Injunctions are important and draconian remedies. An injunction is an order of the court which requires someone to either carry out a specific act (known as a mandatory injunction) or refrain from doing a specific act (known as a prohibitory injunction).
This article discusses the scenarios in which injunctions can be a useful weapon in the armoury of a litigant and the factors a court considers when determining whether an injunction should be granted.
It is often the case that an order for a party to pay money is not sufficient, which is when injunctions are necessary. Injunctions can be enforced by way of committal to prison if they are breached, which makes them extremely effective.
Examples of Injunctions
There are many examples when injunctions may be necessary. One example would be where a winding up petition has been issued against someone where the sum claimed is disputed on substantial grounds. As the winding up petition should not have been issued in the first place, an injunction can prevent the petition being advertised in the London Gazette, a process which alerts others to the perilous financial position of the debtor.
Examples can also be found in the world of property litigation, where proprietary rights often need to be enforced. One example would be where a person is trespassing on a neighbour’s land. An injunction would prevent the trespass from continuing, as if it did, the trespasser could be referred to court for disobeying the injunction.
Injunctions can also be used to restrain unlawful competition by employees. Freezing injunctions can restrict dealings with assets, to prevent them from being unlawfully dissipated.
Different Forms of Injunctions
Injunctions can be granted at the end of a trial once a court has considered all of the evidence in a case. An injunction granted in this situation is a final remedy. Injunctions granted before a trial are known as interim injunctions. In this situation, the court is clearly faced with a difficult prospect of having to decide whether to grant an injunction without hearing all of the facts. The basic principle applied is that the court should take whatever course seems likely to cause the least irremediable prejudice to one party or the other.
The Court’s Approach
Injunctions are a discretionary remedy and there are no definitive rules about when they will be granted. The court will consider all the circumstances of the case and be guided by settled principles distilled from case law.
First, an injunction will only be granted if the Claimant can show it has a legal or equitable right which the Defendant is threatening to invade. The right must be one capable of founding an action before the court, for example, breach of contract or an actionable tort.
Secondly, a court will not grant an injunction if damages would sufficiently compensate the Claimant. As a rough guide, damages would compensate the Claimant if the injury to the Claimant’s rights is small and capable of being estimated in money and the injunction would be oppressive to the Defendant if granted.
The considerations a court takes into account in deciding whether to grant an interim injunction are more nuanced still and the person seeking the injunction generally has to provide a cross-undertaking to pay damages. This means the person seeking the injunction must provide an undertaking to pay compensation if it is later determined that the interim injunction was not justified.
While injunctions can be very useful, applications for injunctions prove costly if made incorrectly. If you are considering making an application for an injunction, or are being threatened with injunctive action, it is important to take legal advice.
Paul Davis is a Partner at BHW Solicitors in Leicester and regularly writes and advises on all aspects of commercial and property litigation. Paul can be contacted on 0116 281 6231 or at [email protected]