Financial Remedy Proceedings: The Role of Conduct

When a court determines how finances are to be distributed on divorce, the primary focus is on achieving a fair and equitable distribution of assets between the parties involved, which meets their needs. Whilst non-financial conduct can play a role in most cases, it is not necessarily a factor that will be relevant to the outcome in financial remedy proceedings. On the contrary, conduct is only considered in very exceptional circumstances, as financial remedy proceedings primarily rely upon a transparent assessment of financial matters, as opposed to behaviour during the relationship or post separation.

At the outset of financial remedy proceedings, the parties are required to complete financial disclosure using a Form E and this invites parties to raise any issue of conduct. Although, in practice, more so than not, the relevant section in the Form E is left blank. This can be attributed to the fact that there is such a high bar set by the court when it comes to pleading conduct successfully, and so parties are advised against going down this route unless proportionate and relevant. Further, it could hinder matters if parties are seeking to mediate, or at the stage of meaningful settlement negotiations, as raising conduct issues could unnecessarily increase already heightened tensions.

In summary, the courts are more concerned with the parties’ finances, including income, assets, liabilities, and future needs. It is the courts’ objective to ensure the division of assets is just in so that this meets the requirements of both parties.  Unless conduct of either party has a direct impact on the financial situation or the fairness of the proceedings, it is unlikely to influence the outcome of the matter.

In exceptional cases, however, the conduct of one party may be relevant to the proceedings. The question is: What would be significant enough to affect the outcome? Case law has identified four main possible areas of misconduct, as follows:

• Personal: where conduct such as abuse has had a detrimental impact on finances e.g., a reduction in the value of assets or someone’s inability to work as a result.
• Add back: where a party has recklessly reduced the assets and is therefore treated as though they still hold more funds e.g., excessive expenditure on unnecessary items or gambling.
• Litigation: where a party has behaved so unreasonably in the proceedings that they have caused costs to escalate.
• Non-disclosure: where a party has refused to provide full and frank disclosure, leading to the court making assumptions about their true financial position.

Generally, a very high bar is set for conduct to influence the outcome, with conduct playing a minimal role unless circumstances dictate otherwise. This is also in line with the “no fault” divorce procedure which was introduced in 2022 to encourage a less confrontational approach to separation.

For further information, please contact the Family team on 01730 268211. 

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.