Interim injunctions can be an effective tool in a claimant’s armoury. Particularly in matters such as insolvency proceedings where there is a real concern that a respondent may dissipate funds or dispose of assets in order to frustrate any litigation. There will not always be time to fully evaluate the full circumstances; therefore, the risk of an adverse costs order can be very real.
In the eventuality that the injunction is lifted or found to have been wrongly granted, the claimant can face a costly bill. Consequently, the applying party will be asked to provide a cross undertaking in damages, and this will often need to be fortified.
However, there is an insurance product in the market that can protect the claimant from the exposure to any adverse costs resulting from an interim injunction. This is called cross undertaking in damages cover (CUDC).