Will I be compensated for my spouse’s behaviour in our divorce?

The Court’s approach to conduct in financial remedy proceedings on divorce by the way the other party has behaved within their relationship.  This is often the case when a third party has been involved in the breakup.

With the introduction of the Matrimonial Causes Act 1973, which is still the backbone of our current divorce legislation in 1973, the idea of a “matrimonial offence” was no longer law.  Adultery is therefore irrelevant in relation to the amount of a financial settlement awarded.

However, human nature being what it is, there are many cases where at least one party feels that there should be some recognition, or compensation, for the wrongs they have suffered within their relationship.  It can be difficult for an injured party to accept that the Court is not going to take these into account.  Particularly when this seems to conflict with legislation:

Conduct remains a specific factor to be taken into account under section 25 of the Matrimonial Causes Act 1973 (MCA 1973) and Schedule 5, Part 5 to the Civil Partnership Act 2004 if that conduct is such that it would ‘in the opinion of the court be inequitable to disregard it’.

Therefore, the relevant law clearly suggests that the Court will consider the conduct of the parties as a factor when making a financial award. It is therefore not surprising that it can be tempting for parties to list details of each other’s bad behaviour.  Indeed, there is a section in the Form E (standard Court form for financial disclosure) that specifically asks for details of conduct, although with the proviso that bad behaviour or conduct will only be taken into account ‘in very exceptional circumstances’.

However, it is rarely the case that conduct is relevant within financial order proceedings.

The nature of the conduct

For conduct to be relevant within financial order proceedings, it must be of a type that would be ‘inequitable to disregard’..  Prior to the 1973 Act case law established that such behaviour needed to be ‘gross and obvious’, i.e. of the type that a right-minded member of society would say was of a level to justify a reduced or dismissed claim.

The leading case is Miller v Miller (2006); McFarlane v McFarlane (2006), in which it was made clear by the approach taken by the House of Lords that conduct arguments can only be run successfully in truly exceptional cases.  In fact, in the majority of cases, fairness does not require consideration to be given to the parties’ conduct.

In OG v AG (Financial Remedies: Conduct) (2020), Mostyn J identified four distinct scenarios in which conduct can be raised in financial remedy proceedings:

1. gross and obvious conduct that is ‘meted out by one party against the other, normally, but not necessarily, during the marriage’, which can include economic misconduct;
2. the ‘add-back’ jurisdiction, where ‘one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property’;
3. litigation misconduct, if proved, will usually be penalised in costs, although the outcome achieved still needs to be a fair outcome which reflects all the relevant circumstances and gives first consideration to the welfare of any children; and
4. the evidential technique of drawing inferences as to the existence of assets from a party’s conduct where that party has failed to provide full and frank disclosure.

‘Gross and obvious’ conduct needs to be so severe that it would ‘in the opinion of the court be inequitable to disregard it’.  There is extensive case law, but examples of the type of behaviour which has historically been found to be relevant conduct are where a husband had sexually assaulted his grandchildren, taking and making indecent photographs of them and communicating this on the internet; another where a wife connived in the husband’s suicide attempts in order to gain assets;  and another case where the husband had attacked the wife after decree absolute, rendering her virtually unemployable .

Financial misconduct can also qualify, but it would still need to be deemed gross and obvious, and inequitable to disregard.  In 2023, HHJ Madeleine Reardon found in DP v EP (Conduct; Economic Abuse; Needs) that a wife’s handling of the matrimonial finances unbeknown to her illiterate husband, fell within the definition of economic abuse as set out in the Domestic Abuse Act 2021.  As a result, the wife was awarded slightly less than half the matrimonial assets, but also she was ordered to pay 75% of her husband legal fees.

However, despite the above, the most important single factor in assessing the amount of any order is needs.

Add-back or re-attribution of assets

In cases where the parties’ assets exceed their needs, the court may be prepared to ‘add-back’ assets that have been dissipated by a party, generally where such expenditure has been ‘wanton’ or ‘reckless’.

This is a slightly different argument to seeking some form of compensation or reduction of the other party’s award because of their conduct.

However, as highlighted by Mostyn J in BJ v MJ (Financial Order: Overseas Trust) (2011), an add back argument does not re-create any actual money.  Given that the most important factor in assessing the amount of an order is needs, Mostyn cautioned that an add back argument should only be applied when the dissipation is “demonstrably wanton”.

In the recent case of YC v ZC (2022)  HHJ Hess describes a ‘depressingly self-destructive picture’, with both parties ‘engaged in relentless and destructive warfare against the other in terms of conduct allegations.’  He concluded ultimately that both parties had made poor decisions, and that they cancelled each other out.

There are also potential costs implications involved in running inappropriate and ill-advised conduct arguments.

It is therefore essential that specialist advice is taken by a party hoping to run a conduct argument.   As to whether such an argument is appropriate, and if so, thereafter the steps to be taken, requires detailed knowledge of this area.

For specialist advice concerning these issues, or any arising from a relationship breakdown, please contact a member of the Family Team here at Field Seymour Parkes.