Freezing orders: Action correspondent to UWOs

UWOs alone cannot freeze or seize assets; therefore, they are frequently supplemented by court issued Interim Freezing Orders (IFOs). By preventing the respondent from dissipating, transferring or selling the assets under investigation, the property is ‘locked’ in place to allow proper investigation to take place without third party interference.

IFOs can be varied to allow limited access to funds to pay for reasonable living expenses or costs for legal assistance. The purpose of an IFO is not punishment, but rather to protect assets, ensuring their condition and ownership remain intact pending a final determination.

Procedure for obtaining a freezing order

Whenever a UWO is made, an IFO usually comes hand in hand, and it is common practice for enforcement authorities to apply for the freezing order at the same time as the UWO application. Such applications are typically made ex parte with the respondent will only being informed when both orders are served on them.

In granting an IFO alongside a UWO, it must be demonstrated that it is ‘necessary’ on the facts of the case, where there is a real risk of the assets being sold or transferred. The order, once effected, is usually in place until the enforcement authority decides on next steps.

Responding to a UWO and a freezing order

If you are served with a UWO, it is crucial to seek legal assistance as soon as possible to formulate a defence. Evidence and a clear timeline must be collated to prove the origin of your assets, how it was acquired, and where the funds to purchase assets, or the funds, came to be. Failure to respond by the deadline results in an automatic presumption of the targeted property having criminal origins. Non-compliance almost always results in the seizure and recovery of the assets under POCA 2002.

UWOs may also come with penal notices, resulting in contempt of court if ignored. It is possible that an incomplete defence may result in part of the property being recovered, and part of it being returned. It is imperative that you are honest in your defence as knowingly providing false information or failing to exercise care in verifying evidence before submission, constitutes a criminal offence.

In summary, if a UWO and IFO are served on you, it is important you seek urgent legal advice right away to construct a defence explaining the source of your wealth and assets. To contact Nath Solicitors, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Freezing Orders In Relation To Unexplained Wealth Orders appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Under the Companies Act 2006, shareholders do not need to own a minimum number of shares to qualify for bringing a claim.

What are the grounds for bringing a derivative action claim?

Derivative actions can fall into the following categories:

• Where a director was negligent and failed to exercise a reasonable standard of care and skill, which subsequently caused loss to the company
• Where a director failed to comply with an obligation under the Companies Act, or the company’s constitution
• Where a director breached their duties to the company, regardless of whether it was statutory, fiduciary or other legal duties.
• Where a director misused or misapplied company funds, property or assets

Before a derivative action claim can proceed, court permission must be sought where a prima facie (at first glance) case is demonstrated. Essentially this is classed as a valid claim based on the face value of facts. This is to prevent any unfounded or unreasonable claims being made to the court.

Derivative action VS unfair prejudice

Unfair prejudice claims are an avenue for shareholders to bring legal action on the grounds of personal harm experienced from directors or other shareholders of the company. Where derivative actions are successful, the damages recovered go back into the company’s coffers.

Unfair prejudice petitions are generally more common for shareholders in seeking redress for wrongdoing, as the reward from a successful case is enjoyed by the shareholder alone. The threshold is also lower for these claims and court permission is not needed.

Importance of derivative actions

Derivative actions serve as a safeguard in corporate governance as a check of directors’ powers. In situations where the directors are the wrongdoers themselves, there may be difficulties or reluctance in taking accountability for misconduct, or taking legal action against a fellow director for more complex reasons. In these situations, shareholders are empowered to step in to ensure the protection of the company’s rights and the upholding of the regulations, compelling remedies that benefit the company. This is crucial in preventing directors from abusing their power and stifling minority shareholder voices.

Though they are relatively rare in practice, derivative actions are the only legal action that offers justice in situations where the company itself has been wronged by its own directors. It is a mechanism to ensure proper conduct in companies, and its existence acts as a deterrent for directors from breaching their legal and fiduciary duties.

At Nath Solicitors we provide legal expert advice on derivative actions. If you need assistance, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Derivative Actions Against Directors – Protecting The Company As A Shareholder appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

• A defamatory statement being published to at least one third party
• The statement identifies or refers to the claimant
• The statement is false, or cannot be justified as true

A claimant must also prove they suffered serious harm, showing real life consequences from the defamatory actions. This could include harassment, altered employment situations like being demoted or fired, or worse co-worker relationships.

The Online Safety Act 2023 replaces the Communications Act 2003 with a new crime for sending false communications: it is now illegal to knowingly send a communication with the intent to cause significant emotional, psychological, or physical harm. This provision specifically targets online misinformation intended to harm individuals. The new laws are also imposed on social media platforms as well as public bodies, and requires them to take a proactive role in addressing illegal content. Such changes include increasing accessibility and responsiveness in reporting illegal content, and heightened cooperation between the platforms and public bodies.

Should the perpetrator be identified, claimants have the option to pursue civil action, seeking compensation for reputational damage and a court order to remove or rectify any false statements. It is also possible for English courts to grant an injunction to stop publication of the defamatory content.

To unmask the perpetrator, Norwich Pharmacal orders can be used to compel third parties to reveal any pertinent details. Courts in England and Wales are empowered to direct social media platforms to provide personal data of specific individuals, aiding their identification for subsequent legal actions. However the following three conditions must be fulfilled:

• There must have been a wrongful act by an unknown wrongdoer (in this case: defamation)
• There is no alternative way for the claimant to proceed without the third party’s disclosure of the perpetrator’s personal information
• The third party’s platform was used for the wrongdoing, but the third party had not done anything wrong in the specific situation

The privacy policies of many companies require them to protect user data as a priority in most circumstances, so a Norwich Pharmacal order is usually the most straightforward method in obtaining personal information about the perpetrator.

If you need advice or assistance on defamation matters, please contact Nath Solicitors on 0203 983 8278 or get in touch with the firm online.

The post Defamatory Impersonation Of Character – What Can Be Done? appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

• The content in question must be defamatory
• The content must be published to at least one third party
• The content needs to mention the person either explicitly or implicitly with outside proof needed to confirm that a reasonable person could identify the person from the content being complained about
• The intention to defame (and not simply telling the truth or expressing honest opinions)
• The content causing actual and serious harm or damage to the person, including showing evidence of the harm caused

Defamation between employees

The most common examples of defamation between employees can be grouped into the categories below:

• The publication of defamatory content on an employee’s social media platform about another employee, where other members of the workplace can view the content. For example, a public Instagram post “exposing” another coworker’s interests and hobbies outside of work to frame them as someone of poor character.
• Sending emails to another employee, such as a supervisor, with false complaints or untrue narratives about another employee resulting in material harm to their professional reputation, such as a loss of promotion, sudden HR reviews, or even termination of their contract.
• The publication of content such as messages or posts on professional communication platforms used by the company, such as Microsoft Teams, Slack or Google Workspace, that are of a defamatory nature to another employee and may contribute to, or result in, lowered opinions or false beliefs about an employee.

It is also important to recognise that defaming a former employee could lead to a valid defamation claim if it is proven that the defamatory content directly caused significant harm to the employee after they left the company, for instance:

• Poor reputation among the work sector or industry, leading to loss of employment
• Harassment
• Erosion of interpersonal relationships
• Deterioration of mental health due to anxieties, stress or depression about the possible consequences of the defamatory statements

Defamation from employers

Defamation from employers follows the same line of reasoning. Occasionally, the distinction of what constitutes defamation in an employer-employee relationship can be fuzzy, with performance reviews or genuine feedback potentially labelled as defamatory and malicious. Here are three main defences for employers:

• Truth: where the statement was substantially true, even if it tarnishes the employee’s reputation
• Honest opinion: where the statement was made in good faith and was the employer’s honest opinion of the employee. For example, in a team performance review, if the employer states that the employee has insufficient skills in completing certain tasks and genuinely believes so, it is unlikely that the statement is defamatory.
• Qualified privilege: when the employer has a legal, social or moral duty to communicate certain information, and the recipient has a corresponding right to receive the truthful information. This is usually in the form of job references or professional performance reports.

Contact Nath Solicitors

If you need advice or assistance on defamation matters, please contact Nath Solicitors on 0203 983 8278 or get in touch with the firm online.

The post Defamation In The Workplace appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Application for specific disclosure

A party can apply for specific disclosure by filing an application notice – a Form N244 – under CPR 31.12, which includes the following components:

• Clear identification of the documents requested to be disclosed
• Relevance of the documents to a fair resolution of the case

The court will consider if there were attempts to informally resolve the issue, whether the refusal to disclose information was unjustified, how important the documents are to the case, the specificity of the request, and the timing. Early applications are often better than ones made later in proceedings. Being specific about the document class or type increases your chance of a successful claim.

Being served court-ordered specific disclosure

Noncompliance can result in the court striking out your case and imposing severe sanctions. Even documents that might seem detrimental to a case should not be kept back. Nonetheless, there are a few possible reasons for a party’s objection to particular disclosure:

• The party no longer possesses, has access to, or controls the document
• The request is disproportionate to resolving the issues in the case. Although this will be difficult to prove once the court has already ordered specific disclosure, as it is an indication that they acknowledge the significance of the documents requested

It is adviseable to locate and submit the documents requested as soon as possible. If the submission of the documents dramatically reduces the chances of succeeding in a case, it is sometimes recommended to explore settlement options to save time and costs.

For professional legal advice, Nath Solicitors can be contacted on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Court-Ordered Specific Disclosure appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

The court has broad discretion to deviate from the standard rule where the losing party covers the winning party’s expenses. This departure can occur based on the parties’ behaviour, particularly their attention to court orders and rules, and whether they genuinely attempted to settle the matter prior to litigation being started.

Factors that may lead to cost penalties

• Courts may order parties to participate in alternative dispute resolution methods, like mediation, provided it doesn’t compromise the right to a fair trial. Refusing to engage with ADR without good reason might result in unfavourable cost consequences.
• To avoid litigation misconduct and ensure procedural compliance, parties are advised to consistently submit documents and forms promptly and address any amendments or applications without delay, facilitating smooth and efficient proceedings.
• A party refusing a Part 36 settlement order under the Civil Procedure Rules (CPR) risks a costs penalty if the proceedings result in a less favourable outcome than the rejected offer.

Minimising the risks of cost penalties

Parties must show they are willing to engage in ADR prior to issuing legal proceedings. Documenting the refusal reasons with evidence and offering alternatives can be adequate, even if ADR seems unfavourable at certain stages.

It is crucial to approach Part 36 applications strategically, including recognising the best time to agree to a settlement. It can also be shown as a sign of good faith to the other party. It should be noted that winning a case doesn’t always mean avoiding major financial repercussions, especially if a settlement was rejected. The main deciding factor for cost consequences is whether a party is strategic, sensible and considerate of the courts and the other parties in litigation.

For professional legal advice, Nath Solicitors can be contacted on 0203 983 8278 or at enquiries@nathsolicitors.co.uk.

The post Cost Penalties In Litigation And How To Minimise Them appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Conditions for defamation

A statement can be seen as defamatory if it clearly refers to a person in a context that is harmful to their reputation and is published to at least one third party. For instance, a work group chat message might contain accusations of fraud, bullying, or harassment. Under the Defamation Act 2013, it must be shown that a person’s reputation has suffered “serious harm”. Consequently, demonstrable harm caused by the defamatory remark is required.

Defamation within the company board

In the recent case of Orekoya v Travelodge Hotels Ltd [2024], the High Court determined that intra-company communications do not constitute “publications” in the definition of a defamatory statement, stressing on the distinction between communications in the workplace and “mere idle gossip”. Case law is constantly under development and refinement, therefore this should not be seen as a definition of the scope, but it does suggest the court’s reluctance to interfere with intra-company affairs unless the nature of the correspondence is disproportionately defamatory and unbefitting of a professional setting.

Board communications become at risk of defamation claims when they possess the following qualities:

• Suspicions are stated as facts, where straightforward, accusatory language is used (e.g., saying that someone was dishonest in doing something) instead of phrases such as “there is a concern/allegation of…”
• Disproportionate spread of unverified rumours and broadcasting it to a wide group within the company without real need.

Possible defences and justifications

Firstly and most importantly, if the director has taken steps to verify the truthfulness of the statement, or if it is of an honest and clear belief based on facts, then it is unlikely the statement will be deemed defamatory.

Directors can also rely on qualified privilege. This is where, in certain communications, the sender or recipient has a duty to inform or receive the information. This situation would generally tie into a director’s obligation to the company’s success, requiring them to take reasonable action against threats to operations or growth.

A final point: if the board’s statement gets out, a director could have a valid defence if they reasonably thought publishing it was for the greater public good.

Protecting yourself as a director

• Avoid using vindicative and accusatory language
• Separate facts from opinion
• Document the efforts made to verify pieces of information and allow open conversation if appropriate

At Nath Solicitors we provide legal expert advice on defamation. If you need assistance, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Defamatory Material Within Communications Between Directors appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Civil contempt: disobeying a court order

Civil proceedings contempt can come in different forms, including but not limited to:

• Breaching an injunction, such as non-disclosure or freezing orders
• Failure to comply with mandatory directions from the court
• Breaching an undertaking to the court

False statement verified by a statement of truth

This can occur when someone signs a legal document, stating it is true but knowingly including false information.  The consequences may include fines or imprisonment of up to two years. For example, false claims about personal injury in a statement of truth led to a 6-month sentence in North Bristol NHS Trust v White.[1]

Contempt in the face of the court

When a person exhibits disruptive conduct in a courtroom that hinders the ongoing proceedings, such as:

• Shouting or demonstration of other disrespectful behaviour
• Threatening other individuals in the courtroom
• Refusing to answer questions
• Interfering with witnesses

This is a form of criminal contempt that can amount to a term of imprisonment for up to two years, fines, or both.

Submitting a contempt application

Before a claimant can bring a contempt application under CPR 81.3 for interfering with the administration of justice (excluding High Court or County Court proceedings) or knowingly making a false statement of truth, they must first obtain the permission of the court.

Alternatively, the undertakings for a contempt application need to be precise about the specific contemptuous action, with these clearly outlined and supported by factual evidence. A detailed witness statement or affidavit may be needed with recorded proof (e.g., emails, messaging, digital logs) to support the claim.

Strict compliance with procedural requirements is expected from the court because it is an application intending to impose serious penalties or to commit someone to serving time in prison. Such serious repercussions mean these applications must be made appropriately and considered seriously by the court.

At Nath Solicitors we provide legal expert advice on disputes. If you need assistance, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

[1] [2022] EWHC 1313 (QB).

The post Contempt Of Court – Grounds And Applications appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Legitimate reasons for exclusion

When disputes involve a director, a dedicated conflicts committee, free from the director’s influence, may be established to control the flow of privileged information and advice. However, careful steps must be taken to structure, document and minute the meetings to avoid any grounds for an unfair prejudice claim.

Scenarios may arise where a director has, in their personal capacity, interest in proposed agreements or deals the company is considering taking on. In the event of a conflict, a director must declare the interest as soon as possible, and usually they will be barred from voting and will not count toward quorum (the minimum number of members needed for a meeting to be valid). Authorisation of resolutions in the event of a director’s conflict of interest will only be valid if they do not participate in the substantive decision-making process. However, there are circumstances where they may still be allowed to attend for discussion.

Attendance can sometimes also be restricted for confidentiality. However, sometimes the directors still need certain pieces of information from the meetings to execute their duties. In these scenarios, short summaries leaving out confidential information should be provided for the director’s reference with recorded reasons, and limiting the agenda of the meeting to the specific item that cannot be disclosed. This gives the director access to as much information as possible outside of the meeting.

Risk reduction in excluding a director from a meeting

The first step before making any decisions should always be to check the company’s articles of association or shareholders agreement for any provisions on participation rights. Any procedures made in relation to a meeting excluding a director should be done clearly and unequivocally, with legitimate reasons given for the exclusion (e.g., conflict management, protecting privilege). However, to avoid potential shareholder disputes under s.994 of the Act, directors should typically not be excluded from meetings.

To contact Nath Solicitors, please call us on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Exclusion Of A Director From A Meeting appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.

Advantages of ECA

A main advantage of an ECA is that it provides clarity on the case’s prospect of success. This process provides a disciplined review of the legal basis of a claim or defence and any limitation issues, the remedies sought, and the likely approach of the court. It reveals flaws in arguments or identifies areas needing more proof before a stance can be accepted.

ECAs are valuable for evidence and document strategy. Early analysis can identify relevant documents, potential witnesses, and risks around disclosure. This reduces the likelihood of surprises later and focuses time towards collating streamlined material rather than producing large volumes of irrelevant evidence.

Another major advantage is cost and risk management. Litigation is about proportionality and risk and an ECA can provide clear budgeting, highlight cost exposure if the case is lost, and identify procedural milestones that drive spending. It can also help evaluate funding options, insurance cover, and whether alternative routes such as mediation and settlement discussions are likely to achieve a better outcome at lower cost.

Furthermore, ECAs improve settlement leverage. A party with a clear understanding of the strengths, weaknesses, and valuation of their case is better placed to make credible settlement proposals, avoiding positional bargaining. An ECA can also shape a letter before action or prepare for ADR from a position of confidence. However, the ECA can only be effective as the information provided. If documents are missing and facts are still developing, any assessment must be expressed with sensible assumptions.

Overall, early case assessments are generally beneficial because it helps clients make informed choices regarding litigation, settlement, mediation, and narrows the issues in dispute before costs escalate.

At Nath Solicitors, we provide expert advice on litigation. If you need assistance. Please call us today on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.

The post Are Early Case Assessments Beneficial In Litigation appeared first on Defamation & Commercial Litigation Lawyers London | Nath Solicitors.