respondent must comply with strict limitations on their ability to move or use their assets. This can have far-reaching effects on their financial dealings, business operations, and relationships with third parties like banks. Moreover, a breach of the freezing order can lead to severe penalties, including fines, asset seizures, and imprisonment.

Defendants can ask the court to discharge or vary the order by proving it’s overly burdensome, shows no real risk, or rests on a weak claim. The court then balances both parties’ interests before deciding to lift or modify the freezing order.

Applying for a freezing order carries risks because costs can become significant, especially if someone challenges the order or if complex cross-border enforcement arises. In most cases, the applicant provides an undertaking in damages, thereby accepting liability for the respondent’s losses if the court subsequently determines that the freezing order was wrongfully granted. This fact highlights the importance of seeking expert legal advice before pursuing such an order.Despite the risks, freezing orders remain a critical tool in UK litigation, offering a powerful means to protect assets and ensure the enforcement of judgments.

For specialist advice and support. please get in touch with our divorce solicitors in London now by calling 020 7139 9266 or contacting the GOOD LAW INTERNATIONAL office.

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