Undertaking in damages

by Practical Law Dispute Resolution

This Practice note provides guidance on the undertaking in damages, also known as the cross-undertaking. The undertaking in damages is the applicant's promise to the court to compensate the respondent for any losses it suffers if it is later determined that the relevant interim relief, such as an interim injunction, freezing order, or search order should not have been granted. It is commonly regarded as the "price" an applicant pays for obtaining the interim order. The note explores the fundamental principles, including the limited circumstances in which the undertaking may be dispensed with, such as in certain public interest cases. It addresses whether the undertaking should be limited or unlimited, noting the default position (unlimited) and the burden on an applicant to justify any departure from it. It provides valuable insights into the fortification of an undertaking, discussing when and how an applicant may be required to provide security. It also examines enforcing an undertaking, including the role of the court's discretion and the process for assessing damages.