Financial Injunctions

Financial Injunctions

During divorce or separation proceedings, sometimes it is necessary to obtain a financial injunction, known as a freezing order, against the other party.
A freezing order is an interim injunction that stop a party from disposing of or dealing with his or her assets.

These can be necessary in cases where it is possible, or likely, that the other party to the proceedings will attempt to dispose of or hide their assets in order to limit their settlement liability when matters proceed to court. In other words, they may try to avoid paying their fair share in relation to any settlement that could be reached.

At FisherWright Solicitors, we are experienced in obtaining freezing orders on behalf of clients, helping to ensure that the other party cannot hide or dispose of their assets in any way.

Marital Assets

Assets that you or your spouse own either separately or jointly are referred to as ‘marital assets’ on divorce. This can be money in bank accounts, property, stocks and shares, items of high value such as vehicles or antiques, and pensions. Such assets are divided on divorce either by way of agreement, or where this is not possible by an Order of the Court.

Unfortunately in some marriages one party, who may solely own marital assets, may seek to dispose of the assets in order to reduce the available marital assets their spouse can make a claim for. The Court are given specific powers to deal with such scenarios, these are commonly known as financial injunctions.

If you suspect that your spouse intends to hide, dispose of, or transfer an asset, with the intention of limiting your financial gain from the division of marital assets, urgent action is required to ensure that this does not take place to ensure that the assets remain secure. A wide range of scenarios will be covered by this area of law which could include your spouse purchasing a property, making a gift of a substantial nature.

Please have in mind that such applications are expensive, contentious and have a high level of risk involved, it is imperative that comprehensive legal advice is sought prior to making such an application to avoid a costs Order which could be made to your detriment. Our solicitors have extensive experience in this area of law will be able to provide you with comprehensive advice ensuring that your interests remain protected.

Types of Order’s available

1. Freezing Order

A ‘Freezing Order’ is a Court Order which will prevent one party in a marriage, from ‘disposing of’, or dealing with specific assets that are considered to be matrimonial, whether they are held within or outside the UK.

Grounds which you must satisfy to obtain a Freezing Order

In Order to acquire a ‘Freezing Order’ you will need to demonstrate to the Court, that you have a satisfactory and viable case. You will further need to evidence the fact that your spouse has dealt with or intends to deal with the marital assets in an unjustifiable manner and there will be a great risk of iniquity and injustice if the Court does not grant injunctive relief.

It will not be possible for you to solely allege that there is a risk your spouse may dissipate the matrimonial assets. The Court will need to be provided with substantive evidence to demonstrate that this risk exists.  The Court will further give an opportunity to your spouse to explain whether there are satisfactory reasons for why the assets has been dissipated or whether there was an intention of dishonesty.

How will a Freezing Order protect my assets?

The Court has a range of powers to Order an appropriate remedy specific to your circumstances. If it is established within Court that your spouse has the intention to dissipate assets for the purpose of jeopardising a claim for matrimonial finances, the injunctive relief possible can include, an Order freezing the assets concerned, an Order to prevent your spouse from leaving the UK. The Court could also grant an Order for your spouse to make payment of a sum into the Court, or to their legal representative to hold by virtue of a Court Order.

Do I have to inform my spouse?

If there are compelling circumstances, for example you feel that notifying you spouse of the application could defeat the purpose of the application itself, you will be able to make an application on an ‘ex-parte’ basis which effectively means that you will make the application without notifying your spouse.

How to apply for a Freezing Order?

Step 1- Make an application to the Court: The first step to obtain a Freezing Order will be to make an application to the Court to prevent the transaction which could defeat a claim for financial relief. The application will need to be accompanied by substantive evidence which includes a Witness Statement from the party alleging the transaction, and a draft Order outlining the injunctive relief required.

Step 2- Issuing the application: Once the Court has received the application, the content of the application will be considered and the matter will be listed for a hearing. At the hearing, the Court will proceed to consider the evidence of both parties. If possible the Court will make an interim Order to prevent the party from disposing of the asset concerned.

In addition to the final Order, the Court may also require the party subject to the application, to give undertakings, which is a promise by them to the Court, to ensure that the assets will remain preserved.

2. Setting aside the disposal of assets

If you learn that your spouse has already taken action and successfully transferred, sold or disposed of an asset which is considered to be matrimonial, whether within or outside the UK. You will be able to make an application to the Court under Section 37(b) of the Matrimonial Causes Act to have the transaction of concern ‘set aside’ or overturned in good time.

Grounds of setting aside assets which have been disposed of

For the Court to be able to ‘set aside’ a  disposition, whether your spouse had gifted, or entered into a property transaction, it will need to constitute as a ‘reviewable disposition’.

A transaction by your spouse will usually constitute a ‘reviewable disposition’ except in circumstances where the transaction was of a significant value or the individual who the disposition had been made to had acted in ‘good faith’ and at the time of transaction, and did not know that the disposition had been made for the sole purpose of defeating a financial claim.

The Court will usually be satisfied that a particular transaction by your spouse has had the intention of defeating a financial claim, if your spouse had disposed of the asset less than 3 years prior to the application.

If you are in this situation, you will be required to take immediate action, to ensure that the disposal can be considered by the Court and there is no delay which could prejudice your matter.

How can I make an application to set aside a disposition?

The method of application to set aside a transaction will vary depending on whether there are ongoing financial remedy proceedings in your matter. As a form of guidance, the procedure involved will be similar to the procedure for applying for a Freezing Order which is outlined above. For further advice, please contact our solicitors at FisherWright who will be able to provide you with comprehensive advice tailored to your individual circumstances.

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