Legislation
Section 25 of the Matrimonial Causes Act 1973 (‘MCA 1973’) sets out the matters which the court is to consider in resolving financial matters arising from divorce. Regarding conduct, section 25(2)(g), MCA1973 states that the court is to have regard to ‘the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it’ (emphasis added).
Case law
The Family Courts in financial remedy proceedings are not courts of morals and, by and large, conduct will only be taken into account in very exceptional circumstances. The questions, then, are:
- When does a party’s alleged poor conduct reach that high bar of being exceptional, such that it would inequitable (i.e. unfair / unjust) for the court to disregard it in resolving the matrimonial finances?
- Does any proven poor conduct have adverse financial implications for a party?
The below two recent cases illustrate instances of exceptional poor conduct, which also met the second requirement of causing adverse financial implications for the other party.
MRU v ECR [2025] EWFC 218 (B)
In this case, the Wife (‘W’) had been incarcerated for an immediate term of 4 years after pleading guilty to very serious, long-term domestic abuse against the Husband (‘H’).
The allegations, already admitted by W, were clearly sufficiently serious / exceptional to warrant consideration.
They were also quantifiable. The parties had three children, aged 9, 7 and 5. The youngest child was registered as severely sight impaired and had issues with her speech and language. W’s conduct therefore affected the financial settlement awarded by the Court because the children lived with H following W’s poor conduct and incarceration and had only indirect, supervised contact with W.
The Judge was satisfied that, at the time of the hearing, W would not realistically be contributing to the care of the children. Moreover, as section 25(1), MCA 1973 states that the welfare of the children must be the court’s first consideration and the children lived with H, his needs and ability to provide a home for the children outweighed those of W.
Therefore, the Judge awarded H 100% of the remaining funds left over from the sale of the family home to enable him to purchase a home for himself and the children.
The Judge also made a costs order against W of £7,200 inclusive of VAT as H had made an offer to W to resolve the matrimonial finances prior to the final hearing on the terms ultimately ordered by the Court. The Court was satisfied that W had unreasonably not accepted that offer.
OG v AG [2020] EWFC 52
In this case, the Judge held that economic misconduct, for example where one party economically oppresses the other selfishly or maliciously, may also be taken into account provided it meets the high standard of being inequitable for the court to disregard it.
The parties had raised multiple cross-allegations of poor conduct against the other, including litigation misconduct. Poor litigation conduct by Husband (‘H’), including but not limited to sustained non-disclosure, resulted in the parties incurring excessively high legal costs. Moreover, H had no good reason for his poor conduct.
The Court was satisfied that H’s conduct, including not only litigation misconduct but also setting up a competitor business, was sufficient to justify a departure from equality in the financial settlement. H therefore received 44.7% of the total assets. The Judge noted at paragraph 95 that the amount lost in departing from equality was ‘a very substantial sum of money and I hope it will serve as a lesson to any future litigant who is tempted to behave in the same way’.
H’s conduct also disapplied the normal rule under FPR 28.3(5) that each party pays their own legal costs in Family Law proceedings. Consequently, the Court imposed a costs order against H, albeit that costs order was reduced by W’s conduct in engaging in lesser non-disclosure herself and failing to reasonably negotiate.
The Judge stated:
- ‘The message should go out that if you are guilty of deliberate non-disclosure, even if it is relatively minor, you will pay a penalty in costs’ (para 89); and
- ‘if, once the financial landscape is clear, you do not openly negotiate reasonably, then you will likely suffer a penalty in costs. This applies whether the case is big or small, or whether it is being decided by reference to needs or sharing’. (Para 31)
What are the consequences of poor misconduct, if proven?
The case of OG v AG [2020] EWFC 52 provides useful guidance confirming that the type of poor conduct proven influences the likely consequences. So:
- ‘gross and obvious personal misconduct meted out by one party against the other, normally, but not necessarily, during the marriage’ may affect the court’s substantive award and justify a departure from the starting point of marital assets being shared equally (i.e. 50/50) between the parties.
- Where a party has clearly and obviously dissipated matrimonial assets, the court may notionally “add back” the amount of those dissipated assets into the matrimonial pot for the purposes of determining a fair and reasonable resolution of the matrimonial finances.
- Litigation misconduct, for example a failure to openly and reasonably negotiate, may result in a severe costs penalty (rather than affecting the substantive award).
- The court may also draw inferences as to the existence of assets based on a party’s failure to provide full and frank disclosure. Whilst this may not affect the distribution of the matrimonial assets between the parties, it could affect how the divisible matrimonial assets are calculated.
How We Can Help
At Harding Evans, our solicitors are specially equipped to advise you where issues of potential poor conduct arise.
If you need advice in this area, please contact us to arrange an appointment.
