Fraud is rampant in today's market. The Civil Justice provides some tools for an innocent party to hold the fraudster to account.
One of them is the Mareva injunction. A Mareva injunction, also known as a freezing order, is a powerful legal tool used to prevent a defendant from disposing of their assets while a lawsuit is ongoing.
This type of injunction is particularly effective in cases involving fraud, breach of trust, and situations where there is a risk that the defendant will move assets out of reach to avoid enforcement of a judgment.
Below, we break down what you need to know about Mareva injunctions and how they can be applied.
What is a Mareva Injunction?
A Mareva injunction is a court order that temporarily restricts a defendant from transferring, selling, or otherwise dealing with their assets. The purpose is to ensure that assets remain available to satisfy a future court judgment.
This injunction does not determine liability but serves as a protective measure to prevent a defendant from making a judgment unenforceable through asset dissipation.
A Mareva injunction is sometimes brought along with a Norwich order (disclosure order) or Anton Piller order (civil search warrant order). This blog will only focus on the Mareva. Please review our other blogs regarding the other orders.
When Can You Obtain a Mareva Injunction?
Courts do not grant Mareva injunctions lightly. To secure one, a plaintiff must establish:
A Strong Prima Facie Case – The plaintiff must present credible evidence that their claim has strong legal merit.
A Real Risk of Asset Dissipation – There must be evidence suggesting the defendant may move, hide, or dispose of assets in a way that frustrates enforcement of a judgment.
Balance of Convenience – The court will consider whether the impact of granting the injunction is fair and not unduly prejudicial to the defendant.
Full and Frank Disclosure – If applying without notifying the defendant (ex parte), the plaintiff must disclose all relevant facts, including those that may weaken their case.
Undertaking to Compensate for Damages – Generally, the plaintiff must provide an undertaking to compensate the defendant if the injunction is later found to be unjustified.
Considerations for Plaintiffs
International Reach: If a defendant has overseas assets, courts can issue worldwide Mareva injunctions to restrict movements across jurisdictions.
Third-Party Compliance: Banks and other institutions may be required to freeze accounts and assets to enforce the order.
Strategic Timing: Applying for a Mareva injunction early in litigation can prevent defendants from acting against enforcement efforts.
Consquences of Breaching Order: If the defendant is found to be breaching the Order, then can be found in contempt of court.
Challenging a Mareva Injunction
If you are subject to a Mareva injunction, you can contest it by demonstrating:
That there is no genuine risk of asset dissipation.
That the plaintiff’s case is weak or lacks merit.
Lack of full and fair disclosure.
That the injunction causes disproportionate hardship or is overly restrictive.
Our Expertise in Mareva Injunctions
Our firm has specialized experience in obtaining and defending against Mareva injunctions. We understand the complexities involved in proving asset dissipation risk and can provide strategic legal guidance to ensure the best possible outcome. Whether you are seeking to protect assets or challenging an injunction, we have the knowledge and expertise to assist you.
Final Thoughts
A Mareva injunction can be an effective way to protect assets at risk of dissipation, but securing one requires a well-supported legal argument. If you need to obtain or defend against a Mareva injunction, legal guidance is essential.
Please contact our firm for strategic advice and legal representation.
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