A marriage coming to an end can prompt drastic behaviour relating to finances and marital assets, such as attempting to spend significant sums of money or selling assets to prevent their former partner gaining financially following a divorce.
In situations where you have evidence of such behaviours or grounds to believe that your partner intends to frustrate your financial claims, it is crucial to seek specialist independent legal advice from a family law and divorce solicitor about Section 37 Freezing Injunctions.
What is a Section 37 Freezing Injunction?
A Section 37 Freezing Injunction is a remedy that the Court can sanction in divorce/dissolution proceedings. It stops a person from disposing/dealing with assets or forces them to restore finances that have been compromised in some way until the conclusion of a divorce or Financial Remedy Proceedings.
Freezing Injunctions are used to ensure that a status quo is maintained so that one party is restrained from prejudicing another’s financial claims.
In what circumstances can a Section 37 Freezing Injunction be made in a divorce?
Although there is a settled principle in divorce/dissolution cases that there should be full and frank disclosure in resolving financial arrangements, sadly it is common that there are heightened suspicions and attempts to conceal or dispose of assets. Freezing Injunctions are considered where the following has occurred or is about to:
- Withdrawal of mortgage offset savings.
- Attempts to transfer property to a third party.
- Re-mortgages.
- Transfer of shares.
Whilst assets can be “frozen” legitimate dealings may be permitted so that existing direct debits, standing orders can be paid and funds used for ordinary living expenses, business transactions and legal fees.
What happens if a freezing injunction is wrongly applied?
Because of the draconian impact that a Freezing Injunction can have on a person’s financial standing, great care has to be given in considering whether it is in fact the appropriate remedy.
If a person has wrongly applied for a Freezing Injunction, they could be ordered to pay damages to compensate the other party. The costly consequences of wrongly applying for an injunction means that other less adversarial steps - such as warning letters, bank sanctioned freezes and Land Registry applications - should not be ruled out as first steps to resolve matters. However, circumstances and timings may mean that this is not always possible.
Breach of a Freezing Injunction
Breaching the Freezing Injunction would put a party in contempt of court and they would be at risk of having their assets seized, being fined, a community order or even a custodial sentence. The same sanctions apply to third parties who willingly assist others in breaching court orders.
Freezing Injunctions can have wide reaching implications and so can only be applied for with good reason. However, if an injunction is necessary and time is of the essence, it is important to act very quickly.
Whether you are seeking a Freezing Injunction or are the subject of one, you will need specialist legal advice.
For help and advice on this topic or related issues, please contact Kiran Beeharry by calling 01727 798047 or emailing kiran.beeharry@salaw.com.
