Will the court take my ex’s bad behaviour into account when dealing with the financial division?

When we are dealing with the division of the finances on divorce, clients will often raise issues around the other party’s bad behaviour which they feel should be taken into account. Indeed, when completing the Financial Statement within financial proceedings box 4.4 of that form asks you to set out bad behaviour or conduct that you want taken into account, it does however clearly state that it will only be taken into account in exceptional circumstances – so what behaviour is taken into account?

What is “conduct”? This is set out in s25 (2) of the Matrimonial Causes Act 1973 as “the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it.”

However, we have to look at the cases that have considered conduct issues to see what types of conduct would be taken into account.  There are effectively 4 types of conduct:-

1. Personal misconduct 
2. Add Back
3. Litigation Misconduct
4. Adverse inferences

Personal Misconduct

Phrases used to describe the types of personal misconduct that the court will take into account have been “gross and obvious” or that they have the “gasp” factor.  A lot of the reported cases on this issue have involved serious violence, including attempted murder and a conviction for having hired someone to kill the Husband. 

The misconduct has to be exceptional, and therefore the test for such conduct to be taken into account currently remains very high.

Add Back

This phrase refers to the instance of someone dissipating assets that would have been part of the matrimonial pot.  However, this is not just about spending money frivolously, it has been defined as the wanton and reckless dissipation of assets, either by deliberately hiding assets or squandering them.  Again, the test is for it to be exceptional and notable cases where it was not found to be exceptional included a case where the Husbands use of the marital assets for drugs and sex workers did not meet the test for “wanton and reckless dissipation”.

Litigation Conduct

This is conduct where there has been disregard for the duties of disclosure, dishonest presentation of the assets, a failure to negotiate, or even where a party has run a case that is bound to fail.  Usually, the penalty for such conduct is by way of orders for the offending party to pay the other persons costs.

Adverse Inferences

This phrase refers to cases where one of the parties has failed to provide full and frank financial disclosure, and the court draws inference from the parties conduct in failing to provide the information.  The potential outcome is that the party who has not provided full disclosure of their assets, is nevertheless deemed to have access to more assets than they have disclosed.

What should I do if I am raising conduct?

If you consider that the type of conduct you are raising falls into the above categories and is “exceptional” and “inequitable to disregard”, what should we be doing? Conduct should be raised at the earliest opportunity, it should be detailed clearly and it is important to set out exactly how it meets the threshold and to demonstrate that it has had a financial impact.  It is not just the fact of there being conduct, but there also needs to be an identifiable financial impact due to that wrongdoing. 

If the court agrees that there has been conduct and that there is a financial impact, then it can go on to consider how that should impact on the outcome of the financial approach.

Domestic Abuse and a possible change in approach

There has been recent discussion about whether domestic abuse is taken seriously enough in financial remedy proceedings.  In particular in October 2024 the report by Resolution on ‘Domestic Abuse in Financial Remedy Proceedings’ was published and we expect the Law Commission report on financial remedies due in November/December 2024 to also address this issue.

The Resolution report calls for a cultural shift from all family justice professionals to better meet the needs of victim-survivors of domestic abuse seeking the resolution of their finances on divorce. The report raises that much more must be done to prevent domestic abuse from being perpetrated post-separation, through negotiations, out of court dispute resolution options and through proceedings. It also calls for an explanatory Practice Direction which amongst other things should clarify the current law around conduct making it clear that the current approach of the courts to ‘conduct’ under s 25(2)(g) of the MCA 1973 leads to unfair outcomes for some victim-survivors of domestic abuse. 

The full details of this report are for another discussion, however it was clear from the survey carried out to inform that report that the some 80% of responses felt that domestic abuse is not taken seriously enough in financial proceedings.

However, at the moment any conduct, including domestic abuse, continues to need to satisfy the test of exceptionality and that there should be an identifiable financial impact. It remains to be seen if this will change in the future.

HOW CAN WE HELP?

To find out more about how our team of Family Law experts can help you, do not hesitate to get in touch today on 0330 123 1229, send us an email via info@smithpartnership.co.uk or complete our contact form.