Served with a Freezing Order - What should I do?
This guide is intended to assist individuals who have been served with a freezing order (also known as a ‘freezing injunction’). It outlines the reasons the order was obtained; basic advice as to how to respond in the short term; the immediate steps that usually need to be taken to comply; and the consequences of not complying.
1. Why the order was obtained and what it means
If you have been served with a freezing order without advance notice, it means that the other side filed substantial evidence with the court to justify the making of the order. It means the court was convinced, for the time being, that there is a good and arguable case against you; that you have assets; and that those assets need to be safeguarded to prevent you from moving, hiding or otherwise dissipating them to make yourself judgment proof against the claim being brought against you.
What the order does not mean is that you have been found liable for anything; that the court has made any findings in fact or in law against you; or that your assets no longer belong to you. In the meantime, though, there will be significant and immediate consequences to your day-to-day life. Indeed, by the time you are served with the order, your banks will also have been (or will very soon be) served with the order and thus, prohibited in law from allowing you access to your accounts outside the terms of the order.
Moreover, although the order should entitle you to minimum spending limits for ordinary living and legal expenses, you will not practically speaking be able to enforce those rights and access those limits until you have met certain other terms of the order (see below under heading 3). In the meantime, your scheduled direct debits and standing orders are unlikely to be processed, automatic transfers between accounts may not take place, etc.
2. How to respond in the short term
If the freezing order was taken out without advance notice to you, a further hearing should have been scheduled (known as the “return date”). On the return date, which could be within a week of the original order, the court must consider whether to continue the order and if so, whether any terms should be varied. Although technically it is for the other side to show that the grounds for the original order are made out, practically speaking it is for you to show why the order should be discharged or varied.
Unless (a) you can produce evidence that you have access to more funds than the value of the freezing order, or (b) you can show that the freezing order was clearly taken out against the wrong person or there was some other obvious mistake, then the best way to respond is often to consent to the continuation of the order for the time being on a without prejudice basis and to comply with its immediate requirements. This is by no means an admission of liability and will not prejudice you or your case; but it might be the fastest and surest way for you to access your bank accounts for minimum daily living expenses and bill payments, whilst avoiding the considerable time and expense that would be required to challenge the order on the return date.
The fact is, in most cases there is insufficient time to put together all the evidence you would need to successfully argue on the return date that the court never should have made the order in the first place. Agreeing to a continuation for the time being can, therefore, be a practical and efficient way of gaining access to funds and, in the meantime, avoiding wasting unnecessary time and expense.
3. The immediate steps that usually need to me taken to comply with the order
You will almost certainly be required, within days of being served with the freezing order, to swear and serve an affidavit disclosing all of your assets with a value above £1,000, including details of your bank accounts, pensions and shares, as well as the value of your home, your vehicle(s), any art or jewellery, etc. and the equity you hold in each item.
A standard freezing order may also require you to disclose to the other side details concerning both your income and your monthly expenditures for you to be able to access funds for legitimate ordinary living expenses. Once disclosed to the other side, you will usually then need to ensure that the other side provides the requisite information and authorisation to the bank(s) for them to be able to release, on a restricted basis, the relevant accounts.
After you have met these and any other immediate requirements of the order, you can focus your attention on applying to vary or discharge the order and/or on defending the corresponding claim made against you.
4. Consequences of not complying with a freezing order
For as long as the freezing order is in place, you must comply with it.
At the top of the freezing order, there will no doubt be a “Penal Notice” warning you that if you do not comply with it, you could be found in contempt of court. The penalty may be a fine, seizure of assets or up to two years’ imprisonment. There are other sanctions the court may also consider.
The court takes breaches of freezing orders very seriously. It is, therefore, critical that you fully understand the terms of a freezing order against you and that you comply with them. Failure to do so is may have dire consequences.
Since the terms of every freezing order can be unique and the circumstances of every case distinct, if you are served with a freezing order, you are urged to seek immediate legal advice to ensure prompt and appropriate steps are taken to comply with the order and to protect your overall interests in the proceedings.