Interim Injunctions – new guidance

House of Lords rules on test to be applied

The House of Lords has today handed down its judgment in the important case of Cream Holdings v Banerjee & Others.

The full judgment is available now at the 5RB website, together with a full case report. Lord Nicholls gave the leading judgment and the four other Law Lords concurred.

In summary, the appeal from the Court of Appeal decision was allowed and the original injunction imposed by Lloyd J was discharged in relation to information already passed to the Liverpool Echo by Ms Banerjee.

As to the test to be applied by the Courts on an application for an interim injunction, Lord Nicholls held (para 22):

“There can be no single, rigid standard governing all applications for interim restraint orders. Rather, on its proper construction the effect of section 12(3) is that the court is not to make an interim restraint order unless satisfied the applicant’s prospects of success at the trial are sufficiently favourable to justify such an order being made in the particular circumstances of the case. As to what degree of likelihood makes the prospects of success ‘sufficiently favourable’, the general approach should be that courts will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably (‘more likely than not’) succeed at the trial.”

Courts will now have the power to grant an interim injunction in circumstances where substantial injustice would be done to the Claimant if no protection were offered to “hold the ring” pending trial. In most instances, however, a Claimant will be expected to show that it is more likely than not that he will succeed at trial.

The case still leaves unexplored (and unresolved) the apparent conflict – at an interim injunction stage – between s.12 Human Rights Act 1998 and Bonnard -v- Perryman [1891] 2 Ch 269.