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What is a Freezing Order and how can it be used in divorce proceedings?

What is a Freezing Order?

A Freezing Order, which is also referred to as a Freezing Injunction, is an interim order made by the court to prevent one party from dealing with, or disposing of, their assets during divorce or dissolution proceedings.

An application for a Freezing Order usually arises in cases where one party is trying to frustrate the proceedings by attempting to hide assets or put them out of the reach of the other party that has a valid claim to them owing to their marriage or civil partnership.  Examples of this include:

  • Selling or re-mortgaging property
  • Dissipating savings
  • Transferring assets to a third party, such as moving savings to a family member or a new partner’s bank account
  • Transferring assets overseas
  • Moving savings into a trust

A Freezing Order can be made in relation to assets that are in the UK and abroad.  In the case of the latter, the court would make a Worldwide Freezing Order.  The remainder of this blog shall concentrate on assets that are within the UK.

What assets can be frozen?

The following assets are most commonly subject to a Freezing Order:

  • Bank accounts and investments
  • Private and public shares
  • Property and land
  • Cars

The court can, however, make Freezing Orders in connection with assets that have not yet come into existence, such as a compensation payment for a personal injury.

How to obtain a Freezing Order

The party applying for the Freezing Order, known as the Applicant, must satisfy the court that the other party, known as the Respondent, intends to dispose of an asset with a view of defeating their claims for financial remedies in their divorce or dissolution proceedings, leaving insufficient assets to divide between them.

The Applicant must successfully and evidentially demonstrate that that the Respondent is unjustly interfering with assets, intends to dispose of them, and that if the Freezing Order is not made, there is a real risk of an inequitable financial court order being made in the divorce or dissolution proceedings.

In most cases, an application for a Freezing Order can be made to the Family Court, except for where the Applicant is seeking to freeze assets with a value of more than £15m, or complex assets with a value of more than £7.5m, in which case, the application would need to be made to the High Court.

Although it is possible to apply ‘without notice’ or ‘ex-parte’ to the Respondent, the court would need to be persuaded that there is an exceptional urgency and / or that by giving notice to the Respondent, it would defeat or adversely prejudice the application for a Freezing Order.

There is no fixed term for a Freezing Order and as such, it remains in force for as long as is considered necessary by the court.  Usually, this is until the end of any divorce or dissolution proceedings.

It is important to note that in such applications, the Applicant shall be expected to provide an undertaking to the court, which is a binding pledge or promise, to compensate the Respondent if the application is unsuccessful, or if the court discharges the Freezing Order at a later date.

What effect does the Freezing Order have?

Once a Freezing Order is made by the court, it becomes legally binding and must be adhered to by the Respondent.  If there are third parties in charge of managing, or benefitting from, the assets that are subject to a Freezing Order, they shall also be bound by the prohibitive terms of the order.

If the Respondent ignores the Freezing Order, this would be tantamount to a breach of the order, and possibly considered a contempt of court, for which they would be at risk of having their assets seized, receiving a fine, a community order or in serious cases, being sentenced to prison.  These punishments would be extended to any third parties who knowingly breach the terms of the Freezing Order or assist the Respondent in doing so.

Legal advice

Because of their draconian nature, the court does not tend to make Freezing Orders lightly.  There is, therefore, a high threshold of evidence required to satisfy the court that such an order is required.  These proceedings are usually highly litigious and as the Applicant must pay for the Respondent’s legal costs if their application is unsuccessful, it is essential that legal advice is sought at an early stage about the merits of applying for a Freezing Order.

 

At Tisshaws, our lawyers are all highly experienced in contested financial proceedings and we can advise you on whether there is a real prospect of success in making an application for a Freezing Order.  We offer an initial no obligation consultation for up to one hour for £50 (incl VAT) where you can receive advice specific to your circumstances.  To book an initial consultation, please contact our Reception on 01444 472700, complete the form below or email info@tisshawssolicitors.co.uk.

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