Conduct in financial remedy proceedings upon divorce

Often when a marriage breaks down irretrievably, the parties understandably wish to consider and reflect on the possible causes that resulted in the failure of the marriage. This often means consideration of alleged conduct and possible blame.

This article briefly explains the courts approach to such conduct when asked to determine the divide of matrimonial assets (‘who gets what’).

When dividing matrimonial assets, the court applies section 25 of the Matrimonial Causes Act 1973. Conduct is not usually a central factor and will only be considered if it would be inequitable to disregard it, which sets a high threshold. In practice this means that:

• The court does not punish bad behaviour.
• Ordinary marital misconduct (e.g. affairs, arguments, poor behaviour during the marriage) is irrelevant.
• Conduct must be exceptional and obvious to affect the outcome.

So, what are the types of conduct that the court may consider?

1. Gross financial misconduct:

This is the most common form of conduct considered and examples include:

• Deliberate dissipation or reckless spending of assets.
• Gambling away substantial matrimonial funds.
• Hiding, diverting, or fraudulently disposing of assets.
• Incurring significant debts for non-marital purposes.

When this gross financial misconduct is determined by the court, the court may:

• “Add back” dissipated funds notionally.
• Adjust the division to reflect the loss caused.

• Litigation conduct:

Conduct during the proceedings themselves may be relevant, particularly where it affects fairness or costs, such as:

• Failure to give full and frank disclosure of the finances.
• Deliberate non-compliance with court orders.
• Dishonesty or obstruction of proceedings.

• Personal and/or marital conduct:

As noted above, personal behaviour will rarely be relevant, even if morally reprehensible.
However, it may be considered where:

• The conduct is exceptionally serious.
• It has a direct financial impact on the other party.

Rare examples of such conduct include:

• Violence causing long-term inability to work.
• Conduct leading to significant financial loss or ongoing needs.

• Conduct affecting needs

Even where conduct does not alter asset division, it may:

• Increase one party’s financial needs.
• Reduce the other party’s ability to meet those needs.

This is not punishment, but a recognition of practical financial consequences.

Overall, in respect of conduct there is a high threshold applied by the court

The test is whether it would be “inequitable to disregard” the conduct and most cases do not meet this standard. As shown above, for conduct to affect the court’s division of matrimonial assets, it must usually be conduct that results in a serious negative financial consequence for the other party. Courts consistently warn against:

• Turning financial remedy proceedings into moral judgments.
• Allowing conduct arguments to increase conflict and costs unnecessarily.

Ultimately, the focus remains on fairness, needs, and available resources.