Interim interdict: when is it really effective?

Interim interdict can be an extremely effective litigation remedy that, at its most basic, will stop a party from suffering further damage or loss while an action is underway. In practice, the effect of the order (or refusal to grant one) may be much greater and can often bring parties to settlement after a preliminary judicial determination. 

An interdict is the Scottish equivalent of an injunction order in England and Wales. In Scotland, a party can seek an interdict in the Sheriff Court or the Court of Session to prevent a party from doing something. It can be sought in respect of (i) a wrong that is ongoing; or (ii) an anticipated wrong. At the outset of the court action, the pursuer can also apply to the court for an interim interdict (although they remain entitled to make such an application at any time). Unlike many other jurisdictions, an application for interim interdict in Scotland will often be heard on an ex parte basis, meaning that the defender will not be present to make their own submissions in opposition to the order. Protective measures against interim interdict orders are discussed below. If granted by the court, the interim interdict protects the pursuer from the wrong while the court proceedings are ongoing.  

The test

To obtain an interim interdict, the party seeking the order must satisfy two requirements:

1. They must demonstrate that they have a prima facie case that the order is granted: that their case has a colourable chance of success; and
   
   
2. That the balance of convenience favours the order being granted (the court will only consider this part of the test if the first part is overcome). That is, that the pursuer will suffer greater inconvenience if the order is not granted, than the inconvenience the defender will suffer by having their rights interfered with.

In assessing the balance of convenience, the court will weigh up the interests of each party. The pursuer must convince the court that refusing the order would cause more inconvenience, prejudice or harm to them than granting it would do to the opposing party. For example, interim interdicts are frequently sought in respect of the infringement of intellectual property rights, such as trade marks. If the court is of the view that continued infringement would cause reputational damage to the applicant’s brand and / or affect their business, that would weigh in favour of the interim interdict being granted. On the other hand, if the court believes an award of monetary damages would be a sufficient remedy in respect of the infringement, that may well weigh against the grant of interim interdict.

Protective measures – caveats

As noted above, an interim interdict can be granted without the opposing party receiving any prior notice of the application. However, it is possible to implement protective measures against such orders being granted without an opportunity to be heard. If a party has lodged a letter of caveat at the relevant court, they will be provided with advance notice of any such application. In those circumstances, interim interdict (and certain other interim orders) cannot be granted against that party without notice first being given.  

It is recommended that those with business and/or property interests in Scotland consider lodging caveats in both the Court of Session and all relevant sheriff courts. You can read more about caveats and how they can protect you or your business in our caveat guide.

Following notification of grant of an interim interdict, it is possible to apply for recall of it. Very often this will be done if the party against whom the order is granted has information affecting the court’s assessment of the balance of convenience.

Wrongful interdict

By their nature, interim interdict orders are typically sought in emergency circumstances. It can be a challenge to ensure you give the court the full picture with little notice – but it is essential the pursuer endeavours to do so. For this reason, obtaining interim interdict is always at the risk of the party seeking it. If it turns out it was not justified, damages for wrongful interdict may be payable. Wrongful interdict claims usually arise in two circumstances: 

1. Where the party subject to the interim interdict applies for and successfully obtains recall. In such applications, the court is asked to apply the same test as outlined above again, with the benefit of the defending party’s version of events; and
    
2. Following a hearing of all the evidence the court decides that a permanent interdict should not be granted. 

In either case, damages are payable for the losses suffered during the period the interim interdict was in place. In the recent appeal in McGowan v. Springfield Homes plc the Inner House of the Court of Session upheld that recall of an interim interdict is conclusive that it was wrongfully obtained. The party seeking the order proceeds at their own peril.

In the same case, it was also held that the five-year time bar restriction to bring a claim for wrongful interdict does not start on the grant of the order. Rather, the interim interdict would be considered a ‘continuing wrong’ until the order is recalled. This decision puts some pressure on the pursuer to constantly review the situation. If they become aware of facts which mean that they are no longer entitled to the order, they risk ongoing damages if a voluntary recall is not sought.

Damages for wrongful interdict

But what damages can be recovered in a wrongful interdict claim? Firstly, there must be a causal link between the loss suffered and the grant of the interim interdict. If the loss would have been suffered regardless of the order, then it cannot be claimed. 

Losses which are so minor as to be considered de minimis cannot be claimed, though damages arising from the stress and inconvenience of the order can be considered. 

The Court of Session has recently found that there is no duty upon the party subject to the wrongful interdict to mitigate its loss by seeking to recall that interdict. Following on from the Inner House’s decision in McGowan that an interim interdict is sought at the pursuer’s own risk, the subsequent proof on damages held that this rationale also applied so far as damages were concerned. Any perceived failure by the subject of the interdict to seek a recall cannot be relied upon as a reason to limit the calculation of their loss.

Conclusion

Orders for interim interdict should not be sought lightly. The balance of convenience test is not just an assessment for the court to make, but also one for the prospective pursuer. Is the potential harm suffered by not seeking the order greater than the harm they might suffer if the order is granted but later recalled? If not, perhaps it is better not to rush into court for an interim interdict at the outset. It may well be something which can be sought at a later stage when the full facts, and possibly also your opponent’s position, are known.

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