Freezing Orders - Brainbox Digital v Backboard

Case Alert - [2017] EWHC 2465 (QB)

Court accepts that it can order an unlimited cross-undertaking in damages in return for a freezing order

The judge in this case agreed that a freezing injunction against one of the defendants should continue. However, that defendant asked that maintaining the injunction should be made conditional on a further unlimited undertaking (to meet any loss or damages which the defendant might suffer if it turns out that the injunction was wrongly granted). A cross-undertaking of £125,000 had already been provided by the claimant.

The judge accepted that it is possible for the court to order an unlimited undertaking in damages: "In my judgment the court may require, as a condition for granting or continuing an injunction, that the cross-undertaking given by the applicant is fortified by the provision by someone other than the applicant of an unlimited, or a limited, undertaking, or by the making of some other form of limited provision, to meet any loss that the injunction may cause: see Stephen Gee QC Commercial Injunctions 6th ed p347. Any fortification required is not necessarily limited in amount. The court has a wide discretion as to the conditions on which it may grant or continue an injunction. Discretions of that kind should not be fettered by rigid judge-made rules".

However, it was still necessary to make "an informed and realistic estimate" of the likely amount of loss which the defendant might suffer. There was a difference between a difficulty in quantifying loss and the absence of evidence of the likelihood of a significant loss.

On the facts of this case, the defendant had failed to adduce sufficient evidence on which to...