Injunctions are a discretionary remedy that may be awarded in addition to, or instead of, damages. The essence of an injunction is to enforce obligations that a party is required to abide by. These obligations may arise either under contract, or under the common law (for example, not to trespass onto someone’s property). An injunction may be ordered by the Court in circumstances where giving the injured party (the claimant) damages will not adequately compensate them for the breach of the obligation by the defendant (the wrongdoer).
There are, generally speaking, three types of injunction:
* Prohibitory — This prevents the defendant from taking certain steps; for example, soliciting customers of the claimant in breach of certain restrictive covenants in a contract between the parties.
* Mandatory — This requires the defendant to perform some act; for example, removing branches of a tree overhanging the claimant’s property.
* Anticipatory — This requires a defendant either not to breach an obligation, or to take steps to prevent harm from occurring; for example, to provide support for the claimant’s (adjoining) land in order to prevent subsidence.
Injunctions may be interim (also called interlocutory or preliminary) or final, and may be awarded unconditionally or subject to conditions. An interim injunction is granted before the legal proceedings come to trial, while a final injunction is one which is awarded at trial as a final remedy in the case.
Applications for interim injunctions are usually make “on notice”; ie, the defendant is told in advance (usually with a minimum of 3 business days) that there will be a hearing at which the Court will decide whether or not to grant the injunction. An interim injunction on notice will last until the final trial of the proceedings, or until further order of the Court, and will usually include a clause allowing either party to apply to vary or set aside the injunction order.
However, it is also possible for a claimant to ask the Court to grant an interim injunction on an application made without any notice. This will happen if the Court can be persuaded that there are good reasons not to give the defendant any warning that an injunction is going to be obtained. One example would be if the matter was so urgent that there was simply insufficient time to give the defendant notice. Another would be where giving notice would enable the defendant to cause the claimant irreparable harm in some way before the injunction is granted (thereby defeating the whole purpose of the injunction). When the Court grants a “without notice” interim injunction, it will set down a “return” date (usually a week or two later) which will allow the defendant (once he is served with the injunction order) to try to persuade the Court to lift the injunction. As with “on notice” interim injunctions, the defendant may usually also make an application at any time to set aside or vary the order.
When deciding whether to grant an interim injunction, the Court will generally consider the following issues:
* Whether there is a serious issue to be tried — While the claimant does not have to prove that his claim will succeed at trial, he must at least show that he has a real prospect of success. If he cannot do this, he will not be granted an interim injunction. Meanwhile, the defendant (in opposing an application made on notice) must try to show that he has an arguable defence. The burden is higher for a mandatory injunction: the claimant will need to show that the case is “strongly” arguable. The reason for this is that the Courts are loathe to require particular action by a party (rather than simply stopping them from doing something) unless there appears to be a very good reason to make the order.
* Adequacy of damages -— The Courts will consider whether the claimant would be adequately compensated by a later award of damages if the injunction is not granted at all, and indeed whether damages would be adequate for a defendant if the interim injunction were wrongly awarded (and then later overturned). If damages would sufficiently compensate the claimant in any event, the claimant not be entitled to an injunction (whether interim or final). If damages would not adequately compensate the claimant, the Court will then go on to consider the impact of the claimant’s “cross-undertaking as to damages”.
It is a requirement that any claimant seeking an interim injunction must give a cross-undertaking in damages to the defendant. The effect of this is that if the injunction is later overturned (because, for example, the defendant is able to show that the injunction should not have been granted in the first place), then the defendant will be entitled to damages from the claimant for the losses the defendant has suffered as a result of the injunction being granted. Damages will be awarded even if the claimant acted at all times in good faith. If the claimant was not acting in good faith it is possible for exemplary damages (also sometimes called punitive damages) to be awarded in addition.
The Court is more likely to grant an interim injunction if it is satisfied that it would later be possible to compensate the defendant for any damage caused by the granting of the injunction by ordering the claimant to pay damages. In this regard, the Court can order the claimant to pay money into Court or to provide some other form of security to demonstrate that the undertaking is not worthless.
* The balance of convenience — This exercise is more accurately referred to as the balance of “inconvenience”. In essence, the Court needs to weigh up the harm caused to the defendant by granting the injunction against the harm caused to the claimant by not granting the injunction. If all of the factors are equal, the Court will tend to uphold the status quo, ie, the position of the parties as it stands immediately before the proceedings were begun or the application for the interim injunction was made.
The above points are guidelines only, rather than strict rules of law. Injunctions are a flexible remedy and are granted as a matter of discretion taking into account all the facts. While the Courts generally will not, at the interim injunction stage, undertake a detailed analysis of the evidence or try and solve complex issues of law and fact, they will very often take a hard look at the strength of a party’s case based on the information available to the Court at the time of the application.
A word on final injunctions
At trial, the Court may award an injunction if it is both just and convenient to do so. Such order may be made unconditionally or on specific terms and conditions. When deciding whether to award a final injunction, the Court will, in contrast to interim injunctions, consider the merits of the case in detail, including the parties’ behaviour up to trial.
Finally, it should be noted that a Court cannot grant an order either compelling performance of an employment contract or an injunction preventing breach of an employment contract where the result would be to compel an employee to do any work or attend a place in order to do work. Similarly, the Courts rarely compel employers to perform employment contracts. The Courts are also reluctant to grant an interim injunction to enforce restrictive covenants in an employment contract. They prefer to deal with the matter by ordering an early (or “expedited”) trial of the matter.
So, are injunctions a one-stop shop? The answer is that they can be. An interim injunction will often be determinative in cases where the injunction is used to prevent breaches of restraint of trade clauses where, for example, the former employer is trying to stop a “team move” or otherwise to prevent an ex-employee from poaching clients and staff. Injunctions are, however, inherently risky and uncertain as each one is determined on the facts and the Court will take into account the behaviour of the parties in exercising its discretion.
John Greager is a partner and Ali Dewji is a trainee solicitor, in Fox Williams’ dispute resolution department.