Interdicts are the Scottish equivalent of injunctions. An interdict is a court order that tells another person/corporate body not to do something that infringes your rights. For example, interdicts are often sought by employers who are concerned that an employee moving to a competitor firm intends to take existing customers and/or trade secrets with them. Interim interdicts are protective in nature and are often raised at the outset of an action. For this very reason there is often an element of urgency in raising proceedings. Whilst circumstances are often urgent, there are potential repercussions to raising interim interdict proceedings and a party considering such action would be well advised to take stock and understand their risks and potential exposure if things ultimately do not go their way.
In the case of Aird Geomatics Limited and Others against Richard Stevenson and another  CSOH 57 Lord Pentland became the most recent judge to remind us that a Pursuer seeks interim interdict at their own risk.
In this case Lord Pentland provided a stark reminder that if a Pursuer obtains interim interdict and it is subsequently recalled, the interdict will be classed as ‘wrongous’ and the Pursuer will be liable to the other party for any losses incurred as a result of the interdict. Whilst the Court may recognise some exceptions to this general rule, they are limited.
In this case the Pursuers obtained interim interdict against the First Defender, a pervious employee of the Pursuers. The First Defender did not have a caveat in place to give him advance warning of the Pursuers’ intentions and interim interdict was granted ex parte (i.e. in the defender’s absence). The interim interdict was only recalled 8 months later, once the First Defender had been granted legal aid. At the recall hearing the Lord Ordinary was satisfied that the Pursuers had cleared the first hurdle and pled a prima facie case (a case at first impression) but held that the order had a disproportionate impact on the First Defender’s ability to obtain employment and as such, the balance of convenience favoured no award.
The First Defender subsequently sought damages for wrongous interdict and the case came before Lord Pentland on the First Defender’s motion for summary decree. Whilst the First Defender argued that recall of the interim interdict amounted to conclusive proof that the order had been wrongfully obtained, Lord Pentland heard arguments from the Pursuers that there was a distinction between what the Pursuers described as a pure recall and a recall after the facts and circumstances of the case had been considered. Lord Pentland rejected the Pursuers’ arguments and held that his decision was supported by case law stemming back as far as 1862. Lord Pentland held that examination of this case law showed:
‘there was a clear line of authority supporting the proposition that, in general, recall of an interim interdict amounts to conclusive proof that the order was wrongously obtained. This rule may not apply in cases where recall has been granted because of a material change in circumstances. This rule may not apply in cases where recall has been granted because of a material change in circumstances.’
Lord Pentland held that it was misconceived of the Pursuers to contend that recall of interim interdict was only conclusive proof that it had been wrongfully obtained where there had been an examination of the facts. The case law did not place any such limitation on the application of the rule and there was no support for it in the authorities.
Whilst Lord Pentland was clear that recall of interdict is conclusive presumption it has been wrongously obtained, the onus then lies with the Defender to prove that they have suffered losses and what those losses look like. As such, the case was set down for a proof to determine what, if any, losses the First Defender had suffered as a result of the wrongous interdict.
This decision brings into focus one of the risks that a Pursuer must accept if takes interdict action: an interdict order may be recalled at a later date and if it is, the Pursuer will be liable for damages to the Defender. A Pursuer finding themselves in this situation may still have scope to defend the damages action and consideration should be given to the cause and value of damages sought by the Defender.
Whilst the Court’s clear cut approach to wrongous interdict is helpful to Defenders, Defenders must satisfy the Court that they have indeed, suffered losses as a result of a wrongous interdict before the Court will award damages. That process in itself can be time consuming and a Defender’s best option to avoid losses is to avoid interim interdict in the first place. A caveat is a cheap and cost effective document that can be lodged at court to provide a potential Defender with advanced notice that a Pursuer is seeking interdict against them before any orders are granted. This gives the Defender the opportunity to be heard at the very first hearing and maximises their opportunity to avoid interdict being granted.