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Lucy James explains how freezing orders can throw a spanner in the works in divorce proceedings
- In a divorce, a freezing order can preserve the matrimonial estate for allocation and distribution—usually through an application under s 37 of the Matrimonial Causes Act 1973.
- Practitioners should be beware of ‘sham’ transactions, which can drag third parties into divorce proceedings, often due to informal loan arrangements.
Would business partners ever expect to find themselves in a situation where they cannot deal with their assets because they have been frozen by the divorce courts in the course of a matrimonial dispute involving one of their partners? Unfortunately, this is not an entirely hypothetical situation but can be a reality, particularly when ultra-high-net-worth (UHNW) individuals are involved in the process of a divorce with their spouse, and are looking to include business assets in the matrimonial estate.
Indeed, freezing orders—a remedy often viewed as the ‘nuclear weapon’ in civil proceedings—are not limited to high-value commercial or fraud claims; they can be deployed in other High Court proceedings
