Civil Fraud and Asset Recovery
When a business or individual is subjected to fraud, the immediate priority is not litigation but preservation of assets. Funds and property dissipate quickly, and a judgment is of little value if there is nothing left to enforce against. Effective recovery therefore depends on acting decisively.
Securing Assets
The court provides a range of urgent remedies designed to prevent a wrongdoer from removing or concealing assets while a claim is pursued. Speed is critical, and applications are commonly made without notice to the defendant so that assets cannot be moved in anticipation.
Freezing injunctions restraint a defendant from dealing with their assets, whether within the jurisdiction or, where appropriate, worldwide. To obtain one, an applicant must demonstrate a good arguable case, a real risk that assets will be dissipated, and that it is just and convenient for the order to be made. The applicant must give full and frank disclosure to the court and provide a cross-undertaking in damages.
Disclosure orders compel third parties, most often banks, to reveal information needed to identify wrongdoers and locate misappropriate funds, enabling recovery to proceed even where the fraudster’s identity or the destination of money is initially unknown.
Tracing misappropriated assets
Where funds or property have been moved, the law allows them to be traced into the hands of those who now hold them, and into the assets into which they have been converted. A proprietary claim of this kind can be pursued against recipients of the proceeds, including those who knowingly assisted in the fraud or received assets with knowledge of their origin. Tracing is frequently the mechanism by which value is ultimately restored to the victim.
Recovery across jurisdictions
Worldwide freezing orders are routine features of substantial fraud recovery, however these require early strategic decisions.
How Lyon Croft Law can help
We act of for businesses and individuals across Park Royal and West London, who have suffered loss through fraud and dishonesty. We move quickly to secure assets and preserve evidence, and we advise on the most effective route to recovery. Where urgency demands it, we are able to bring an application before a court at short notice.
This article has been authored by Abdullah Suker. It is intended for general information purposes only and does not constitute legal advice.
Lyon Croft Law Commercial Solicitors, Park Royal, London [020 3576 7170] [info@lyoncroft.co.uk]
Frequently asked questions
What is a freezing injunction?
A freezing injunction is a court order preventing a defendant from dealing with or disposing of their assets, either within England and Wales or worldwide. It is intended to ensure that assets remain available to satisfy any judgment ultimately obtained.
How quickly can a freezing injunction be obtained?
In urgent cases an application can be made to the court at very short notice, sometimes within hours, and usually without notice to the defendant. Prompt instruction is essential, as the value of the remedy depends on acting before assets are moved.
What must be shown to obtain a freezing injunction?
The applicant must establish a good arguable case on the underlying claim, a real risk that assets will be dissipated, and that it is just and convenient for the order to be granted. The applicant must also give full and frank disclosure to the court and provide a cross-undertaking in damages.
Can assets be recovered if they have been moved abroad?
Yes. Worldwide freezing orders, proceedings in other jurisdictions and the enforcement of judgments overseas are routinely used to recover assets that have been transferred outside England and Wales.
Can a claim be brought against someone other than the person who committed fraud?
Often, yes. Claims may be available against those who knowingly assisted in the fraud and against parties who received misappropriated assets with knowledge of their origin, as well as against banks and other third parties for disclosure.
Is there a time limit for bringing a fraud claim?
Time limits apply, although in cases of fraud or concealment the limitation period may not begin to run until the fraud is, or could reasonably have been, discovered. Despite this, early action remains critical to securing assets before they are dissipated.
