Table of Contents
As a business owner, you should be aware of injunctions and how your company can use them in a dispute. Your business creates and stores a large amount of information and documentation. Some of these materials include confidential information and intellectual property (IP) and are very valuable. Because of the importance of allowing companies to protect their sensitive information, our courts allow businesses to use injunctions in certain circumstances. Alternatively, you may require an injunction to prevent another party from moving assets out of the UK.
This article will explore the various situations in which your business could benefit from obtaining an injunction, so your company can act to protect its commercial interests.
What is an Injunction?
An injunction is a type of court order that either:
- bans a person or company from carrying out a certain action; or
- orders a person to perform a specific activity.
The first example is a prohibitory injunction, which prohibits an individual or business from doing something. These are common when a party wants to do something in breach of contract. For example, preventing a former employee from leaking trade secrets to the media.
The second example is a mandatory injunction, which imposes a mandatory action upon the individual or company. So, for example, it may compel a former employee to delete all digitally-stored company information from their personal devices and shred all physical copies.
Let us explore situations in which your organisation may seek an injunction below.
Prohibitory Injunctions
Additionally, many companies seek privacy injunctions to stop another party from disclosing trade secrets to a third party or the media. A trade secret is information unique to your company that could cause serious harm if leaked. For example, a bespoke recipe for a trademark food dish.
Prohibitory injunctions can be challenging to obtain as they significantly affect the other party. Whether that impact is a freezing order on bank accounts or preventing payment from a publisher or media outlet, a judge will usually require persuasion that the other party’s planned actions are unlawful and very serious.
Continue reading this article below the formCall 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Mandatory Injunction
In contrast, mandatory injunctions order a party to perform a particular action. For example, a search order injunction permits your company’s representatives to search for documents and materials before a court hearing. This is commonly used to find evidence when your business accuses a party of the theft of IP or trade secrets. Search order injunctions are highly invasive in nature and may involve accessing another company’s premises and IT servers. Therefore, they can be very difficult to obtain.
Business Considerations
On the one hand, an injunction is a useful method of stopping another party from acting in a way that harms your company. However, many business owners only seek injunctions sparingly. There are three main reasons for this include:
- they tend to be expensive and can cost tens of thousands of pounds to obtain;
- unsuccessful companies who fail to obtain an injunction face the real risk of being ordered to pay the costs of the other party; and
- injunction-related court proceedings can sometimes prove quite challenging to win.
Key Takeaways
Whilst injunctions can be helpful in English courts, you should only seek them where necessary. For example, if the dispute concerns your business’s significant financial or reputational value and you have an arguable case. Without these factors, they can often pose a sizeable financial and reputational risk to your organisation. Because of this, most business owners obtain legal advice on whether it is worth seeking an injunction. This advice usually looks not just at the financial and reputational costs but also at the time and effort the action would require of your business.
If you need advice on 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
A court can grant an interim injunction at an early stage in proceedings. For example, to stop a former employee from publishing a book whilst awaiting the court’s final decision at the final hearing. The final injunction tends to be permanent (barring any appeal).
Freezing injunctions can be very effective in avoiding the movement of the other party’s assets out of the country as long as you name the correct assets within your court action. They can be useful when the other party owes your business a sizeable sum.
We appreciate your feedback – your submission has been successfully received.
