Enforcing injunctive relief

When individuals or businesses hear the word “injunction” they probably associate it with News of the World articles and celebrities, but injunctive relief is far more common than people may think.

Injunctions are a viable solution for any individual or business requiring urgent injunctive relief to prevent any further severe damage to be done against them or their business.

At Primas Law, we have extensive experience in being a person’s or business’s first call to assist them in obtaining this protection as quickly as possible.

What is an injunction?

An injunction is a court order that prohibits someone from doing something or requires someone to do something. It is an order that is put in place for an “interim period”; which is until the entire court proceedings at a trial are determined (or agreement).

At Primas Law, we have been instructed across a variety of injunction applications. Some recent case studies include:

1. An ex-employee, who, while still in our client’s employment, was encouraged by his new employer to divulge confidential information (including client names, financial information and company size). Furthermore, the ex-employee also, while in employment, encouraged and began poaching our client’s customers for his new employer.
2. An individual had invested £350,000 with a company/individual operating outside of England and Wales on the promise of a £10,000 per month return and subsequently the return of their total investment.

How to get an injunction and what evidence is needed.

Before making an application for an injunction, you will need some evidential proof of the suspicions you have in order to persuade a Judge that there is a “serious issue to be tried” or that they have a strong case against the Defendant.

In terms of Case Study One, where you are suspicious of an employee’s activity, it may be that the employee is in breach of restrictive covenant.

In this instance, we would look for the following evidence:

• Has the employee sent emails to a personal email address?
• Has the employee logged into a personal cloud account from a work computer or appliance?
• Has a selection of your clients left your business shortly after the employee’s employment ended?
• Has the employee sent emails or other correspondence to customers regarding the new employment and/or business venture?

In terms of Case Study Two, where you potentially believe you are a victim of a sham investment, a freezing injunction may be required.

What is a freezing injunction?

A freezing injunction is an interim measure that prevents someone from being able to dispose of their assets before a judgement has been enforced.

In relation to a potential sham investment, we would look for the following evidence before making an application for an injunction:

• Is the company/individual regulated by the FCA?
• Are there contractual documents governing the investment?
• If the investment is with a company, where is that company registered?

Are there alternate remedies to injunctive relief?

In addition to the Judge deciding whether the Claimant has a good case or if there is a serious issue to be tried, the Judge will also consider whether an interim injunction would suffice.

This test is to determine if the damage done to the Claimant by not granting the injunction outweighs the damage done to the Defendant.

In terms of Case Study One, the court may consider:

• If the ex-employee’s new employer should have restrictions on their trading ability?
• Would financial compensation be an adequate remedy as opposed to the interim injunction?
• Is there a risk that damage to the Claimant is continuing?
• Would granting the interim injunction protect or restore the status quo?

In terms of Case Study Two, the court may consider:

• Would it cause unnecessary and disproportionate financial hardship to the Defendant?
• Is there evidence that the Defendant will dissipate their assets?

In both case studies, the Court will ask if the Claimant will provide a “cross-undertaking.” This effectively means the Claimant will promise to cover any damages the Defendant suffers, should the court decide at trial that the Claimant was not entitled to the interim injunctive relief.

Obligations on the Respondents

If the court grants the Order for an injunction to be served, then the order attaches a “penal notice”.

This penal notice tells the parties who are bound by it, and third parties, that a breach of the order (injunction), or a third party enticing the breach, would be in contempt of court.

Once the Order has been made, this will assist the Claimant in preparing for their case against the Defendants.

For our case studies, this can be done by the following:

Case study one:

• An order delivering up any confidential information that the new employer had received, and that the ex-employee disclosed. As a result, the Claimant was able to solidify their case and have a greater understanding of what confidential information had been taken. It demonstrated that the ex-employee’s initial actions were far greater than they had initially anticipated and that the employee was in breach of their restrictive covenant.

Case Study Two:

• A worldwide order to freeze the Defendants assets was put in place. This freezing injunction prevented the Defendant from accessing their funds and dissipating their assets. Having this order assisted the Primas team in negotiating the return of the client’s entire investment along with his legal costs.

If you need support in understanding injunctive relief and the steps that can be taken to protect your business, our team of expert Litigation solicitors can help. 

To find out more, please contact Partner and Head of Litigation, Daniel Thomas: Daniel.thomas@primaslaw.co.uk