Conduct and Domestic Abuse in Financial Remedy Proceedings: When Does It Matter?

If Gisèle Pelicot sought a divorce from her convicted rapist husband Dominique Pelicot in the family courts of England and Wales rather than the French court, would the husband’s actions amount to “conduct” under section 25 Matrimonial Causes Act 1973 (“s.25 MCA 1973”) and would the court take this into account on the division of marital finances? - possibly not.

When divorcing couples consider financial claims in England and Wales, a common assumption is that serious wrongdoing during the marriage, whether financial misconduct, domestic abuse, or other egregious behaviour, will influence how assets are divided. In practice, the law takes a far more restrictive approach.

This article explains how “conduct” is treated in financial remedy proceedings, with particular focus on financial misconduct, domestic abuse, and the high threshold parties must meet before conduct will affect the outcome.

The Legal Framework

Under section s.25 MCA 1973, the court must consider all the circumstances of the case, including at section 25(2)(g):

“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.”

Despite the apparently broad wording, the courts have consistently applied this provision narrowly as financial remedy proceedings are not intended to punish wrongdoing or revisit marital fault. Conduct will only be relevant in exceptional cases but should this be limited to those instances where there is a causal link between the conduct in question and an identifiable financial impact? If so, is this approach necessarily fair?

Financial Misconduct

The classic example of relevant conduct is the dissipation of marital assets. In Martin v Martin [1976], Lord Justice Cairns stated “a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to had he behaved reasonably.”

Where one party has deliberately or recklessly reduced the matrimonial pot, the court may intervene to prevent unfairness. Where assets have been dissipated, the court may notionally “add back” or reattribute those sums to the matrimonial pot so that the innocent spouse is not disadvantaged. However, the threshold is high. There must be clear evidence that the spending was wanton or reckless, not merely unwise or extravagant. In Vaughan v Vaughan [2007], marital funds squandered through gambling were added back.

Conduct cases are rarely clear-cut. Judges retain a wide discretion and outcomes can be unpredictable. This was illustrated in MAP v MFP [2015], where the husband spent approximately £250,000 on prostitutes and cocaine. Mr Justice Moor declined to add back these sums, holding that the expenditure reflected the husband’s flawed character rather than deliberate dissipation and the court could not “possibly add back money spent on drug therapy” where he was attempting rehabilitation. The judge also held items that were merely extravagant should not be added back. As the judge observed “a spouse must take his or her partner as he or she finds them… many successful people are flawed.” The husband’s behaviour in this case was not found to be “deliberate or wanton”.

Importantly, Mr Justice Moor clarified that where an add-back is appropriate, the court is effectively finding that the assets should have been greater than they are, thereby justifying a higher award to the party who had not wasted those assets to achieve the equality that he or she should have had.

Clarifying the Law: Tsvetkov v Khayrova [2023]

In Tsvetkov v Khayrova, Mr Justice Peel identified four categories that conduct must meet to be considered relevant, namely:

1. Gross and obvious personal misconduct by one party against the other. Such conduct will only be considered in very rare circumstances and where there is a financial consequence to its impact.
2. The “add-back” argument arises where one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property.
3. Litigation misconduct, if proven, will be dealt with by way of costs rather than affecting substantive disposition.
4. Where a party fails to provide full and frank financial disclosure, the court can draw inferences as to the existence of such assets. The conduct is accounted for by the court applying a figure for the scale of the undisclosed assets.

Domestic Abuse and Conduct

In the landmark case of Re H-N and others (children)[2021] centring on the issues of domestic abuse and coercive controlling behaviour, the court set out guidance on how to deal with allegations of domestic abuse.  Many practitioners hoped this would result in the family court taking a broader approach on the issue of conduct and take account of domestic abuse and coercive controlling behaviour within financial remedy cases. However, this has not been the case.

In N v J [2024] EWFC 184, Mr Justice Peel confirmed that the high bar for conduct claims remains undisturbed:

“In this judgement, I address the difficult and sensitive topic of the interplay between domestic abuse and conduct in the context of financial remedy proceedings. The question is not whether domestic abuse per se is vile and indefensible, for it indubitably is. The question is whether the domestic abuse alleged is potentially a relevant factor in financial remedies litigation, in circumstances where ‘conduct’ is only to be taken into account if it is of a highly exceptional nature.”

Therefore, even where domestic abuse is established, Peel J maintains there should be an identifiable financial impact even if it not always measurable and there must also be a causative link between the conduct and the financial consequence.

To most this approach appears to be manifestly unfair. How is it possible for the perpetrator to be on an equal footing as the victim within financial remedy proceedings? Peel J addresses this point at paragraph 38 of his judgement:

• 25 MCA 1973 criteria are taken into account when distributing marital assets and it would be highly unusual to include a factor which has no financial consequence under the terms of an Act which is directed to reordering the finances of the parties.
• In a majority of cases, the impact on the victim can and will be taken into account by the conventional s25 criteria which would take account of other factors such as any diminished earning capacity or behaviour which has led to additional needs such as increased medical costs. Regardless of the cause of the diminished capacity or additional need, what matters is reflecting these issues in the overall award.
• The court has a duty to consider all s.25 MCA 1973 criteria and the court can arrive at a fair and balanced decision by reference to these factors such as needs, resources, contributions, health, age, duration of relationship without any reference to conduct. It is unlikely that personal misconduct will have a material impact on the ultimate evaluation.
• It is not for the financial remedies court to impose a fine, penalty or damages upon a party for conduct. Nor is it for this court to moralise or apportion blame for how the parties behaved towards one another during their relationship.
• Personal vindication is not the function of the financial remedies court. Misconduct must be directly relevant to the distribution of finances to be entertained.
• The court must look forward, not back; to set the parties as far as possible on the road to financial independence. Embarking on a detailed enquiry into conduct is a retrograde step, even more so now that we have no-fault divorce.
• If domestic abuse was routinely litigated as a conduct factor, this would result in a significant increase in costs, cases less likely to settle before final hearing and cases prolonged due to evidence gathering and cross allegations. The implications for the system of financial remedies are profound

Non-financial conduct can, in theory, be relevant but only in the most extreme cases. In H v H [2005], the husband attempted to murder his wife in front of their children and was sentenced to 12 years’ imprisonment. This was considered a “magnifying factor” justifying prioritisation of the wife’s needs and amounted to conduct that would be inequitable for the court to disregard. Such cases remain extremely rare.

Perhaps what happened to Gisèle Pelicot would fall into a similar category and her husband’s decade of abuse would constitute a “magnifying factor”. However, due to the wide range of judicial discretion and the clear guidance set out above, we cannot be certain.

Conclusion

Conduct remains a narrowly confined and highly exceptional factor in financial remedy proceedings. While financial misconduct such as wanton dissipation may justify intervention, non-financial conduct (including domestic abuse), will only rarely affect the division of marital assets. Financial consequences are a necessary ingredient of a conduct claim, and the alleged conduct must be material to the outcome.

Given the complexity, cost, and risk associated with conduct claims, early specialist advice is essential to assess whether such arguments are likely to succeed and whether alternative remedies should be explored.