What is an injunction?
An injunction is a Court order which orders a company or person to stop doing (called a "prohibitory injunction") or to do (a "mandatory injunction") a particular act or thing. A party who breaches an injunction can be held in contempt of Court which in some circumstances can lead to imprisonment.
When can a party seek an injunction?
An application for an injunction can be made before or after Court proceedings have begun. The Court can grant an injunction before the start of Court proceedings where the matter is urgent or if it necessary in the interests of justice (for example if there is a real risk that funds will be dissipated or evidence will be destroyed).
An injunction made before a case goes to trial is known as an "interlocutory" or "interim" injunction. It can be expressed to remain in force for a particular period of time. Otherwise, it remains in force until the matter comes to trial or the Court makes any further order. When the case comes to trial, the Court will decide whether or not to make a "final" injunction. Interim injunctions are discussed in greater detail below.
The following principles are applicable to all injunctions:
1. The party applying for the Injunction must have a valid underlying claim
It must be able to show that it has legal rights which have been or are likely to be undermined by the other parties action, or that the other party has behaved, or is likely to behave in an unconscionable manner. A substantive cause of action (i.e. one capable of founding an action before the Court) must exist
2. Injunctions are a discretionary remedy
An injunction is an equitable remedy, which means that:
- The Court is never obliged to grant an injunction and will use its discretion to only grant an injunction where it appears to be just and convenient to do so; ii. An injunction is subject to the usual equitable rules, in particular:
- Any delay in applying for an injunction can damage seriously the prospects of obtaining one; and
- The party applying for the injunction must have "clean hands" (i.e. they must have acted properly themselves).
3. Damages must not be an adequate remedy
The Court will not grant an injunction if an award of financial compensation would be an adequate remedy (i.e. if the party applying for the injunction can be redressed in full, simply by an award of damages).
Interim injunctions are either obtained "on notice" or "without notice". With an "on notice" application, the other side is told that the application for an injunction is being made and when and where it will be heard.
A "without notice" application is made without the other party having any notice of the application or being present at the application hearing. The Court will only grant an injunction on such an application if there are good reasons for not giving the respondent any notice (e.g. the matter is so urgent that the applicant does not have time to tell the respondent that he intends to seek an injunction, or where giving notice would lead to a serious risk of evidence being destroyed or assets being dissipated before the injunction is heard).
Applications for an interim Injunction can be "ex parte" or "inter partes". In an "ex parte" application, only the party seeking the injunction has the opportunity to put its case to the Court. On an "inter partes" application, the Court will hear both sides' arguments.
There can also be combinations of the above. For example, a particularly urgent application might be "ex parte without notice". In less urgent cases (but where there is still not time to allow the other side time to prepare the case), it may be "ex parte on notice" (in which case the other party can attend the hearing and may be allowed make limited representations, but will not be able to present a full case).
To proceed with an "ex parte" application it is necessary to show a strong enough case to justify the Court proceeding without hearing the other side's case. It is crucial that the party applying for the injunction discloses all relevant facts to the Court, including any matters unfavourable to its case, .Failure to do so can result in the injunction being set aside and the Court ordering the applying party to pay the costs of the other party and damages for any harm caused by the injunction.
If the Court grants an "ex parte" injunction it will usually fix a date for a further hearing, with all parties present, and the interim injunction will only last until the date of that hearing. Alternatively, the interim injunction may be expressed to last indefinitely (until trial), but with a proviso that the party subject to the injunction can apply to the Court to vary or discharge the undertaking. At any further hearing, the party that is subject to the injunction can argue that the injunction should not have been granted or should be set aside.
The Court has the power, at all times, to vary or set aside an injunction on the application of any party.
Cross-undertaking as to damages
In general, before granting an interim injunction, the Court will require the party applying for an injunction to give the other side a "cross- undertaking in damages" (i.e. an undertaking to compensate the other party for any harm that the injunction may cause, if the Court should decide at a later date for whatever reason that the injunction should not have been granted or should be discharged). Depending on the circumstances of the case, the damages awarded under a cross- undertaking can be substantial.
The Court may also require the party applying for the injunction to demonstrate that they have the means to meet any liability under the cross- undertakings (and if they are outside England and Wales, they may have to put and leave funds in England and Wales as a deposit for any such liability). The ability or otherwise of the party applying for an injunction to meet its potential liability under this undertaking is taken into account in deciding whether or not to grant an injunction.
What procedure must be followed for obtaining an injunction?
An application is made to the Court that is (or will be) dealing with the main claim. The requirement for a formal Application Notice may be dispensed with in the case of a without notice application (although it will normally then be necessary to undertake to the Court to issue an Application Notice as a matter of urgency).
An Application Notice must state:
- What order the applicant is seeking;
- The reasons why the applicant is seeking the order;
- (If there is a hearing) the date, time and place of the hearing.
If the applicant wishes to rely on anything in the application notice as evidence, it must be verified by a statement of truth.
An application for an interim injunction must usually be supported by evidence. This will usually be in the form of a witness statement or affidavit including all material facts of which the Court should be made aware, and attaching relevant documents. Indeed, injunctions are normally argued on the basis of statements or affidavits, rather than "live" witnesses.
As mentioned above, there is an obligation on the applicant for an injunction (an particularly in the case of an "ex parte" application) to inform the Court of any point that may help the other side or that it believes the other side would have made if it had the opportunity to be heard. This duty extends to facts that the applicant or the other side would have known about had they made proper enquiries. If the Court subsequently considers that the party applying for the injunction has not made proper enquiries or full disclosure, it will set aside the injunction, which will expose that party to a damages claim under his cross-undertaking (as discussed above) and an adverse costs order.
What costs are involved?
Whilst the costs of applying for or resisting an application for an injunction will always depend on the facts and circumstances of the particular case, injunctions are in general an expensive and time consuming remedy and costs can quickly run into thousands and indeed tens of thousands of pounds.
Factors that will affect the level of costs will include:
- The urgency of the application;
- The number of witnesses involved; and
- Whether the application is with or without notice.