Safeguarding Assets During Divorce and Financial Proceedings
In the context of divorce or financial disputes, there may be concerns that one party could dissipate or conceal assets to prevent equitable distribution. Freezing Orders, also known as freezing injunctions or Mareva injunctions, are legal mechanisms designed to prevent such actions, ensuring assets remain available for fair division. At Waely Law, our experienced solicitors provide expert guidance on obtaining and responding to freezing orders, protecting your financial interests during legal proceedings.
A Freezing Order is an interim injunction granted by the court to restrain a party (the Respondent) from disposing of or dealing with assets. Within divorce or dissolution proceedings, it is most commonly utilised by the Applicant to prevent the Respondent from frustrating the financial proceedings and attempting to hide and/or dissipate assets which the Applicant has a valid matrimonial claim upon.
These orders can apply to assets within England and Wales (domestic freezing orders) or, in certain circumstances, to assets held abroad through a Worldwide Freezing Order (WFO).
Freezing orders are typically sought in situations where there is a genuine risk that a party may dissipate, conceal, or dispose of assets to frustrate a potential or existing financial claim. Common scenarios include:
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Divorce Proceedings
To prevent a spouse from hiding or transferring assets before a financial settlement is reached.
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Financial Remedy Proceedings
To ensure assets remain available for enforcement of a financial order.
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Fraud Cases
To preserve assets that are the subject of a fraud investigation.
It’s important to note that freezing orders are considered a draconian measure and are not granted lightly. The applicant must present a strong, evidence-based case to justify their issuance.
To successfully obtain a freezing order, the applicant must satisfy the court of several key factors:
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Good Arguable Case
There must be a solid foundation for the underlying claim.
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Risk of Asset Dissipation
Evidence must show a real risk that the respondent may dissipate assets to frustrate any judgment.
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Assets Within Jurisdiction
Identifiable assets should exist within the jurisdiction that could satisfy a judgment.
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Just and Convenient
The court must be convinced that granting the order is fair and appropriate in the circumstances.
Additionally, the applicant is required to provide full and frank disclosure of all material facts and may need to give an undertaking in damages to compensate the respondent if it later transpires that the order was unjustified.
A freezing order can apply to a wide range of assets, including:
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Bank Accounts
Preventing withdrawal or transfer of funds.
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Real Estate
Restricting the sale or mortgaging of properties.
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Investments
Halting the sale or transfer of shares, bonds, or other securities.
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Personal Property
Such as vehicles, jewellery, or valuable artworks.
The order can extend to assets held solely by the respondent or jointly with others and, in certain cases, to assets held by third parties on behalf of the respondent.
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Legal Consultation
Seek immediate legal advice to assess the merits and risks of applying for a freezing order.
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Preparation of Application
Compile necessary documents, including an application notice, affidavit (or witness statement) detailing the claim and risk of dissipation, and a draft order.
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Without Notice Hearing
Applications are often made without prior notice to the respondent to prevent asset dissipation before the order is granted.
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Service of Order
Once granted, the order must be promptly served on the respondent and any third parties affected.
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Return Hearing
A subsequent hearing is scheduled where the respondent can challenge the order or agree to its terms.
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Yes. If there is a risk that assets may be moved overseas, a Worldwide Freezing Order (WFO) can be sought to prevent asset dissipation across different jurisdictions. However, these orders require additional legal steps and compliance with international law.
A Freezing Order is usually temporary and remains in place until:
- The court determines the financial settlement.
- The respondent successfully challenges it in court.
- The order expires or is lifted by the court.
If necessary, an order can be extended or modified depending on the case circumstances.
If a person ignores or breaches a Freezing Order, they may be held in contempt of court, which can result in fines, asset seizures, or even imprisonment. It is a serious legal offence to violate the terms of the order.
Yes. The respondent can apply to the court to challenge or vary the order if:
- The order was obtained unfairly or without full disclosure.
- There is no real risk of asset dissipation.
- The order places undue financial hardship on the respondent.
The court will review both sides’ arguments before deciding whether to uphold, modify, or discharge the order.
Costs vary depending on the complexity of the case. Legal fees include:
- Solicitor’s fees for preparing the application.
- Court fees for filing the order.
- Potential compensation if the order is later found to be unjustified.
At Waely Law, we make the legal process clear, efficient, and stress-free. Here’s what you can expect when you reach out to us:
