Is Conduct Ever Relevant in Financial Proceedings? 

Divorce proceedings are highly emotional for everyone involved. Our team of expert family lawyers are often asked whether conduct is going to be reflected in the ultimate financial settlement. It is easy to understand why one party to the proceedings may wish to tell the judge about the other's bad behaviour during the marriage so that they can be compensated when it comes to dividing the finances.

Despite how much this appeals to our desires for justice upon marital breakdown, particularly when one party feels that they have been "wronged", conduct is very rarely relevant in financial proceedings. We have put together some helpful information below as guidance for when conduct or behaviour is and is not relevant in consideration of how the matrimonial assets should be distributed.

Generally speaking, the conduct that may be relevant during financial proceedings can be separated into two broad categories:

• Personal misconduct – this relates to the bad behaviour of one party during the marriage. It is more commonly invoked but very rarely has a bearing on financial settlement.
• Financial misconduct – examples of this include making false statements or wilful non-disclosure during proceedings and purposely dissipating assets prior to proceedings in an effort to reduce the amount available for distribution.

It is commonly thought that spousal conduct influences financial settlement. Indeed, conduct is listed as a factor for the court to take into consideration under the Matrimonial Causes Act (MCA) 1973. However, conduct will only be taken into consideration if the court deems that it would be inequitable to disregard it, as set out in s25(2) MCA 1973.

Practically, this means that conduct is only ever relevant in a minority of cases due to this very significant hurdle that must be overcome before conduct is relevant in financial proceedings.

This approach was summarised by Mr Justice Mostyn in the case of OG v AG [2020] EWFC 52 as follows:

"Times have changed. 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. It is unprincipled for the court to stick a finger in the air and arbitrarily to fine a party for what it regards as immoral conduct."

Despite this high threshold, there are examples from case law of when conduct has been found to be relevant in financial proceedings.

Where conduct is deemed relevant to financial proceedings, this does not mean there will be no financial provision for the party at fault. Rather, in a case in which there are sufficient assets to meet the parties' needs, this conduct may justify a departure from the yardstick of equality. Where there are insufficient assets to meet both parties' needs, the needs of the party who is not at fault may be prioritised.

This approach of the court, in particular, the high threshold on conduct being considered, may seem to conflict with our ideas of what is a morally fair outcome. However, it is important to bear in mind that the Family Court does not aim to punish individuals for their marital conduct during financial proceedings. Rather, the focus is firmly on dividing the matrimonial assets in accordance with the parties' needs in a manner that they deem to be fair. 

Ultimately, whether a spouse's conduct has been serious enough to influence financial proceedings will be a highly subjective decision and one that is case-specific. At Myerson, our team of specialist family lawyers aim to ensure that you are advised clearly about conduct so that you can try and focus on moving forwards with your life following divorce.