What is an injunction?
An injunction is simply a court order requiring someone either to do, or (more commonly) not to do something.
An injunction is a potential remedy where there has been a legal wrong (eg a breach of contract or negligence). An injunction is not a stand-alone legal right, but must always be linked to an underlying legal claim.
In two recent examples we have:
- Acted for a senior management team who had left their previous employer and were setting up a new, non-competitive business. The former employer applied on a without notice, emergency basis for an injunction seeking to prevent our clients from competing with it. The injunction sought to prevent our clients, if they were acting in breach of their obligations, obtaining an unfair competitive advantage against the claimant.
- Acted for a life sciences company seeking interim injunctive relief in relation to protestors at its site, both identified individuals and “persons unknown”. The injunction sought to prevent trespass, harassment, obstruction of the highway and so on, pending a final trial.
On notice or without notice
Interim injunctions can be sought either on notice to the respondent - usually the defendant to the underlying claim - or on a without notice basis. The latter is generally the approach where notifying the respondent of the application (either by a letter before action, or by issuing the application) would allow an unscrupulous respondent to evade the effect of the injunction by, say, destroying evidence or moving assets out of the jurisdiction.
An applicant which applies without notice is subject to a duty of full and frank disclosure to ensure that every relevant piece of evidence and argument, even those damaging to its application, are drawn to the court’s attention.
Therefore it is safest to apply on notice to the respondent, unless doing so would genuinely render the potential injunction useless.
In any case applicants must also give a binding undertaking that they will compensate the respondent if it turns out later that the injunction should never have been granted and the respondent has suffered losses.
In the case of our protest injunction, an order requiring protestors to keep 20 metres away from the access to our client’s site cannot realistically cause them any loss or damage, whereas an injunction restricting a respondent from carrying out its business can cause real and substantial damage.
What test does the court apply?
The court will adopt what is known as the American Cyanamid test.
This states that a court must apply a two-stage test, namely:
- Is there a serious issue to be tried?
- If so, what is the balance of convenience?
Regarding the latter point, this itself looked at in stages:
- Will damages be an adequate remedy for the applicant if it succeeds at trial? If so, then the court will not usually grant an interim injunction.
- If damages would not be an adequate remedy for the applicant, will the applicant's cross-undertaking in damages provide sufficient protection for the respondent if the court were to grant an interim injunction which later proves to have been wrongly awarded? If not, that points against the grant of interim relief.
- If there is doubt as to the adequacy of damages, the court will consider the balance of convenience more generally and look at the particular factual circumstances. Where such factors are evenly balanced, the court will often decide to grant the injunction so as to preserve the "status quo" pending a full trial, on the basis that the applicant’s cross- undertaking can compensate the respondent if it the injunction turns out to be unjustified.
Going to trial
On some matters, eg an application to restrain competition during a period of a restrictive covenant, the grant of an interim injunction will in effect conclude the litigation – the claimant is really seeking the temporary relief, and not damages (since the claimant must be saying that damages would not be an adequate remedy) and so an interim injunction will usually lead to a settlement of the dispute.
Some underlying damages claims may exist independent of the injunction (for instance, on our team move matter the claimant alleged damages arising from breaches of duty by our clients during their former employment).
However, on matters such as our protestor injunction, the issues must be dealt with at trial, where our client seeks final injunctions against named defendants, and against persons unknown and newcomers to the site. Such “persons unknown” injunctions are highly controversial, and enforcement can be extremely difficult, although such final injunctions remain possible.
The scope of injunctions
This is always going to be very fact specific. Even if the court is willing to grant relief, it should only impose such relief as is reasonably necessary to preserve the status quo, or stop the ongoing harm, and go no further than that. It will not want to grant an order preventing parties from doing something which is lawful.
In addition, even if the court is content in principle to grant relief, it will still be reluctant to make an order if in practical terms it cannot be enforced. Great thought therefore must be given at the outset as to how the applicant could police an injunction if granted.
Laser focus is required to tailor the application to the relief really being sought – do not try to obtain injunctions on weak parts of the claim if in practical terms a more straightforward injunction would stop most of the wrongdoing.
A breach of an injunction is breach of a court order. In most serious injunctions the order is endorsed with a penal notice, which warns those bound by the injunction that a breach may lead to proceedings for contempt of court and may result in a fine or imprisonment.
If a respondent breaches such an order, and the applicant can show to the criminal standard of proof that the respondent had been properly served with the order (usually personal service is required) and that the breach has occurred, then contempt may be found. The court treats seriously breaches of its orders, and punishments can be significant.
The necessity of proof to the criminal standard marks a real change to normal civil litigation, and you must therefore ensure that no evidential stone is left unturned to ensure that the court can conclude that the breach has been proved.
Arguments from the respondents that they did not mean to breach the order, or were not aware of it, go to what penalty they might receive.
Respondents can also try to “purge” their contempt - often a prompt apology to the court is very sensible!
Given the harsh penalties these applications are treated very seriously. Often the court will impose a suspended sentence on a first contempt. But if a respondent commits a further breach while subject to the suspension, then the suspension will be activated and the respondent will go to prison.
Various specific injunctions can often be applied for. Among the options are the “nuclear weapons” of the litigator’s arsenal, ie freezing orders (freezing a respondent’s assets) and search orders (allowing the applicant, under supervision, to go in and search the respondent’s premises), and such things as delivery up orders (requiring the respondent to deliver up evidence or property). These are beyond the scope of this note but are subject to their own special considerations.
Also beyond the scope of this note are the intricacies of obtaining and enforcing injunctions against “persons unknown” – these are difficult in that they envisage enforcing an against someone who was not a respondent to the application, is not a defendant to the claim and may not have had actual notice of the injunction. The courts police these injunctions assiduously, and in such cases difficult issues around contempt proceedings and the criminal standard of proof are magnified considerably.
Great care must be taken when defining classes of persons unknown when applying for an injunction, and even more care is required when “serving” the order on persons unknown. There are really difficult issues involved, and Mills & Reeve has considerable expertise with the technical and practical issues that are encountered.
This is one of the most difficult and evolving areas of injunction law, but without which effective enforcement of protest injunctions could be well-nigh impossible.
If you believe you do need specialist advice in relation to injunctions, please do contact us for further advice.