DELETE THE FIRST SENTENCE AFTER AFTER THE HEADING "CLAIMANT'S UNDERTAKING", AND REPLACE WITH THE FOLLOWING:  Interim injunctions are stop-gap remedies, which are granted on the basis of what is necessarily an incomplete picture.  In deciding whether to grant such a remedy, the court will therefore wish to be satisfied in two respects:  that an ultimately unsuccessful claimant can be obliged to compensate the defendant for having "wrongly" stopped his proposed activity, and that there is good reason to believe that the obligation will be honoured.  The first of these is addressed by the giving of an "undertaking in damages" [81a]:  a claimant is almost invariably required [82] to give such an undertaking; and an undertaking to this effect (unless expressly disavowed) will be implied if the court grants an injunction or accepts an undertaking in lie thereof [83].

DELETE THE SENTENCE WHICH FOLLOWS THE REFERENCE TO NOTE 84 AND REPLACE WITH THE FOLLOWING:  Unless the court otherwise orders, an order for an injunction must contain an undertaking by the applicant to the court, to pay any damages which the respondent(s) (or any other "party" served with or notified of the order) sustain which the court considers the applicant should pay[84A].  The court will normally enforce such an undertaking to pay damages, if at the trial it appears that the injunction was wrongly granted[85], whether because the claimant is unable to prove at the trial the case he alleged at the granting of the injunction, or because the court granting the injunction took a wrong view of the law[86].  In relation to freezing orders, the practice is to require an undertaking whether the injunction is made before or after judgment[86a].

ADD NEW NOTE 81A:  The grant of the injunction does not itself confer any right to compensation for loss or damage:  SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658.  The need for a cross-undertaking is not absolute; but its existence is a "very material consideration" when considering whether an injunction should be granted:  SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, at [26] (Jacob LJ).

NOTE 82:  INSERT AT BEGINNING OF NOTE:  The requirement takes the form of refusing to grant injuncive relief unless a suitable cross-undertaking is given: see SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, at [24], [126] and [127], applying the dictum of Lord Diplock in Hoffmann-La Roche & Co A.G. v Secretary of State for Trade and Industry [1975] A.C. 295 , 329 (H.L.), at 361; also A-G v Albany Hotel Co [1896] 2 Ch 696, at 699 per North J.

NOTE 83:  DELETE, AND REPLACE WITH THE FOLLOWING:  See Tucker v New Brunswick Trading Co of London (1890) 44 Ch.D. 249 (cross-undertaking implied upon grant of interim injunction, at least where the cross-undertaking is sought), and Oberrheinische Metallwerke GmbH v Cocks [1906] W.N. 127 (cross-undertaking to be implied where undertaking given to the court); see also [2006] L.M.C.L.Q. 181 (S. Gee Q.C.).  A cross-undertaking given to the court is not retrospective, and will therefore only affect damages which are suffered by a person after (a) being joined as a party to the proceedings or (b) being served with (or notified of) the order:  see Smithkline Beecham plc and others v Apotex Europe Ltd and others [2005] EWHC 1655 (Ch) at [41] and [49] (not challenged on appeal - see [2006] EWCA Civ 658 at [17] and [22].

NOTE 84:  ADD:  Where the court accepts a more limited form of undertaking (whether by mistake or otherwise) the position is different, and the order should stand as made:   Smithkline Beecham plc and others v Apotex Europe Ltd and others [2005] EWHC 1655 (Ch) at [37] and [58]:  but see [2006] LMCLQ 181 (S. Gee Q.C.) at pp.199-200.

INSERT NEW NOTE 84A:  CPR 25PD, para. 5.1.  The meaning of the word "party" is not clear, and it may be that (unless the court otherwise orders) the cross-undertaking will extend only to losses suffered by people who are parties to the proceedings:  see SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658 at [29].  This ambiguous term is repeated in the relevant practice forms (see PF39CH - Order for an Injunction (intended action), and PF40CH - Order for an Interim Injunction); but if the undertaking is actually given in those terms the ambiguity would probably be resolved by a strict (rather than a purposive) construction:  see [2006] LMCLQ 181 (S Gee Q.C.), at 198-99, which also raises concerns in respect of the cross-undertaking to be implied under paragraph 5.22 of the Chancery Guide and (at p.200-01) proposes a different (and more onerous) cross-undertaking.  Save in respect of freezing orders, undertakings for the benefit of third parties have not routinely been granted, even after the practice direction came into effect in 1999:  see eg Miller Brewing Co v Mersey Docks & Harbour Co [2003] EWHC 1606 (Ch), at [44]-[46] (criticised at [2006] LMCLQ 181 (S. Gee Q.C.) at pp.196-8); cf Imutran Ltd v Uncaged Campaigns Ltd [2002] FSR 2.  In March 2005, the standard form of interim injunction was amended so as to reflect CPR 25PD 5.1:  it may be that this will result in a change of practice.

INSERT NEW NOTE 86a: Banco Nacional De Comercio Exterior S.N.C. v. Empresa De Telecommunicaciones De Cuba S.A. (British Telecommunications plc intervening), at [41].  There may be exceptional cases where no undertaking is required (eg where the third party was not innocent):  ibid, at [43]

NOTE 87: ADD: For a case where the amount payable was calculated by reference to the change in capital value of the defendant company, see Johnson Control Systems Ltd v Techni-Track Europa Ltd (in administrative receivership) [2003] EWCA Civ 1126

NOTE 94: ADD: See also para.16—14.