Freezing Orders & Injunctions Explained: A UK Director’s Guide to Risks & Responses

A freezing order, sometimes still called a Mareva injunction after the 1975 case that invented it, is a court order that locks your assets in place before trial. You cannot dispose of them, transfer them, charge them, or spend more than the ordinary-living allowance the order sets.

It is granted under CPR 25.1(1)(f) and section 37 of the Senior Courts Act 1981, usually without notice, and usually because a judge has been persuaded there is a real risk you will dissipate assets before the claimant gets judgment.

If you have just been served one, the calendar matters. You normally have seven days to the return-date hearing at which the order is reviewed. Every movement of money during that window is scrutinised. Breach is contempt of court, punishable by fine, seizure, or imprisonment.

What follows covers what the order actually locks down, what the ordinary-course-of-business exception really allows, how the order interacts with insolvency proceedings, and what your options are for challenging or varying it.

What a Freezing Order Actually Does

A freezing order is not a seizure, you still own the assets and they stay where they are. The order prohibits you from “removing from the jurisdiction or in any way disposing of, dealing with or diminishing” assets up to a stated maximum value. The standard form is annexed to Practice Direction 25A.

• Domestic freezing order, covers assets inside England and Wales. Bank accounts, real property, vehicles, company shares, inventory.
• Worldwide freezing order (WFO), covers assets everywhere. Courts grant WFOs where there is evidence the defendant has assets abroad and a real risk of dissipation. The claimant usually has to undertake not to enforce the order in a foreign jurisdiction without the English court’s permission.

Two consequences follow immediately. Your bank will freeze accounts the moment it is served or notified (banks are on hair-trigger notice). And you must serve an asset-disclosure affidavit, normally within 48 hours, listing every asset above a stated threshold, with values and locations.

The affidavit is evidence in the main proceedings; false disclosure is perjury as well as contempt. In our experience, directors underestimate how quickly the bank acts, and how complete the affidavit needs to be.

Why Courts Grant a Freezing Order

The test the claimant must meet is set out in the authorities, principally The Niedersachsen and Fiona Trust v Privalov. Four elements:

1. A good arguable case on the substantive claim. Not a trial on the merits, a reasonably arguable set of allegations.
2. Assets within the jurisdiction (or, for a WFO, abroad) that could satisfy an eventual judgment.
3. A real risk of dissipation. This is the decisive element. The court wants evidence that the defendant is not merely an ordinary debtor but someone who will move assets to defeat a judgment. Evidence often cited: offshore structures, sudden restructurings, unexplained transfers to family members, dishonesty allegations in the underlying claim.
4. The balance of convenience. The claimant undertakes in damages, to compensate the defendant if the order turns out to be wrong, and the court weighs harm to the defendant against harm to the claimant.

Freezing orders are usually made on a without-notice application. The claimant has a duty of full and frank disclosure, every material fact, including facts adverse to the claimant’s case. If the claimant omits something material, the order can be set aside at the return date purely on that ground, irrespective of the underlying merits.

Our experience is that this duty is breached more often than defendants realise, and pursuing it early is usually worthwhile.

Immediate Risks for Directors and Businesses

A freezing order against a trading company is a commercial emergency even when the substantive claim is weak. We see directors focus on the litigation and overlook the solvency question it triggers, often to their cost. The order itself triggers a chain:

• Bank disruption, accounts frozen immediately. Wages, VAT payments, supplier DDs all stop until the ordinary-course-of-business exception is clarified with the bank in writing.
• Supplier panic, word travels. Factors call in facilities, suppliers demand pro-forma terms, insurers review cover.
• Contempt exposure, every payment you make from now on is potentially a breach. Paying an old creditor who shouts loudest is not the “ordinary course of business”; it is a preference and a contempt.
• Wrongful trading exposure, if the company was already near the line on the insolvency test, a freezing order often tips it over. Trading on while unable to pay debts as they fall due is a section 214 wrongful trading exposure for every director who knows the position.
• Personal assets, if the freezing order names you personally (common in fraud claims, dishonest-assistance claims, and Serious Fraud Office applications), your salary, home equity, and family savings are all in scope.

Responding to a Freezing Order: The First 72 Hours

1. Read the order in full, paying particular attention to the asset cap (the maximum value frozen), the return date, the ordinary-course exception, the living-allowance figure, and the penal notice at the foot. Do not act on memory or on a summary someone else read to you.
2. Instruct specialist counsel the same day. Freezing-order work is a specialism; general commercial litigators will assemble a team but a silk familiar with JSC BTA Bank v Ablyazov and the Commercial Court freezing-order lists is what you want steering decisions.
3. Contact your bank in writing, acknowledging the order and proposing which outgoing payments fall within the ordinary course of business (wages, rent, statutory obligations, existing contractual commitments). The bank’s compliance desk wants paper, not phone calls.
4. Prepare the asset disclosure affidavit. Full and frank. Include assets held by nominees, trusts, offshore entities. A defective affidavit is the easiest route to contempt and the hardest to recover from.
5. Preserve documents. Email, WhatsApp, accounting system records. Standard litigation holds apply.
6. Assess solvency honestly. If the order makes the company unable to pay debts as they fall due, directors’ duties shift under BTI v Sequana, creditor interests must now be considered. A licensed IP conversation is prudent in parallel with the litigation response.

The Ordinary Course of Business Exception, What It Really Covers

Every standard-form freezing order permits payments “in the ordinary and proper course of business” and payments on reasonable legal advice and for reasonable living expenses. The limits of the exception are tighter than companies tend to assume.

• Wages, PAYE, VAT, Corporation Tax, rent, utilities, existing contractual commitments, generally within the exception, provided they are routine, quantified, and not advanced to defeat the order.
• Paying down specific pre-existing debts to preferred creditors, generally outside. This is the preference trap. A payment to your best supplier because you want to keep the relationship is not “ordinary course”.
• Legal fees, within the exception up to a cap (often £250,000 on substantial matters, but set on the face of the order). Bills above the cap require a separate application.
• Personal living expenses, the order names a weekly figure. Going over it is a breach unless varied by consent or by application.
• Large capital items, new vehicles, property purchases, investments: outside the exception. Needs an application to the court.

Ambiguity is resolved by application, not by assumption. A CPR 23 application to vary the order takes days, not months, and is materially cheaper than a contempt finding. Our team works with your litigation solicitors on these applications where the solvency angle needs to be factored in.

Freezing Orders and Insolvency, Where They Overlap

Freezing orders and insolvency proceedings interact in three practical ways that catch directors out.

• If you present a petition while frozen, a winding-up petition, an administration application, or your own CVL resolution, the freezing-order regime continues to bind you personally. The insolvency practitioner, once appointed, steps into the assets, but the director remains bound by the disclosure obligations and contempt risk.
• If a creditor presents a winding-up petition against the company, the Insolvency Act 1986 section 127 then bites in parallel with the freezing order. Post-petition dispositions are void unless the court validates them, which means the company cannot safely transact even on “ordinary course” payments without a validation order from the Companies Court.
• If the company is placed into administration or liquidation, the moratorium does not automatically discharge the freezing order against the company. The appointed IP usually applies to vary or discharge it so the estate can be realised.

A freezing order against a director personally survives corporate insolvency. The director’s personal disclosure obligations, personal living allowance, and personal contempt exposure continue regardless of what happens to the company.

For directors running several companies, this is the detail that tends to surprise most, and it is the point where our involvement alongside your litigation team adds the most value.

Challenging or Varying a Freezing Order

You have three standard routes:

• Set aside at the return date. The claimant must justify the order afresh. Your grounds: weak underlying claim, no real risk of dissipation, material non-disclosure at the without-notice hearing, disproportionate sum, availability of a less intrusive remedy (security for costs, caveat on land).
• Vary. Keep the order in place but change specific terms: raise the living allowance, uncap legal fees, permit a specific transaction, release a specific asset, reduce the sum frozen.
• Provide alternative security. A bank guarantee, payment into court, or charge over a specific asset up to the frozen sum. Once accepted, the freezing order is discharged.

Material non-disclosure is, in our experience, the most productive ground to push on in the first 14 days. Claimants applying without notice routinely overstate the risk of dissipation; they under-disclose settlement correspondence, commercial explanations for transactions the claim makes sinister, or prior failed attempts at security.

An affidavit from the defendant’s side reconstructing what the claimant knew and did not say is often decisive.

State Freezing Powers: POCA, UWOs, and HMRC

Freezing orders granted to private claimants under CPR 25 are only part of the picture. State-agency freezes operate under separate statutory regimes and carry different tactical considerations:

• Proceeds of Crime Act 2002, restraint orders in criminal cases; account-freezing orders (AFOs) in civil-recovery proceedings. Both bypass the standard CPR 25 framework and have their own disclosure regimes.
• Unexplained Wealth Orders (Criminal Finances Act 2017), used by the NCA, SFO, HMRC, and others against politically exposed persons and suspected serious-criminality defendants. Reverse the burden of proof on asset provenance.
• HMRC Security Deposits and Direct Recovery of Debts, HMRC can freeze accounts under the DRD regime (Finance (No. 2) Act 2015) for unpaid tax above £1,000 held in accessible funds above £5,000, without a court order.

A state freeze is not a private-party litigation move and you should not respond to it as if it were. For HMRC specifically, our HMRC enforcement action guide covers the DRD regime in detail. Where our involvement is relevant, it is usually on the insolvency and creditor-management side rather than the criminal-defence side, where specialist counsel leads.

Your Next Step on a Freezing Order

Two immediate calls, to specialist counsel and to an insolvency adviser, plus a written communication to the bank, are the minimum viable response within 24 hours of being served. A freezing order is reversible, narrowable, and sometimes discharged entirely on the return date; none of that happens without early, experienced input.

We have seen orders discharged in full at the return date where the without-notice application was inadequately supported; do not assume the order will stand.

Where the freezing order overlaps with cash-flow distress, creditor pressure, or a pending winding-up petition, call us free on 0800 074 6757. Our licensed IPs work alongside your litigation team so solvency, validation orders, and the ordinary-course-of-business exception are handled coherently rather than in isolation.

Freezing Order FAQs

Methodology & Disclosure

This guide is written by the Company Debt editorial team and reviewed by licensed insolvency practitioners who work alongside specialist commercial litigators on freezing-order cases.

Statutory and procedural references are to section 37 of the Senior Courts Act 1981, CPR Part 25 and Practice Direction 25A, the Insolvency Act 1986, the Proceeds of Crime Act 2002, the Criminal Finances Act 2017, and the Finance (No. 2) Act 2015 (DRD).

Case references cited reflect leading authorities at the time of writing.

Company Debt does not litigate freezing orders. Our role is to work with the director’s litigation team to handle the solvency, validation-order, and enforcement interaction. The 0800 number is a free confidential consultation on the insolvency and creditor-action elements; our licensed IPs can act the same day where the position is urgent.