Bad Behaviour in Divorce – When does it matter?

An outline of when the Court will consider a party’s conduct in deciding the appropriate division of financial resources on divorce.

At Blanchards Law, we understand that your ex-spouse’s behaviour during divorce proceedings can often be infuriating – but when does it cross a line into something that the Court should consider?

Before we delve into the rare situations where the Court will look at bad behaviour, you can be reassured that at Blanchards Law, we will deal with any behavioural issues robustly and we encourage you to contact us if you are going through a divorce and feel that your ex-partner is treating you unfairly.

The “Section 25 Factors”

These are the key factors that a Court can take into account when considering how to divide the parties’ assets on divorce. These factors are listed within section 25 of The Matrimonial Causes Act 1973 and comprise such matters as income and other financial resources, needs of the parties , standard of living, parties’ ages and any disability, contributions and the welfare of any young children.

Conduct is also included in the factors, but the threshold for the Court to consider it is very high – it must be so significant  that, in the opinion of the Court, it would be inequitable to disregard it. So, what does this really mean?

Firstly, this conduct can be conduct during the marriage, or after the separation – during the divorce/dissolution proceedings.

Most commonly, the court will look at financial misconduct or litigation misconduct. Issues such as whether there has been coercive control in a relationship are not normally taken into account by a judge.

Financial Misconduct

Dissipation of Assets

Most commonly, conduct that may clear this hurdle and be considered by the Court, is conduct of a clearly financial nature, i.e. conduct that has a direct impact on the financial resources of the divorcing parties. This will most often be where one party’s behaviour has had the effect of dissipating the pool of resources to be divided upon the divorce. Examples of this are one party spending large amounts of the joint funds or ‘gifting’ joint marital funds to others.

Other examples of dissipation include large gambling losses, excessive spending on luxuries and deliberately selling assets at a significant undervalue.

It is not enough for dissipation to have taken place; this dissipation must be ‘wanton’ – this is most often interpreted as “reckless” dissipation. This means doing something and not caring about the outcome. There certainly may be cases where large dissipation of the resources by one party is reasonable, especially if the spending did not impact the parties’ standard of living. This happened in  the case of F v F [2012] EWHC 438 (Fam) where the Husband made substantial lifetime gifts to four of his children from a previous marriage. The wife felt that he was doing this to try to reduce her claim against him, by reducing the size of the asset pool. The Judge decided that it was entirely reasonable for the husband do this. At the time, he was also giving gifts to his younger children and his wife.

Even conduct that might seem reckless and wanton, might not always be judged by the Court to be so – this is because, as highlighted above, the circumstances of the case and motivation are key. The spending might be irresponsible by normal moral standards, but it may not be assessed by the Court to be reckless and wanton based on the individual characteristics of the person involved. A person may not intend to spend wildly, or on inappropriate things, but that does not mean that they are doing so deliberately to reducing the other party’s claim. You cannot punish someone for their poor decision-making or their character traits. The Court is not there to make up for the deficiencies in the other person. In the case of MAP v MFP (Financial Remedies: Add-Back) [2015] EWHC 627 (Fam), [2016] 1 FLR 70 the wife told the Court that the husband had taken part in wanton and reckless dissipation of assets by spending £6,000 a week on cocaine, and further large sums on sex workers. Even in this extreme scenario, the Court found that whilst the conduct was certainly morally questionable, it did not amount to wanton or deliberate dissipation – the wife had to take her husband as he is, including his personality flaws leading to him spending on such things.

There must also be a causative link between the dissipation that has taken place and the resulting reduction in the pool of assets available to the parties.

Add-back – a remedy for dissipation.

If you argue that the other party has dissipating the marital assets, you may wish to seek the dissipated funds to be ‘added back’ into the pool of resources. This means that the court will pretend that the assets which have been spent are still there. This way, the Court will ensure that the innocent party receives the sum they would have received had the resources not been dissipated, by taking the necessary funds from the other party’s share to meet the shortfall.

The Court’s primary concern will always be to meet the reasonable needs of both parties, such as ensuring both can adequately rehouse and meet their day to day living expenses. Only in cases where there are resources to be distributed beyond what is necessary to meet these needs will the Court be able to use an ‘add back’ in this way.

Litigation Misconduct

This is conduct that, rather than relating to the financial resources available to the parties in the settlement, relates to the conduct of a party during the Court proceedings of a matrimonial finance matter.  Examples of litigation misconduct can be:

• causing the other party to incur excessive legal costs by bombarding their lawyers with correspondence and calls.
• failing to comply with Court Orders,
• pursuing a case which is likely to delay or obstruct a financial settlement.
• Being dishonest to the Court, particularly in failing to disclose key information during the financial disclosure process or attempting to conceal an asset.
• If the litigation misconduct  is sufficiently serious,  the Court may order the guilty party to pay some or all of the innocent party’s legal costs.

Failure to negotiate

This is a growing area, as the Court has new powers to order costs against parties for refusal to engage in methods of Non-Court Dispute Resolution (NCDR). The court system faces a huge backlog of cases, and therefore strongly encourages parties to negotiate a settlement outside of Court, limiting the use of court time and reducing the parties’ costs. The availability of methods such as mediation, collaborative law and arbitration is now widespread, and if parties continue to litigate unreasonably on relatively minor issues in the context of the family assets, then the Court can consider making a costs order against a party who is at fault.

Other conduct

Non-financial conduct is very rarely taken into account by the Court; it must be conduct of the most extreme nature for behaviour that it is not directly linked to the financial situation of the parties to be ‘inequitable for the Court to disregard’. Where the conduct itself is not financial in nature, such as physical abuse or coercive control, it is necessary to consider the financial impact of that behaviour, for example the impact on earning capacity because of health or mental health difficulties that the abuse has caused. It would be necessary to provide medical evidence of such an impact.

There have been occasions where the Court has taken non-financial conduct into account in financial proceedings, but these are in only the most serious of cases, such as where the husband had been convicted of attempted murder of the wife, and where a wife had communicated with the husband’s employer, to try to influence him. The conduct must be so poor that it would amount to huge unfairness if the Court were to disregard it.

Remedy for Conduct

Costs Orders

Where conduct is not enough to impact the final amount of the distribution of the financial resources but is still conduct that can be considered by the Court, it can be reflected in costs. This means that the party who has transgressed, in the eyes of the court, can be ordered to pay the other party’s costs.

Practicalities

In Tsvetkov v Khayrova [2023] EWFC 130 the judge made it clear that allegations as to the other party’s conduct must be brought to the court’s attention at the earliest possible opportunity. This means setting them out at section 4.4 of your Form E Financial Statement. It is important to state exactly what the allegations are, how those allegations meet the threshold discussed in this blog, and what the implications of these allegations are on the financial resources of the parties. Even if the full details of  these allegations cannot be supplied without the other party’s financial disclosure, it should be referred to within section 4.4 of the Form E.

In complex cases, particularly where there has been dissipation of the financial resources, it may be necessary to obtain the help of a forensic accountant to trace the dissipated funds.

Our team of Solicitors can help you draft this section of your Form E if you are at this stage of financial remedy proceedings, and assist you with instructing accounting experts if necessary.

If you would like to discuss financial arrangements, in particular ‘bad behaviour’ that has taken place and how this can be addressed, make an appointment with one of our experienced family law specialist solicitors here