What level of risk of dissipation of assets is required for the grant of an asset freezing injunction?
In the recent decision of Les Ambassadeurs Club Ltd v Yu  EWCA Civ 1310, the English Court of Appeal clarifies the meaning of "a real risk of dissipation" in the context of asset freezing injunctions.
An injunction freezing the assets of a defendant, whether before or after judgment, is a potent (some judges have described it as "nuclear") weapon in the armoury of the Court to deal with those who would seek to render themselves judgment-proof by putting their assets beyond the reach of a judgment creditor. There is an important distinction in this context between a defendant who can pay but subsequently refuses until compelled to do so, and one who is so determined not to pay that they will take active steps to frustrate the recovery of money they owe, by transferring or concealing their assets or some other form of unjustified dissipation. Because an asset freezing injunction is a drastic interference with a person’s right to do as they wish with their assets, the Court is vigilant to ensure that such an injunction is granted only where there is a real risk of a judgment going unsatisfied by the unjustified dissipation of assets. This is one of the conditions required, the others being that the claimant has a good arguable case on the merits of its claim, that there are assets held by or on behalf of the defendant within the geographical area of the injunction sought, and that in all the circumstances it is just and convenient to grant the injunction.
What constitutes "a real risk of dissipation"? Courts have adopted expressions such as "more than fanciful" and "more than insignificant", but these are merely labels for a level of risk below the required threshold. In this decision, the English Court of Appeal clarifies that the test is whether, on the facts and circumstances of the particular case, the evidence adduced before the Court (which must be cogent) objectively demonstrates a risk of unjustified dissipation which is sufficient in all the circumstances to make it just and convenient to grant the injunction. A risk that is fanciful, theoretical or insignificant will not meet that threshold. However, the Courts should seek to address the question as to whether or not it is satisfied that the alleged risk is real, which does not require any comparative exercise or the attaching of labels to a risk that falls short of the threshold.