When should I raise conduct in Financial Remedy Proceedings?

When deciding on the fairest division of the assets, the Court will take into account factors listed in section 25(2) of the Matrimonial Causes Act 1973. One such factor is the conduct of the opposing party, but when should this be argued, and what conduct would be considered relevant in a financial case?

When will the Courts consider conduct?

It is very rare that a conduct argument will succeed. In the leading case of Miller v Miller; McFarlane v McFarlane, the House of Lords made clear that only in very exceptional circumstances will conduct be considered. In OG v AG (Financial Remedies: Conduct), Mostyn J was very clear that “The financial remedy court is no longer a court of morals. Conduct should be taken into account not only where it is inequitable to disregard but only where its impact is financially measurable.” This in itself is not a very helpful indication hence reference to case law and precedent is required.

The Courts have repeatedly made it clear that any conduct must be so “gross and obvious” that a right-minded member of society would say it was of a level to justify a reduction or extinction of claims. This conduct, however, does not have to occur in the course of marriage, it may occur when the parties have separated.

If conduct is raised, whether or not such claims are successful depends on the individual facts of the case. However, it must also be shown that the bad behaviour caused financial impact.

In OG v AG, Mostyn considered that there were four separate scenarios in which conduct may arise:

1. Gross and obvious personal conduct that is ‘meted out by one party against the other’. For example, in Jones v Jones, the Court held that it would be inequitable to disregard that the wife had been made unable to work after her husband attacked her. If this is found, the Court may look at altering the division of the assets in order to reflect the misconduct.
2. Where one party spends wantonly or recklessly in order to diminish the pool of matrimonial assets, so as to affect the equitable split of the assets upon divorce. If found, the Court would ‘add back’ the dissipated assets to the pool and divide the assets as if they hadn’t been spent. This does not create new assets, however, merely reallocates who bears the cost of them.
3. Litigation misconduct. This would usually be penalised in the form of a costs order being made against the other party, i.e. being ordered to pay some or all of the other party’s legal costs incurred.
4. In some situations, the party’s conduct may imply that an asset exists but has never been disclosed into the proceedings. In NG v SG and Moher v Moher, the Court considered that where there was sufficient evidence to imply that an asset exists but has not been disclosed, the Court may make an adverse inference against the non-disclosing party. If so, the Court must attempt to quantify the non-disclosed asset and add it to the pool of assets.

Should I raise conduct?

It can be tempting to raise your partner’s bad behaviour when seeking a financial remedy, and the form which parties complete with their financial disclosure (Form E) specifically has a box to complete. However, it is worth pausing to consider the impact this could have on the likelihood of your matter settling outside of Court. The Courts are clear that raising points that do not meet the threshold are likely to promote an unconstructive and adversarial relationship between divorcing parties, which is likely to mean the matter will not settle without going to Final Hearing therefore incurring extensive costs in the process and elongating the process.

At Johnson Astills, we have the expertise and experience to advise whether to raise conduct as an argument or not and would be more than happy to discuss your requirements further. Please call us at our office in Leicester on 0116 255 4855 or our office in Loughborough on 01509 610 312 and ask to speak to a member of the Family Team. Alternatively, you may prefer to email us at legal@johnsonastills.com or fill in our enquiry form.