A Freezing Injuction, known as an S37 or Section 37 Freezing injunction is an order made by the High Court or District Judges and Circuit Judges that prevents a person from disposing of or dealing with assets until the conclusion of a divorce or financial dispute.
A marriage coming to an end can sometimes prompt drastic behaviour relating to finances and marital assets such as attempting to spend significant sums of money or selling assets in order to prevent their former partner gaining financially following the divorce. In situations where your partner has, or you have grounds to believe that they intend to attempt this behaviour, it is crucial to seek specialist independent legal advice from a family law & 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 which stops a person from disposing/dealing with assets or for forces them to restore finances that have been compromised in some way. 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 is heighted suspicions and attempts to conceal or dispose of assets. Freezing Injunctions are therefore considered where the following has occurred or is about to:
1. Withdrawal of mortgage offset savings.
2. Attempts to transfer property to a third party.
3. Re-mortgages.
4. 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. Because of the cost consequences in wrongly applying for an injunction 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).