Freezing injunctions in child abuse compensation claims

An article by Malcolm Johnson of Malcolm Johnson & Co. (published in APIL PI Focus Volume 18 Issue 1 January 2008)

It has always been a sad feature of this area of the law that some paedophiles are able to abuse children over a period of many years, leaving a trail of physical and psychological injury behind them, before they are finally called to account in the criminal and civil courts.

When dealing with these claims, it is important to ask the practical question – how was the abuser able to target the child in the first place? The question is important because the answer may provide a clue to the very means by which the abuser will satisfy any judgment. It would be a mistake to assume that an abuser of children is likely to be impoverished. On the contrary, as numerous enquiries and investigations have shown, a great many abusers possess substantial capital. They occupy positions of responsibility that give them access to children; they own houses where they can perpetrate abuse and cars to transport children to and fro. They possess enough disposable income to pay for presents and holidays and above all they have the means to maintain the outward impression of trust and respectability.

In February 2007 of this year, I received instructions from a Claimant aged 22.  As a child, she and a friend had been lured into the home of a man who lived near to her parents. There she was sexually abused over a period of approximately one year. The Claimant did not tell her parents what was happening and as so often happens in these cases, she continued to return to her abuser’s house. She kept her silence until 2006, when her friend gave a statement to the police. The police then interviewed the Claimant and the Defendant was prosecuted. Initially he pleaded not guilty, but on the first day of trial he suddenly changed his plea. He was convicted in 2006 and sentenced in early 2007 to a lengthy prison sentence.

The Claimant had a substantial claim, not only against her abuser but also in relation to her claim to the Criminal Injuries Compensation Authority. As a result of the abuse, her relationship with her boyfriend had broken up and she had abandoned her college course, where she had been training to be a nurse. There was a sustained earnings history prior to her making disclosures to the police together with ample evidence of commitment to her nursing course. We obtained public funding for the purposes of suing her abuser and instructed Dr Trevor Friedman, a consultant psychiatrist to prepare a report. Dr Friedman confirmed that the abuse had had a serious effect on the Claimant’s life and that there had been a delay to her eventual entry into full time nursing. However the prognosis for the future was reasonably positive.

Consequently a schedule of loss of earnings was prepared both for the civil and the CICA claim.

In relation to the civil claim, this was likely to be worth a great deal more than the claim to the CICA. We had established that the Defendant was the owner of an unencumbered freehold property, which would cover not only the Claimant’s likely damages but also her costs. However our immediate concern was that the Defendant would, on receipt of any Letter of Claim or proceedings, seek to dissipate his assets. Consequently we had to consider the possibility of applying to the court for a freezing injunction.

Part 25.1 (1) of the Civil Procedure Rules states:

The Court may grant the following interim remedies:…..

(f)    an Order (referred to as a ‘freezing injunction’) –

(i)    restraining a party from removing from the jurisdiction assets located there; or

(ii)    restraining a party from dealing with any assets whether located within the jurisdiction or not;

The basic principles for making such an order are:-

1. The Claimant must establish that he has a good arguable claim to the right that he seeks to protect. See Derby v. Weldon [1990] Ch 48 CA).
2. The Defendant must have assets, whether in or outside the jurisdiction
3. There is a real risk that, if the court does not grant the order, the Defendant will dissipate his assets, or otherwise put them beyond the reach of the court.

The Practice Directions to Rule 25 set out the detail of the procedure to be followed.

Freezing orders are of course more commonly found in commercial cases, but one example of an order being made in a personal injury case is that of  Allen v Jambo Holdings Ltd [1980] 2 All ER 502. This was a fatal accident case where the Claimant’s husband was struck and killed by the propeller of an aeroplane owned by a Nigerian company. His widow successfully obtained a freezing injunction to stop the aeroplane from leaving the United Kingdom. The Nigerian company had no other assets within the jurisdiction. One of the issues that came up in the case was the fact that the widow was legally aided and therefore she could not give an undertaking as to damages.

The undertaking as to damages is described in more detail in Practice Direction 5.1A to Rule 25. It is effectively the promise the applicant gives, to be responsible for any damages sustained by a person other than the respondent, including another party to the proceedings, or any other person who may suffer loss as a consequence of the order.

In Jambo the court held that an injunction could be granted in a personal injury case, and the injunction was not to be granted solely by reference to the Claimant’s financial standing.

However in our case, the Defendant’s sole substantial asset appeared to be a house. Our information was that after his imprisonment, the house was tenanted and clearly it was not about to fly away. Nonetheless there remained the risk that the Defendant could, from prison, sell the house and transfer the sale monies away.

The Defendant was located through the Prisoner Location Service. Prisoners are often moved from prison to prison and so it is important to check the Service before serving any document, as by the time the proceedings were issued and served, the Defendant had moved to another prison. On the 30th March 2007, my firm sent a Letter of Claim to the Defendant. The letter used the Defendant’s prisoner number and it was marked “Solicitor’s Letter – Rule 39”. This refers to Rule 39 of the Prison Rule 1964 (as amended).

As a personal injury litigator, who has spent most of his 15 years in practice, writing to local authorities, employers, insurance companies and defendants in road traffic accidents, I do find that writing directly to an abuser is an odd experience. Obviously the letter has to be kept within the terms of the personal injury pre-action protocol and it must be moderate and appropriate in tone. This proved helpful later on.

At this stage, we had the benefit of the advice of Mr Justin Levinson of One Crown Office Row. Mr Levinson advised (in the light of an application for a freezing order) that the Letter of Claim should specifically ask the Defendant for an undertaking not to dissipate his assets.

No reply was received from the Defendant. Periodic searches of the Land Registry confirmed that there were no attempts to sell his house but in early August 2007, we issued proceedings on behalf of the Claimant in the High Court and proceeded to deliver those proceedings to the prison where the Defendant resided. Proceedings were deemed served on the 13th August 2007.

At the same time, we issued on notice an application for a freezing injunction, which was listed for the 29th August 2007. The application was supported by an affidavit, Exhibits containing the Claimant’s civil statement, her criminal statement, the Defendant’s certificate of conviction, evidence in support of her loss of earnings claim, medical evidence, correspondence sent to the Defendant, information from the Land Registry, local estate agents’ valuations for houses in the same road and finally the proceedings.

Freezing injunctions work against people rather than property. An injunction does not entitle the Claimant to any proprietary right, but it can be a contempt of court to deal with a property if you know or should have known that it is subject to a freezing order. Therefore if the order was granted, it would immediately be sent to the Land Registry. At that point, it would be very difficult indeed to effect any valid transfer.

The application was served on the Defendant at the same time as the proceedings. On the day of the actual hearing, we entered judgment in default.

Mr Levinson was called away to another hearing, and so our barrister was Judith Rogerson of One Crown Office Row. We were heard in Court 1, St Dunstan’s House by His Honour Judge Mackie QC. The client also attended the hearing.

Judge Mackie made two comments during the course of the hearing:-

• There should have an Affidavit of Service to prove that the application for the freezing order had been properly served. Other evidence (a copy of the hand delivered letter to the prison) was produced to show that the application had been served on the Defendant and this was accepted. He was also shown the Certificate of Service for the proceedings.
• There should have been a link shown between the Defendant’s certificate of conviction and the Claimant’s allegations as put in her criminal statement. We had not been able to obtain the actual indictments against the Defendant, which showed which offences related to the Claimant as opposed to any other victim. However Judge Mackie was prepared to accept that there was an arguable case on the evidence.

Judge Mackie asked Counsel to take him through the various steps in the evidence, so that he could be satisfied that it would be reasonable to grant an order. Counsel submitted that the first two principles underpinning an application for a freezing order should be satisfied. There was an arguable case and the Defendant obviously had assets in the jurisdiction. Judge Mackie said that he was satisfied in relation to the first two principles.

However the third principle (risk of dissipation) was at issue. Counsel submitted stated that there were two grounds for concern, the Respondent’s questionable character (he had only pleaded guilty to the criminal charges on the first day of his trial) and the fact that he had refused to get involved in the proceedings.

The essence of counsel’s submission on this point was “his silence is deafening and this gives us cause for concern”. There was also the point that if an Order was not made, there might be a need to come back to the Court and incur more costs.  We would also have to keep checking with the Land Registry for any movement or interest in the property. .

Judge Mackie granted the order. In relation to the first point, it was clear that the Claimant had a good arguable case.  The Defendant had had the opportunity to contest the Letter of Claim, and he had not denied anything said in that letter.  The second element, the existence of assets within the jurisdiction was also clear.

The third point related to the risk of dissipation.  Judge Mackie said that there had indeed been a deafening silence from the Defendant and there was some evidence of questionable character but not (in his view) any question of dishonesty.  The Letter of Claim had been “moderate and appropriate.” In light of that silence there was a real risk that the Respondent would dissipate his assets. It was still open to the Defendant to respond by giving his proposals.

Judge Mackie then came to the terms of the order. We had prepared a paper order on the basis of the Annex to Practice Direction 25. Practice Direction 2.4 states that whenever possible a draft of the order sought should be filed with the application notice and a disk containing the draft should also be made available.

Judge Mackie said that that he appreciated the difficulties with the enforcing of cross undertakings against a person with little means, but he was not sure that this was a valid reason for not including those undertakings within the freezing order. Indeed the case of Allen v Jambo Holdings Ltd (see above) said otherwise. Although the Applicant did not have the money, the Respondent did have rights. In the event, the court had an overall discretion that required the granting of an injunction. Judge Mackie added that he considered the claim for damages to be a good one and that at present no damage was going to be suffered by the Defendant. He granted the injunction with immediate effect together with costs.

We set about drawing up the order, which was approved by the judge and sealed the next day. We then served the sealed order on the Defendant, and lodged it with the Land Registry using Form RX1. We are now awaiting the formal judgment before proceeding to an assessment of damages.

It goes without saying that freezing injunctions are not granted lightly. Judge Mackie was concerned to examine all aspects of the evidence, before making his decision and the matter was (as he said) very much within his discretion. It is submitted that if the Defendant had replied to the Letter of Claim (for instance if he had said that he would appoint solicitors to deal with the claim) then it might have been difficult to obtain the order at that time. Furthermore the application was granted on notice. We think that an emergency application would have failed, without better evidence of the Defendant’s intentions in relation to his property.

The claim continues to assessment of damages, but this order was the first concrete result for the client as it may be her best chance of securing the very asset that will satisfy her judgment.