Do you need a freezing injunction to protect marital assets?
If you feel there is a danger that your spouse might be hiding assets and money in divorce, or is already disposing of assets before divorce, and this action is intended to deprive you of your rights to matrimonial wealth during a divorce financial settlement claim, a freezing injunction might be a suitable course of action.
A freezing injunction (also known as a freezing order) is an interim court order which can be granted under Section 37 of the Matrimonial Causes Act 1975 to prevent the dissipation of assets.
Speak to Wellers Law Group, so that our experienced divorce solicitors can listen to your concerns and explain the options available to you.
Disposal of marital wealth and financial misconduct
Before the court grants a freezing injunction, you will need to prove that your matrimonial wealth is at immediate risk and that any movement and/or disposal of assets is substantial enough to affect the size of the matrimonial pot to be divided in a financial settlement on divorce.
If proven, the court may consider any reckless, frivolous or unusual disposal of wealth by your spouse to be financial misconduct.
Some of the signs of asset disposal include:
- Abnormal spending and expensive spontaneous purchases
- Unplanned and extensive gifting to family and/or friends
- Unplanned, quick sales of property and investments
- Large cash withdrawals from savings accounts
- Unplanned and unexplained trips away and/or expensive holidays
- Unusual transactions on credit card statements
- You suspect funds are being transferred into hidden bank accounts
How do I put a freezing order in place?
You will need to apply to the court for a freezing injunction. In most cases, this will be ‘without notice’, in other words, your spouse or civil partner will not be informed of your application. This will prevent them from having time to dispose of assets before the court grants the freezing order.
You may be expected to attend at least one court hearing in person before the order is granted and there will be fees involved, however, the potential loss of significant assets is likely to far outweigh the cost of seeking a freezing injunction.
You will need to provide strong evidence that your spouse or civil; partner intends to hide or dispose of assets and that, without the order, you would suffer unfairly when the financial settlement on divorce comes before the court.
You will also need to prove that there are sufficient assets to meet your claim and you will almost certainly need to make an undertaking (solemn promise) to compensate your spouse or civil-partner in the event of any loss they incur should the freezing injunction be later set aside.
This ‘cross undertaking’ might include legal costs for the main proceedings, as well as the injunction application. If a third party suffers losses as a result of the freezing injunction, you also undertake to compensate them.
What can a freezing injunction protect?
Any asset to which a judgment may be attached can be frozen under a freezing injunction. For example:
- Bank accounts
- Property – real estate and land
- Shares and investments
- Valuable items such as cars, jewellery and artworks
It may be possible to seek a freezing injunction on assets held in trust for a beneficiary, however, this is more difficult and uncommon.
A domestic freezing injunction applies to assets held in England and Wales, while a worldwide freezing injunction applies to assets held overseas, although this type of order can be limited depending on the jurisdiction in which the assets are situated.
The importance of full financial disclosure in a freezing injunction application without notice
As the applicant, you must provide full and frank disclosure of all relevant information, including any material that may be unfavourable or potentially damaging to your own position.
If full disclosure does not occur and is not ongoing, the court can set aside the freezing injunction. You may also be ordered to pay for losses suffered by the other party whether or not the court decides to leave the freezing injunction in place.
The consequences of knowingly attempting to mislead a court are very serious and carry the risk of serious penalties, including criminal charges of perjury and contempt of court.
Contact the divorce solicitors at Wellers Law Group for expert legal advice
It is crucial to have expert legal advice when applying for a freezing injunction. Contact our Family Law team for more information.
We offer an initial fixed fee interview so that we can discuss your situation. Call 020 8464 4242 for our Bromley team, 01732 457575 for Sevenoaks, 020 7481 6393 for central London or 01372 750100 for our Surrey team. Alternatively, you can email an enquiry to firstname.lastname@example.org.