Alan Sheeley, partner, and Sara Esfandyari, associate, Pinsent Masons, explain how more clarity in this area of the law could help practitioners and fraud victims.
A fraud victim seeking a freezing order in order to reclaim their losses must first satisfy a court that they have a ‘good arguable case’. There are two tests for this— The Niedersachsen threshold and the jurisdiction test—but which do the courts prefer? Unfortunately, the law is not clear.
The authors cite two recent cases suggesting ‘that the English courts favour a pro-applicant approach, with the less demanding “good arguable case” test in The Niedersachsen seemingly the Commercial Court’s preferred approach in freezing order applications’. Sheeley and Esfandyari caution, however, that ‘the story doesn’t end here’ and that, until the Court of Appeal clarifies the position, practitioners should pay heed to both tests.
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