4. Interim Application

Question 1

What is the purpose of summary judgment?

Answer 1

The element relating to summary judgment explains that an application for summary judgment is a particular type of interim application where the applicant is inviting the court to dispose of a particular claim or issue without the need for a full trial – because one party’s position in relation to that claim or issue is very weak. You will explore what needs to be shown before the court will do this, and how the procedure explained in the interim applications element is modified for this particular procedure.

Question 2

What is an interim application?

Answer 2

Interim applications are applications for orders or directions made to the court, usually in the ‘interim’ period between the commencement of proceedings and trial, although some interim applications can be made before the commencement of proceedings.

Examples of interim applications are varied, but include:

• extending the time period for taking a particular step in the proceedings (like filing a defence)
• applying to amend a statement of case
• requiring the other party to provide further information
• requesting specific disclosure of a document
• seeking permission to rely on expert evidence.

Interim applications can be made by any party.

Question 3

When should an interim application be made?

Answer 3

In accordance with the overriding objective, parties should take a reasonable approach to trying to agree matters to avoid the need for an application to court, or to make such an application less contentious.

However, as soon as it becomes apparent that it is necessary or desirable to make an application, the party should apply (23A PD 2.7).

Some applications could be dealt with at the same time as the case management conference or, if closer to trial, at the pre-trial review.

Parties are under a specific obligation to ‘bunch’ their interim applications (23A PD 2.8). If a hearing has been fixed for whatever reason, it is up to the parties to issue any necessary applications to ensure that outstanding matters get dealt with at a single hearing wherever possible.

Question 4

Procedure

Answer 4

The party making the application, whether or not they are the claimant or defendant in the proceedings, is called the applicant. The other party is the respondent.

The process of making an application begins by the applicant filing an application notice (Form N244) at court. The application notice states (CPR 23.6):

• Who is making the application
• What order the applicant wants
• Why the applicant is asking for that order
• What information the applicant relies on in support of the application.

A court fee is payable to issue the application notice.

The application should be made to the court in which the main claim is presently being dealt with or, in the case of pre-action applications, is likely to be dealt with (CPR 23.2).

You can see an example of a blank application notice (N244) on the next page – this is to aid your understanding of this element, you are not expected to know this form.

[element displays Form N244 – application notice]

Question 5

Evidence, draft order and issue

Answer 5

Sometimes the CPR provides that a particular type of application must be supported by particular evidence. However, even in cases where evidence is not strictly required, it is advisable to provide evidence (23A PD 9.1), in order to satisfy the court that the order sought should be granted.

Evidence can be given in one of three ways:

• In the application notice itself (Part C, in which case the statement of truth must also be completed (23A PD 9.7))
• By referring to the existing statements of case
• In a witness statement (or, if required, affidavit).

The applicant should also file a draft order at court setting out the terms it is seeking.

The applicant takes or sends to the court the application notice, evidence and draft order. The court issues the application and provides a notice indicating the date and time that the application will be heard by the court.

Question 6

Serving the application

Answer 6

The application notice, note from the court indicating the date and time of the hearing, evidence and draft order must be served on the other party after the application has been issued by the court (CPR 23.7).

The court may serve the application notice and supporting documentation, but in practice, the applicant’s solicitor usually serves the application notice for certainty and to retain control.

Service must be effected as soon as practicable after the application is filed and not less than three clear days before the application is to be heard (CPR 23.7). This is the general rule and some applications have their own special time limits for filing evidence, for example summary judgment (CPR 24). The rules on how to calculate time apply to these deadlines (CPR 2.8).

Question 7

Further evidence

Answer 7

The respondent may wish to file evidence in the form of a witness statement (or, if the CPR require it, an affidavit). This evidence must be filed and served as soon as possible (23A PD 9.4) and in accordance with any specific timings stated by the court when it issued the application notice.

If the applicant wishes to bring further evidence in reply to the respondent’s evidence, this must be filed and served as soon as possible (23A PD 9.5) and in accordance with any specific timings stated by the court.

A statement of costs in relation to the application should also be filed and exchanged not less than 24 hours before the hearing (44 PD 9.5).

Question 8

Hearing

Answer 8

Most interim applications are dealt with at a hearing.

In accordance with the overriding objective, the court may order that a hearing should take place by telephone (23A PD 6 and 7), most commonly if the hearing is expected to last no more than on hour, or exceptionally by video conference.

It is, however, possible for matters to be dealt with in the absence of a hearing if (CPR 23.8):

• The parties have agreed the terms of the order (in which case they should send in a ‘consent order’ – a order in the agreed form, signed on behalf of each party);
• The parties agree there should be no hearing; or
• The court does not consider a hearing appropriate.

Once the court has considered the application, the court will make its decision and the order will be drawn up, sealed and served by the court.

Question 9

Without notice applications

Answer 9

The procedure set out above is the normal procedure for interim applications. It is an ‘on notice’ or ‘with notice’ procedure because the respondent is served with the application before the hearing, and has opportunity to file evidence in response, and to attend a hearing.

An alternative procedure is to make an application ‘without notice’ – without serving the application notice on the respondent. This is permitted only if (23A PD 3):

there is exceptional urgency (for example, a remedy is needed immediately);

the overriding objective is best furthered by doing so;

all parties consent;

the court gives permission;

a court order, rule or practice direction permits; or

a date for a hearing has been fixed, a party wishes to make an application at that hearing, and the party does not have sufficient time to serve an application notice. In this case, the party should still inform the other party and the court (if possible in writing) as soon as he can of the nature of the application and the reason for it.

Question 10

Without notice hearings - procedural safeguards

Answer 10

To mitigate the risks of unfairness in making an application without notice:

• The application must explain why no notice is given;
• The applicant must draw to the court’s attention arguments and evidence in support of the (absent) respondent’s position.
• The applicant must serve the respondent as soon as possible after the hearing, whether or not the court has granted the relief sought. The documents the applicant must serve on the respondent are:

a. The application notice

b. The evidence in support

c. The order (CPR 23.9).

• The court order must contain a statement of the respondent’s right to make an application to set aside or vary the order. Any application to set aside must by made within 7 days of the order being served on the other party (CPR 23.10).

Question 11

What is the purpose of summary judgment?

Answer 11

The purpose of summary judgment is to enable the court to dispose of claims or issues without the need for a full trial (CPR 24.1).

If summary judgment is granted on an issue, that issue is no longer considered at trial. This saves costs.

Summary judgment furthers the overriding objective because it allows the court to deal with weak cases or issues proportionately and expeditiously.

Either party can apply for summary judgment if it considers that the other party’s position in relation to the claim or particular issues is sufficiently weak.

Question 12

What is the difference between summary judgment and strike out?

Answer 12

There is considerable overlap between the two provisions. Many cases fall within both strike out (CPR 3.4) and summary judgment (CPR 24). It is often appropriate for a party to combine these two applications.

The court can strike out the whole or part of a statement of case which discloses no reasonable grounds for bringing or defending a claim (CPR 3.4(2)(a)), or which is an abuse of the process of the court or otherwise likely to obstruct the just disposal of the proceedings (CPR 3.4(2)(b))(there are also other grounds for strike out). The court may give summary judgment against a claimant or defendant where that party has no real prospect of succeeding on their claim or defence (CPR 24.2).

Question 13

What is the difference between summary judgment and default judgment?

Answer 13

Judgment in default can be the consequence of the defendant failing to respond to a claim. Judgment in default is therefore procedural: if a defendant fails to file an acknowledgment of service and/or a defence in accordance with the CPR time limits, the claimant can obtain judgment in default by either request or application (depending on the nature of the claim). The court does not consider the merits of the case when ordering judgment in default.

Question 14

Grounds for summary judgment

Answer 14

What must be established in order for the court to dispose of a claim or issue without the need for a trial?

The grounds for summary judgment are (CPR 24.2):

A:

The claimant has no real prospect of succeeding on the claim or issue;

OR

The defendant has no real prospect of successfully defending the claim or issue.

And B:

There is no other compelling reason why the case or issue should be disposed of at trial.

Question 15

What does ‘no real prospect’ mean?

Answer 15

It means the position is fanciful, imaginary or false.

To defeat the application, the respondent does not have to show that its case will probably succeed; just some chance even if it is improbable. The word real means more than merely arguable.

Examples of compelling reasons (re “There is no other compelling reason why the case or issue should be disposed of at trial”)

Defendant needs more time to investigate

Expert evidence is required

Multi-party litigation

Scrutiny of key documents is required

Defendant has a right to trial by jury eg fraud

(this is not an exhaustive list)

The evidence required

The evidence supporting an application for summary judgment must address the grounds set out above.

The application notice or supporting evidence (usually a witness statement) must also:

• Identify concisely any point of law or provision in a document on which the applicant relies; and
• State the application is made because the applicant believes that on the evidence the respondent has no real prospect of success and knows of no other compelling reason why the claim / issue should be disposed of at trial.

Question 16

Who can apply for summary judgment and when?

Answer 16

Claimant- After the defendant has filed an acknowledgement of service or defence (or earlier with the court’s permission)(CPR 24.4)

Defendant - Can apply anytime after proceedings have commenced.

Court - Can fix hearing of its own initiative (CPR 1.4(2)(c) and CPR 3.3).

Ideally, the claimant or defendant should apply for summary judgment either before or at the same time as filing the Directions Questionnaires to avoid incurring unnecessary costs (26 PD 5.3(1)). If the application is made on filing Directions Questionnaires, the court will delay allocating the matter to a track until after the summary judgment hearing.

Question 17

Who can apply for summary judgment and when?

Answer 17

If the claimant fails to comply with a relevant pre-action protocol, the application for summary judgment by the claimant will not normally be considered before the defence has been filed or time for doing so has expired (24 PD 2(6)).

The effect of a summary judgment application is to create a pause in the proceedings while the application is being decided so that:

• If the claimant applies for summary judgment before the defendant has served a defence, the time for the defendant to file a defence is extended until after the hearing (CPR 24.4(2)).
• If the defendant applies for summary judgment, the defendant does not have to file either an acknowledgement of service or a defence until after the summary judgment hearing.

If a party applies for summary judgment, then the normal rules relating to interim applications apply (see the element relating to interim applications) subject to modifications / additional requirements set out on the following pages. On the following page the text struck through, in red, shows the ‘normal’ rules.

Question 18

How to make an application for summary judgment

Answer 18

Issue:

• Application notice (form N244)
• Supporting evidence
• Draft order
• Fee

Service (at least 14 days before the hearing):

• Application notice (form N244)
• Supporting evidence
• Draft order
• Notice of hearing date

Further evidence:

• Respondent files at court and serves on the applicant evidence at least 7 days before hearing
• Applicant files at court and serves on the respondent evidence in reply at least 3 days before hearing

Both parties file and exchange statements of costs not less than 24 hours before hearing.

Hearing

Question 19

The application notice

Answer 19

The application notice must:

• Include a statement that it is an application for summary judgment under Part 24; and
• Direct the respondent’s attention to the CPR which require the respondent to file and serve any evidence at least seven days before the summary judgment hearing (24PD 2).

These provisions make it clear to the respondent what is at stake in the application and how the respondent can oppose the application. This is particularly important because an application for summary judgment has particularly significant potential consequences.

Question 20

Potential orders at the summary judgment hearing

Answer 20

Dismissal of the application

The application fails. The issues must continue to trial. The court will give directions to take the claim forward.

Dismissal of the claim

If the defendant applies for summary judgment and succeeds, the claim is dismissed. The defendant has ‘won’.

Judgment on the claim

If the claimant applies for summary judgment and succeeds, then judgment is entered for the claimant: the claimant has ‘won’.

Conditional order

The judge has decided that the respondent may succeed but it is improbable that it will do so: the court will refuse summary judgment and allow the respondent to continue only subject to conditions ordered by the court, such as paying a sum of money into court.

Note: The outcomes on this page assume the application related to the whole claim. It could relate only to specific issues, in which case the same principles apply to the issue concerned.

Question 21

What is the purpose of interim payment?

Answer 21

Key definition: An interim payment is a payment on account of damages, debt or other sum (except costs) which a defendant may be held liable to pay to a claimant (CPR 25.1(1)(k))

A claimant may wish to ask for an interim payment to assist it financially in the interim period prior to settlement/trial, for example, in a personal injury claim. Any payment would be made on account of damages.

Note that an application for interim payments is made by the claimant.

Conditions to be satisfied

The court will only make an order where any of the following conditions are satisfied:

• The defendant has admitted liability to pay damages (or some other sum of money) to the claimant.
• The claimant has obtained judgment against that defendant for damages to be assessed (or for a sum of money other than costs) to be assessed.
• It is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money against the defendant from whom he is seeking an order for an interim payment, whether or not that defendant is the only defendant or one of a number of defendants to the claim.

There are also two further conditions relating to cases where the claimant is seeking an order for possession of land or where the claimant is seeking an order in a case where there are two or more defendants, but these are beyond the scope of this element.

Question 22

Evidence

Answer 22

The applicant must provide evidence alongside its application. The evidence must deal with the following (25B PD 2.1):

• The reasons for believing that the conditions for making an interim payment are satisfied;
• The sum of money for which final judgment is likely to be given;
• The sum of money sought by way of an interim payment;
• The items or matters in respect of which the interim payment is sought;
• Any other relevant matters;
• In claims for personal injuries, details of special damages and past and future loss; and
• In claims under the Fatal Accidents Act 1976, details of the person(s) on whose behalf the claim is made and the nature of the claim.

Any documents in support of the application should be exhibited, including, in personal injuries claims, the medical report (25B PD 2.1).

Question 23

Procedure

Answer 23

A claimant seeking an interim payment would make a request for a voluntary payment from the defendant first. If the defendant does not agree, for example if it is defending the claim, the claimant would make an application to the court for an interim payment (CPR 25.7).

Although the claimant can make a request to the defendant for a voluntary interim payment at any stage in the proceedings (including pre-action), the claimant cannot apply to the court for an interim payment before the end of the period for the defendant filing an acknowledgment of service (CPR 25.6(1)).

The claimant can make more than one application for an interim payment order.

If the claimant applies for an interim payment, then the normal rules relating to interim applications apply (see the element relating to interim applications) subject to modifications / additional requirements set out on the following pages. On the following page the text struck through, in red, shows the ‘normal’ rules.

The court must not make an interim payment of more than a reasonable proportion of the likely amount of the final judgment, taking into account any contributory negligence, set-off or counterclaim – (CPR 25.7). It may order payment in instalments.

Restrictions

Unless the defendant agrees, an interim payment made by a defendant in the course of the proceedings (whether voluntarily or by court order) will not be disclosed to the trial judge until all questions of liability and quantum have been decided (CPR 25.9).

Question 24

What is the purpose of security for costs?

Answer 24

Key definition -Security for costs is an application made by a person in the position of defendant (the applicant) who is concerned that the claimant (the respondent) will not be willing / able to pay the defendant’s costs should the claim be successfully defended (CPR 25.12). The court can order that security be given in various ways, but most commonly it requires a payment into court by the claimant, so that those funds are available to meet any costs order later made in the defendant’s favour.

Note that security for costs relates solely to the costs of the claim, not the level of damages which may be awarded.

An application can be made:

• By a defendant against a claimant (which is the usual case)
• By a claimant against a defendant in respect of a counterclaim
• By a third party against a defendant in respect of anadditional claim (CPR 20)

Question 25

Grounds for security for costs

Answer 25

The defendant must satisfy the court of two matters before an order for security for costs can be made:

Having regard to all the circumstances of the case, it is just to make an order (CPR 25.13(1)(a))

and

One or more of the prescribed conditions in the rules are satisfied (CPR 25.13(1)(b) and (2))

As with any interim application, the court will also consider the overriding objective and, therefore, whether it would be dealing with the case justly and at proportionate cost by making a security for costs order.

We will consider the conditions first before moving on to what is ‘just’.

Question 26

Prescribed conditions for security for costs

Answer 26

The claimant is resident out of the jurisdiction (but is not resident in a State bound by the 2005 Hague Convention) (CPR 25.13(2)(a))

The claimant is a company and there is reason to believe it will be unable to pay the defendant’s costs if ordered to do so (CPR 25.13(2)(c))

The claimant has taken steps in relation to its assets that would make enforcement of a costs order against it difficult (CPR 25.13(2)(g))

Other grounds:

• The claimant has changed address since claim was commenced with a view to evading the consequences of the litigation (CPR 25.13(2)(d)).
• The claimant failed to give an address in the claim form (CPR 25.13(2)(e)).
• Claimant is acting as a nominal claimant and there is reason to believe it will be unable to pay the defendant’s costs if ordered to do so (CPR 25.13(2)(f)).

Question 27

‘Claimant resident out of the jurisdiction’ condition

Answer 27

The claimant is resident out of the jurisdiction (but is not resident in a State bound by the 2005 Hague Convention)(CPR 25.13(2)(a))

Meaning of resident:

For an individual this is their habitual or normal residence.

For a company this is where the company’s central management and control is exercised and it is usually, but not necessarily, where it is incorporated.

Meaning of out of the jurisdiction:

Essentially, this means not in England and Wales. The rationale for this requirement is that the defendant may have greater difficulty enforcing any costs order if the claimant is not in England or Wales. Security for costs is not available under this ground if the claimant is resident in a state bound by the 2005 Hague Convention, which at the time of writing includes the UK, all EU members states, Mexico, Singapore and Montenegro. This is because there are some (albeit limited) reciprocal arrangements between these states which would ease the enforcement of a costs order. This is a recent (ie post-Brexit transition period) change and exactly how it will operate in practice remains unclear.

Question 28

‘Impecunious claimant company’ condition

Answer 28

The c**laimant is a company and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so (CPR 25.13(2)(c))

The claimant must be an impecunious company; not an impecunious individual.

The defendant must show: a) The company’s inability to pay costs; and b) the amount of the likely costs.

The defendant must show the company ‘will be unable’ (as opposed to ‘may be unable’) to pay its debts when the order is made against it. However, the defendant does not have to show on a balance of probabilities that the claimant company is unable to pay – the defendant may be able to show that there is ‘reason to believe’ that the claimant company will be unable to pay even if the claimant company can adduce substantial evidence to the contrary (Jirehouse Capital v Beller [2008] EWCA Civ 908). This makes security for costs more available for defendants.

Question 29

‘Claimant moving assets’ condition

Answer 29

The claimant has taken steps in relation to its assets that would make it difficult to enforce and order for costs against it (CPR 25.13(2)(g))

The purpose of this condition is to prevent injustice to a defendant where the assets available to enforce any order for costs have been or are being put beyond the reach of enforcement, for example, the dissipation of assets, the transfer overseas or into the names of third parties or the transfer to places unknown to the defendant.

Question 30

The court’s discretion

Answer 30

Even if one of the prescribed conditions is made out, the court is not obliged to give security; security will only be granted by the court if:

it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order.

Main consideration

The main consideration that the court will take into account is the ability of the respondent to comply with any order for security for costs. The court should not normally make the continuation of a claimant’s claim dependent on a condition which it is impossible for the claimant to fulfil, because this effectively restrict the claimant’s access to the justice system. An impairment of a claimant’s right of access which is disproportionate to the need to protect the defendant is likely to be a breach of Article 6 ECHR (right to a fair trial). The court has the difficult task of balancing the potential injustice to the claimant in being prevented from carrying on with the claim if it cannot pay the security as against the injustice of the defendant being at risk on costs if no security is provided. This is likely to be particularly problematic where the basis for the application is the claimant’s impecuniosity.

Other considerations

Apart from the ability to comply with the order, the court will look at other factors (Sir Lindsay Parkinson v Triplan [1973] 2 All ER 273). For example, admission of liability by the defendant or substantial open offers (those the court can be made aware of) will make the defendant’s application less likely to succeed. Delay also makes the application less likely to succeed – the application should be made promptly, as soon as the facts underpinning the application are known. A claim which appears not to be genuine, or which has little prospects of success, will make the defendant’s application more likely to succeed. If the defendant has itself been responsible for the claimant’s financial difficulties, this will make the application less likely to succeed

Question 31

Procedure

Answer 31

If a party applies for security for costs, then the normal rules relating to interim applications apply (see the element relating to interim applications).

In addition, note that:

• The application notice should state which ground(s) or enactment applies
• The application must be supported by written evidence (CPR 25.12(2)). Evidence will normally be given by way of witness statement which should cover:

a. The ground eg for the impecunious company ground, the witness statement is likely to exhibit the accounts to show the claimant is unable to pay

b. The factors in the exercise of the court’s discretion

c. The likely costs to trial eg the witness statement is likely to exhibit a statement of costs or to refer to an approved costs budget

d. The amount of security requested.

Question 32

Amount of security

Answer 32

If the court makes an order for security for costs it will determine the amount of security as well as the manner in which and the time within which the security is given (CPR 25.12(3)). The amount is entirely within the court’s discretion and the court will fix a sum it thinks just taking into account:

• The amount of the defendant’s likely costs
• The security can be for the whole action or up to a point in time eg up to disclosure
• The amount can cover costs incurred (including pre-action) and future costs
• A deduction can be made for the likely reduction upon assessment of costs or the possibility of settling
• Other factors eg delay may mean that security is not given for costs already incurred but is given for future costs.

Question 33

Type and timing of security

Answer 33

The manner in which security is given can be:

• A payment into court
• A payment to the defendant’s solicitor
• A bank guarantee
• An undertaking to pay costs

The most frequent order is for a sum to be paid into court by a required date.

Question 34

What is the purpose of an interim injunction?

Answer 34

An injunction is an order of the court requiring a party to do or to refrain from doing a given act. Breach of an injunction is potentially punishable as contempt of court, so breach can result in a fine and/or imprisonment.

An interim injunction is a temporary measure taken at an early stage in the proceedings (including pre-action) before trial and before any final decision on the merits of either party’s case to restrain the respondent from causing irreparable or immeasurable damage to the applicant by continuing conduct or ceasing conduct that has led to the dispute. It is usually made in circumstances of urgency and lasts until trial or further order.

A perpetual injunction is a final injunction (usually made at trial) that continues with no limitation of time. These are not covered in this element.

Question 35

Types of interim injunction

Answer 35

Prohibitory injunction: Requires the respondent to refrain from doing an act eg An employer has brought a claim against an employee for breaching a confidentiality clause in an employment contract. The employer obtains an interim prohibitory injunction preventing specified uses of information pending trial.

Mandatory injunction : Requires the respondent to do a specific act eg In a claim alleging that a supplier of computer software failed to deliver up software at the end of the parties’ relationship, the claimant obtains an interim mandatory injunction requiring the software to be delivered up pending trial.

Quia timet injunctions: Allow both prohibitory and mandatory injunctions where a wrong has been threatened but not yet committed eg In a claim alleging that the threatened closure of a bank account would be a breach of statutory duty, the customer obtains an interim mandatory injunction requiring the bank to keep the account open

Question 36

Evidence required - American Cyanamid guidelines / just and convenient

Answer 36

An injunction may be granted where it is just and convenient (s.37 of the Senior Courts Act 1981). In American Cyanamid Co v Ethicon Ltd [1975] AC 396, Lord Diplock laid down guidelines, now known as the ‘American Cyanamid guidelines’, on how the court should exercise its discretion to grant an interim injunction. These following summary will be considered in more detail in the following pages.

Step 1: Is there a serious question to be tried?

Step 2: Would damages be an adequate remedy for a party injured by the court’s grant of, or failure to grant, an injunction?

• Damages for the applicant?
• Damages for the respondent?

Step 3: Where does the balance of convenience lie?

Equitable and discretionary remedy

Step 1: is there a serious question to be tried?

An injunction is not a cause of action - it is a remedy. Therefore, an applicant cannot sue for an injunction. The applicant must have a pre-existing cause of action.

The court must be satisfied that this is not “frivolous or vexatious” and that “there is a serious question to be tried”. In many cases, this is not a difficult hurdle to surmount. However, if this test cannot be met, the injunction will generally be refused (and the court will not go on to consider steps 2 and 3).

Step 2: would damages be an adequate remedy for a party injured by the court’s grant of, or failure to grant, an injunction?

When considering the adequacy of damages, the court will firstly consider the issue from the applicant’s perspective and, depending on the outcome of this analysis, the court might then go on to consider the same issue from the respondent’s perspective:

Step 2(a) – applicant’s perspective - the court will generally refuse an injunction if the applicant could be adequately compensated by damages for any loss caused by the refusal to grant an interim injunction. However, damages may be inadequate if the respondent has not means of paying them or the harm being caused is irreparable, cannot be quantified, or is serious and likely to continue.

Step 2(b) – respondent’s perspective – if an injunction is granted, the respondent is going to be prevented from doing something, or required to do something, until trial – but it might transpire that the injunction should never have been granted, most likely if the applicant fails at trial. The court will ask itself whether the respondent could be adequately compensated by the applicant if it transpires that the injunction was wrongly granted. If so, then this suggests the injunction should be granted.

Step 3: the balance of convenience

Step 3 – if it appears that damages would be adequate for neither party, then the court will consider a very broad range of factors to try to ascertain whether granting or not granting the injunction carries the lesser risk of injustice ie to ascertain where the ‘balance of convenience’ lies.

Question 37

Equitable and discretionary

Answer 37

The guidelines just stated should be considered in the context of an injunction being an equitable remedy, so equitable principles apply, including that;

• An injunction will not be obtained when it would serve no practical purpose;
• The court might refuse to grant an injunction if the applicant has not come to court with ‘clean hands’
• Excessive delay may lead to a refusal of the application.

An injunction is also a discretionary remedy: there is no automatic right to an injunction just because all the ‘guidelines’ that follow in this element have been met.

An application for an interim injunction must be supported by written evidence setting out the facts to justify the relief sought (CPR 25.3(2)), keeping in mind the guidelines and considerations set out above. In addition, if the application is made without notice, the evidence must state the reason why notice has not been given (CPR 25.3).

Question 38

Procedure

Answer 38

An application for an interim injunction is an interim application so the starting point is that the procedure is the same as any for any other interim application (see the element relating to interim applications). However, because an interim injunction is a form of interim remedy (CPR 25.1(a)), and one with potentially very serious consequences, there are some additional procedural considerations.

• Cross undertaking in damages
• Without notice safeguards
• Applications before a claim is issued

These are explained in the following pages.

Undertakings

A court will often decide to grant an interim injunction only if the applicant offers an cross-undertaking to pay damages to the respondent for any loss sustained by reason of the injunction if it is subsequently held that the applicant ought not to have been granted an interim injunction - for example, if proceedings are discontinued, or the injunction is discharged before trial, or if it is decided at trial that the applicant had not been entitled to restrain the respondent from doing what it was threatening to do.

The cross-undertaking is made to the court. It is there for the protection of the respondent, but the court can also require (as a condition of granting the injunction) an undertaking to be given for the protection of any other person who may suffer loss because of the order (25A PD 5.1 and 5.2).

Without notice safeguards

The application for an interim injunction can, like any interim application, be made without notice if this is justified. If the application is made without notice and the injunction is granted, it will be granted initially for a limited period only and the court will fix a second hearing called the ‘return date’. The respondent will be given notice of that hearing and the opportunity to attend it to make representations, and at that second hearing, the court can make the following orders:

• Maintain order (to keep the injunction in place until the trial of the substantive matter).
• Discharge the injunction vary the terms of the injunction.
• Enforce the applicant’s undertaking in damages if it transpires that the injunction should not have been granted.
• Accept an undertaking by the respondent not to do the acts in question, in place of the injunction.

In the case of a without notice application, the applicant must make full and frank disclosure of all matters of fact or law relevant to the application – including those which are or may be adverse to the applicant. This is required for any interim application made without notice, and its importance is particularly pronounced when something as important as an interim injunction is at stake.

The applicant’s legal representatives must prepare a full note of the hearing as soon as possible and this should also be served on the respondent (and any other party affected by the order) without delay. The full note of the hearing ensures the respondent knows what case they have to meet at the next, with notice, hearing.

Applications before a claim is issued

In cases of exceptional urgency, not only can a party apply for an interim injunction without notice but a party can apply before a claim form has even been issued.

The court will only grant an interim remedy before a claim has been issued if the matter is (CPR 25.2(2)(b)):

• Urgent; or
• It is otherwise desirable to do so in the interests of justice.

In these circumstances, the applicant must undertake to the court to issue a claim form immediately.