Freezing Orders - A Judge Made Rule

Since the late 1970s the jurisdiction of the High Court to grant freezing injunctions has been significantly expanded and refined by case law, practice directions and legislation. The creation of this form of injunction was a judicial innovation, in the case of Mareva Compania Naviera SA v International Bulk Carriers SA (The Mareva). Lord Hoffman, in his foreword to Commercial Injunctions (4th Edition) by Steven Gee Q.C. described the case of Mareva as "...the most remarkable example of judicial creativity in the last century..."

The freezing order was a Judge-made response in the case of Mareva to the modern means of disposing with assets, and attempts to defeat claims through increasingly sophisticated and complicated schemes, thereby making the tracing of assets more difficult to achieve. These attempts might include transferring large amounts of cash by electronic transfer from one country to another, switching assets between offshore companies, and hiding assets in offshore trusts, thereby leaving creditors to obtain judgment first and then later to discover and try to unravel what had happened to assets, perhaps through a series of different jurisdictions and entities. The Mareva line of cases has attempted to put a stop to that practice.

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FOURIE-v-LE ROUX

In the case of Lourie-v-Le Roux [http://hefinrees.wordpress.com/2010/04/20/freezing-injunctions-weapon-for-commercial-litigator/#FOURIE_v_LEROUX] the House of Lords considered the nature of the power and the scope of the jurisdiction to grant freezing orders. Lord Bingham said:

"...In recognition of the severe effect which such an injunction may have on a defendant, the procedure for seeking and making Mareva injunctions has over the last three decades become closely regulated. I regard that regulation as beneficial and would not wish to weaken it in any way. The procedure incorporates important safeguards for the defendant...."

THE ENGLISH COURT AS "INTERNATIONAL POLICEMAN"

Originally, a freezing order was only obtainable in support of litigation brought within England & Wales. These days, a freezing order is often obtained in support of foreign litigation, even in cases where the primary court where the litigation is proceeding would not have a similar power to grant a freezing order (e.g. Switzerland, USA etc.). In 2002 Moor Bick J referred to the jurisdiction as enabling the English Court to act as an "international policeman". There has, however, been some recent change in the jurisprudence with the English Court showing greater signs of reluctance to interfere.

Freezing Orders - A Judge Made Rule