Cross-border frauds – investigation and evidence gathering

Serious fraud these days almost invariably features an international dimension. This month Deirdre Walker and Peter Scott of Norton Rose begin a series of articles on the challenges posed by cross-border investigation and evidence gathering in relation to a defendant’s assets. It is assumed throughout that the fraud is sufficiently connected to England or Wales to enable a freezing injunction to be sought there.

Deirdre Walker is a partner in Norton Rose’s Dispute Resolution Department. She can be reached on tel +44 (0)20 7444 2633, email deirdre.walker@nortonrose.com. Peter Scott is an associate in the same area. He may be contacted on tel +44 (0)20 7444 3834, email peter.scott@nortonrose.com.

Freeze and find

A freezing injunction is both a means in itself and a means to an end. Its primary function, as the name suggests, is to freeze the assets of the defendant thereby protecting the client’s position. Its secondary, but equally important function, is as a means to further investigate the defendant’s assets and, hopefully, to facilitate the recovery of the claimant’s loss. This dual purpose of the freezing injunction can cause conflict. The victim of a fraud is naturally concerned to obtain the injunction as soon as possible; the longer the delay in applying for the injunction the greater the risk of dissipation of the defendant’s assets. However, apply too quickly for an injunction and there is a risk that the case may not be made out or alternatively that the injunction will fail to specify key assets on its face, allowing the fraudulent defendant to dissipate those assets. This may compromise the injunction’s function to assist with the ultimate recovery of assets.