Defending a commercial injunction

Key Points Overview

• Commercial injunctions can be granted with or without notice, requiring immediate expert legal response.
• Time is critical - you typically have days or hours to respond effectively to injunction applications.
• Interim injunctions are most common - requiring claimants to show serious issue to be tried and balance of convenience.
• Setting aside applications must be made promptly with compelling evidence and legal arguments.
• Consider tactical responses - comply pending challenge, seek variation, or apply for discharge.
• Costs risks are significant - unsuccessful resistance can lead to substantial adverse costs orders.
• Freezing injunctions and search orders carry particular compliance burdens and criminal sanctions for breach.
• Alternative dispute resolution may provide quicker, cheaper resolution than lengthy court battles.
• Early expert legal advice is essential to protect your commercial interests and avoid irreversible damage.

Notice Requirements and Timing

Commercial injunctions can be sought either with notice to the respondent or without notice in urgent circumstances. Without notice applications (formerly called "ex parte") are granted in exceptional cases where giving notice would defeat the purpose of the injunction, such as when there is risk of asset dissipation or destruction of evidence. These applications rely heavily on the applicant's duty of full and frank disclosure of all material facts.

On notice applications provide the respondent with advance warning, typically requiring several days' notice depending on court procedures and case urgency. However, even with notice, the timeframe for response is often extremely tight, particularly where urgent interim relief is sought.

The timing element is crucial because injunctions can cause immediate and potentially irreversible commercial damage. Courts may grant interim relief pending a full hearing, meaning businesses can find themselves subject to restrictive orders within hours or days of an application being made.

Types of Commercial Injunctions

Understanding the different types of injunctions is essential for mounting an effective defence :-

• Prohibitory Injunctions - prevent specific actions such as breaching contracts, using confidential information, soliciting customers, or competing in breach of restrictive covenants (most common form).
• Mandatory Injunctions - compel positive action such as delivering up confidential documents, restoring access to systems, or performing contractual obligations (courts more reluctant to grant due to intrusive nature).
• Freezing Injunctions (formerly Mareva injunctions) - prevent disposal of assets up to the value of the claim, can be domestic or worldwide with specific disclosure obligations requiring detailed asset information.
• Search Orders (formerly Anton Piller orders) - permit entry to premises to search for and preserve evidence, granted only in exceptional circumstances with strict safeguards and supervision requirements.
• Interim Injunctions - provide temporary relief pending trial (most common in commercial disputes).
• Final Injunctions - granted as permanent remedies following full trial.

How to Respond to Injunction Applications

The response strategy depends on whether you receive notice and the type of relief sought:

Immediate Steps:

• Instruct experienced litigation counsel immediately
• Preserve all relevant documents and evidence
• Assess the strength of the applicant's case and evidence
• Evaluate commercial impact and available options
• Prepare evidence in response, including witness statements

For Notice Applications:

• File detailed evidence challenging the applicant's case
• Prepare legal arguments attacking the injunction criteria
• Consider cross-undertakings in damages and their adequacy
• Evaluate prospects of success and costs implications
• Prepare for urgent court hearing

For Without Notice Orders Already Granted:

• Comply immediately to avoid contempt proceedings
• Apply urgently to set aside or vary the order
• Gather evidence of material non-disclosure
• Prepare comprehensive evidence challenging the substantive case
• Consider whether to seek expedited trial

Defence Tactics and Strategy

Effective defence requires attacking both the legal criteria and factual basis for the injunction:

• Challenge serious issue to be tried - demonstrate the underlying claim is weak, unsupported by evidence, or legally flawed.
• Attack balance of convenience - show greater harm to your business than protection to the claimant.
• Contradict key allegations - provide detailed witness statements and documentary evidence undermining the claimant's case.
• Expert evidence - use technical or industry expertise to challenge the applicant's factual assertions.
• Material non-disclosure - identify failures in duty of full and frank disclosure for without notice applications where material facts were not revealed to the court.
• Challenge delay - argue that urgency has been lost through the claimant's conduct in delaying the application.
• Inadequate remedy argument - demonstrate that damages would be an adequate remedy for the claimant, making injunctive relief unnecessary.
• Unclean hands defence - show that the claimant's own conduct, such as breach of contract, disentitles them to equitable relief.

Setting Aside Injunction Applications

When an injunction has been granted without notice, you can apply to set it aside or vary its terms:

Grounds for Setting Aside:

• Material non-disclosure - failure to reveal facts that would have influenced the court's decision
• No serious issue to be tried - the underlying claim is fundamentally flawed
• Balance of convenience - the harm to you outweighs any benefit to the claimant
• Delay - the claimant waited too long before seeking relief
• Changed circumstances - new facts that alter the position

Procedure and Evidence: Applications must be made promptly, typically within days of becoming aware of the order. Provide comprehensive evidence addressing the original criteria and any material facts not disclosed. Consider whether to seek immediate variation of terms while preparing the full application.

Tactical Considerations: Decide whether to seek complete discharge or variation of terms to make compliance more manageable. Consider offering alternative undertakings that protect the claimant's position while reducing business disruption. Evaluate whether to seek expedited trial to resolve the underlying dispute quickly.

Risks of Defending Injunctions

Defending injunction applications carries significant risks that must be carefully evaluated:

Costs Risks:

• Unsuccessful resistance can result in substantial adverse costs orders
• Interim applications can generate costs disproportionate to the underlying claim value
• Consider whether commercial settlement might be more cost-effective than litigation
• Evaluate prospects of success realistically before committing to defence

Contempt Risks:

• Breach of injunction orders can result in committal proceedings and imprisonment
• Ensure absolute compliance with order terms while preparing defence
• Take immediate legal advice if compliance difficulties arise
• Document compliance efforts carefully in case of later challenges

Commercial Risks:

• Prolonged uncertainty can damage business relationships and operations
• Injunctions may trigger other contractual breaches or regulatory issues
• Consider reputational impact of public court proceedings
• Evaluate effect on financing arrangements and business partnerships

Strategic Options and Alternatives

Several strategic approaches are available when facing commercial injunctions:

• Compliance and Challenge: The safest approach is full compliance with the injunction while preparing applications to set aside or vary terms. This avoids contempt risks while preserving the right to challenge the order's validity.
• Negotiated Settlement: Consider whether commercial settlement might resolve the dispute more quickly and cost-effectively than lengthy court proceedings. Evaluate what undertakings or arrangements might satisfy the claimant's concerns while minimizing business disruption.
• Alternative Dispute Resolution: Mediation or arbitration may provide faster resolution than court proceedings, particularly where ongoing commercial relationships are involved. Some injunction orders specifically encourage or require ADR attempts.
• Expedited Trial: In appropriate cases, seek directions for expedited trial to resolve the underlying dispute quickly rather than enduring prolonged interim restrictions.
• Cross-Claims and Countermeasures: Consider whether you have claims against the applicant that might provide leverage in settlement discussions or justify cross-applications for relief.

Specific Compliance Issues

Different types of injunctions create specific compliance challenges:

• Freezing Injunctions require immediate disclosure of assets worldwide, notification of third parties, and careful management of living and business expenses within permitted limits. Breach can result in contempt proceedings and criminal sanctions.
• Search Orders involve supervised searches of premises with strict procedures for preserving privilege and confidentiality. Independent supervision and detailed protocols must be followed precisely.
• Confidentiality Injunctions require careful review of all business communications and materials to ensure no unauthorized disclosure occurs, often requiring staff training and system changes.

Court Procedures and Tactics

Understanding court procedures is essential for effective defence:

• Urgent Applications - may be heard within hours or days, requiring immediate preparation of evidence and legal arguments with out-of-hours applications to duty judges possible in exceptional circumstances
• Evidence Requirements - detailed witness statements addressing each element of the applicant's case, expert evidence where technical issues arise, and comprehensive documentary evidence supporting the defence position
• Hearing Strategy - challenge the applicant's evidence through cross-examination, present clear alternative narratives, and emphasize commercial consequences of continued restrictions
• Procedural compliance - ensure all court deadlines and filing requirements are met precisely to avoid procedural disadvantages
• Case management - seek appropriate directions for evidence, expert witnesses, and trial timetabling to support your defence strategy

How we can help

Our commercial injunction defence team provides comprehensive strategic support:

• Emergency response - immediate assessment and tactical advice for urgent injunction applications
• Evidence preparation - comprehensive witness statements and expert evidence to challenge applicant's case
• Setting aside applications - strategic applications to discharge or vary injunction orders with compelling legal arguments
• Compliance advice - detailed guidance on injunction requirements to avoid contempt risks while preparing defence
• Settlement negotiation - commercial resolution discussions to achieve practical outcomes while minimizing costs and disruption
• Court representation - experienced advocacy at urgent hearings and in complex commercial disputes