The Court of Appeal has handed down Judgment in a significant case for parties applying for, or who are subject to, freezing orders. The decision in Various Claimants v Spence & Others [2022] EWCA Civ 500 addresses the circumstances in which applicants for freezing orders will be required to provide fortification in support of the cross-undertaking in damages that they are required to give.
Daniel Saoul KC, Matthieu Gregoire and Melody Ihuoma of 4 New Square Chambers, instructed by Trowers & Hamlins, act for a group of over 440 Claimants who allege that the Defendants have perpetrated a substantial property investment fraud. The Claimants obtained a Worldwide Freezing Order (WFO) in February 2021 and provided £500,000 of fortification to sit behind their cross-undertakings. Subsequently, in March 2021 two of the Defendants, who were respondents to the WFO, applied for the fortification already provided to be increased substantially by over £2million. The High Court granted the application, albeit in a lesser amount than originally sought, requiring the fortification to be increased by £800,000.
The Claimants appealed to the Court of Appeal, which has upheld the appeal and dismissed the fortification application. The Court of Appeal has clarified and confirmed the principles applicable to fortification applications generally, including the need for any such application to be properly evidenced, and concluded that in this case, as the Claimants had argued, the applicants had failed to adduce evidence demonstrating a good arguable case that they would suffer loss as a result of the WFO and further, the losses alleged were inherently speculative and incapable of intelligent estimation.
The full judgment is available here.
