Tort Liability for Breaching Asset Freezing Injunctions

Extract

Where an asset freezing injunction is granted against a defendant in civil litigation it is usually essential to the enforceability of the order that it also binds any banks holding accounts to which the defendant is beneficially entitled. If the defendant, in breach of the injunction, disposes of assets subject to the order of the court, there may be few, if any, effective steps that can be taken against it. The defendant may not be amenable to the contempt jurisdiction of the court and may not fear being barred from defending the action (a suggestion of Lord Donaldson M.R. in Derby and Co. Ltd. v. Weldon (Nos. 3 and 4) [1991] Ch. 65, at 80-82). The ability to require the bank to preserve the defendant's assets is what really makes the injunction “stick’’.