Brought to you by Summit Law LLP:
In the case of business disputes, an injunction can be the secret weapon. Stopping harmful behavior or compelling someone to meet their obligations can be invaluable assets. Obtaining an injunction is not as easy as ordering a coffee. Having no strategy is worse.
You won’t have a legal proceeding if you don’t have these challenges. Not every legal proceeding can go to court. You will have to prepare legal evidence, legal justifications, and prepare your justifications within a reasonable time.
What’s an Injunction Really About?
When You Actually Need One
Think of an injunction as a court order to someone telling them to “stop that right now” and “you need to do this thing.” You might need one when:
- A contract with you is breached and not resumed or repaired
- Confidential, secret information of yours is leaking out
- Restrictive covenants signed by ex-employees are being violated
The Two Types You Should Know
Injunctions come in two types:
- Interim or “quick fix” injunctions are used while awaiting the complete court proceedings
- Final “rest of the case” injunctions are used to clear the case permanently and are issued after all the terms are exhausted and negotiated.
In business, as in life, timing is everything. If you wait weeks to resolve the conflict, the judge will also assume that this is not a situation that deserves their time.
Getting Your Legal Ducks in a Row
When you desperately need protection and you’re planning how to apply for injunction, courts are looking at three big questions:
- Is your case actually worth hearing? We don’t want to waste anyone’s time, including your own.
- If an indemnity order is made, should you settle your case? If you think monetary compensation would satisfy the other party, they might not feel the need to seek an injunction.
- Equity considers what’s fair to all the parties involved. They are trying to figure out who’s going to feel the most pain and then trying to lessen that person’s pain.
You’ll need to give an ‘undertaking as to damages.’ This means you promise, “If I’m wrong, I’ll pay for any damages I caused.” You can warn the other party first or try for an emergency app, which is when you don’t have time to warn them.
Are the damages going to be irreversible? You need to act as if your business depends on it, because it probably does.
Building Your Case Like a Pro
Courts want to see the real deal:
- All your contracts and agreements
- Internal company records that back up your story
- Witness statements from people who saw what happened
- Any other evidence that proves your point
Here’s where people often mess up, don’t even think about hiding stuff. If they catch you, you’ll be paying the other side’s legal bills on top of everything else. Work fast – every day you waste makes it look less urgent and gives your opponent more time to build their defense.
What to Expect When You’re in Court
Each side is entitled to present its point of view. The judge has to look at what you’ve sent, pose (sometimes difficult) questions, and ultimately determine if he/she will satisfy your request, deny your request, or ask you to provide additional details.
Defying a court injunction can lead to court contempt, which may include hefty fines and even jail sentences due to the severity of the crime. The increasing tendency of people avoiding court orders has made the judges more severe in the punishment aspect.
You should consider the effect on your business before getting an injunction. The litigation process will negatively affect business relationships and hinder business cash flow.
The Money Talk – Costs and Risks
The practical aspect of this is:
On top of the £500 court fees, the injunction will cost you an additional £500. Solicitor fees begin at £500 and can go up to £15,000, whereas barristers charge £1,500 for every court appearance.
Keep in mind that should the other party win, you will be liable for the legal debt of £50,000 to £100,000. If the injunction is oppressive, you will have to pay additional damages. For 2023, there are reports of a 150% increase in legal applications, likely due to complex business environments.
Conclusion
In corporate conflicts, seeking an injunction can be a powerful legal step, though often challenging to secure. Companies must carefully weigh what is at stake and act swiftly when such measures are required. By taking prompt action, considering all legal implications, and depending on skilled legal counsel, firms can better protect their interests and navigate disputes with greater resilience.
