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As a business owner, you must be aware of the legal options you can seek in a dispute. Your business is home to many documents ranging from commercial contracts to intellectual property and confidential information. The theft or leaking of these documents can cause significant harm to your company. Because of this, companies have a legal remedy to prevent individuals or third parties from disclosing their valuable information, known as an injunction. Injunctions come in all shapes and sizes, depending on the court order your business seeks. This article will explore the different types of injunctions, so you know when to consider making an application to start injunctive legal proceedings.
What is an ‘Injunction’?
The two primary forms of injunctions are:
- mandatory injunctions which force a party to perform a specific action; and
- prohibitory injunctions, which force a party to avoid performing a particular activity.
So, for example, a prohibitory injunction could stop a former employee from disclosing confidential information about a trade secret. On the other hand, a mandatory injunction could require them to disclose all documents obtained from employment to check for theft of confidential information.
You should seek injunctions sparingly as they are very expensive, and if you lose, you may have to pay for the other party’s legal fees defending the injunction. There are several types of injunctions, which we will explore further below.
1. Freezing Injunction
This is a prohibitory injunction, which your company can use to stop the other party from moving funds outside the United Kingdom. For example, your company may seek this type of injunction if it believes that a business debtor is planning to move money abroad to avoid payment under a contract or court judgment. Subsequently, your organisation can request the freezing of various assets including:
- company property;
- work equipment and machinery;
- company vehicles; and
- bank accounts.
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2. Privacy Injunction
This is another prohibitory injunction. Your business can use a privacy injunction to stop another party from publishing or disclosing your confidential information or trade secrets. A judge may grant this injunction if your business can demonstrate why disclosure or publication would be unlawful. For example, you may argue the information constitutes a trade secret and, therefore, the court should ban disclosure by that party.
3. Search Order Injunction
Search orders are mandatory injunctions because they force another party to perform a specific order. In this case, a court will order the other party to allow your company’s representatives to search for documents and materials ahead of a trial.
4. Disclosure Order Injunction
This is a less severe mandatory injunction, similar to a search order. It requires the other party to make all reasonable efforts to search for relevant documents and disclose them to your company. For obvious reasons, this is common within active court proceedings. It allows the parties to obtain evidence from the other business to assist the court and your company’s case. The threshold for obtaining this form of injunction is lower than a search order because it is less severe and invasive to the other party.
Important Considerations
It is essential to obtain expert legal advice on this topic, whether it concerns interim injunctions or final injunctions. This is primarily due to the excessive cost and risk involved with an injunction process. Your company should therefore ensure it has a strong case before proceeding.
Furthermore, it is worth considering whether it is worth the time, effort and stress for you and your organisation. You must demonstrate to a court that the injunction is urgently required to protect your company in a crucial matter. This can be an intensive and expensive process. Additionally, you should consider the litigation risk. Litigation risk is a quick way of summing up the risk of losing your legal claim.
Key Takeaways
The two main types of injunctions are mandatory and prohibitory. Mandatory injunctions compel a party to perform an action, and prohibitory injunctions prevent them from taking action. Amongst these two broad categories, you may seek a specific type of injunction to suit the issue you wish to resolve. However, when considering whether to pursue an injunction, your business should factor in the associated effort, expenses, and litigation risks.
If you need help weighing up potential injunctions, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Are there other forms of injunction?
Yes, albeit there are too many to mention within a short article. Other forms of injunctions include insolvency injunctions and injunctions further to an alleged breach of contract.
Why do lawyers mention litigation risk?
Because your decision to seek an injunction claim against another party will differ depending on whether your lawyers state it is likely to win or lose. This is not just a matter of reputation but protecting your company’s finances from having to pay damages to another party upon defeat.
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