knowledge | 20 March 2020 |
COVID-19: Seeking Injunctive Relief Before the Courts
The current unprecedented global crisis may find businesses needing injunctive relief from the courts.
While the work of the courts has been greatly scaled back in response to the outbreak of COVID-19, at the time of writing, the Courts Service has indicated that the High Court would continue to deal with certain urgent applications including injunctions and their enforcement.
In this context, it is important to note that the test for prohibitory injunctive relief in Ireland was recently re-examined by the Supreme Court. In Merck Sharp & Dohme v Clonmel Healthcare,1 that court gave judgment in an appeal against a refusal to grant an interlocutory injunction in a patent case.
However, this case is important in a wider context as O’Donnell J discussed the traditional test in American Cyanamid2 which was adopted in this jurisdiction in Campus Oil3 and gave his view on how the courts should approach interlocutory prohibitory injunctions generally. In doing so, he significantly restated aspects of the traditional approach. His comments have wide application across many areas of practice.
In summary, O’Donnell J held that:
- The first matter that the court should consider when asked to grant an interlocutory prohibitory injunction is whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an injunction seeking the same relief should be granted at the interlocutory stage;
- The applicant must establish that there is a fair question to be tried. This “may also involve a consideration of whether the case will probably go to trial.” This second factor also plays into an assessment of where the balance of convenience lies, or as O’Donnell J also called it, the balance of justice. When looking at this balance the court “should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit”;
- If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience;
- The most important element in that balance is, in most cases, the question of adequacy of damages;4
- In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;
- Difficulty in assessing potential damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial;
- While the adequacy of damages is the most important component of any assessment of the balance of convenience, other factors may be weighed in the balance in considering how matters are to be held most fairly pending a trial, while still remembering that there is a possibility that there may be no trial.
Finally, O’Donnell concluded that while this structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined. He also reiterated comments made by the judiciary over the years that the Campus Oil guidelines are just that – guidelines.
How can we help?
The Disputes Group at McCann FitzGerald can assist organisations in addressing their concerns in and around a wide range of regulatory and litigation issues business may face in responding to COVID-19. Alternatively, your usual contact in McCann FitzGerald will be pleased to provide further information.
-  IESC 65.
- American Cyanamid Co v Ethicon Ltd  AC 396.
- Campus Oil v The Minister for Industry (No. 2)  I.R. 88.
- This involves considering two hypotheses and balancing the outcome. If the plaintiff is refused an injunction but succeeds at the trial would he or she be adequately compensated by an award of damages at the trial? On the other hand, if the defendant is restrained by injunction, but nevertheless succeeds at the trial, would he or she be adequately compensated by the award of damages pursuant to the undertaking for damages which the plaintiff is required to give at the time of the grant of the injunction? In either case, it is also relevant to consider if a party is capable of meeting any award of damages made against it.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.