Well, we wouldn’t pick a fight with Lady Gaga, but we imagine if crossed in divorce proceedings she would want her legal team to go after her ex with all guns blazing and she would have to hear some difficult advice…
Read on to hear what Senior Associate Christina Coker would have to tell her.
It’s a sore topic and understandably so. To the everyday person it feels unconscionable that somebody’s bad behaviour would go unpunished.
In wider societal settings, if we behave contrary to accepted etiquette and social norms, we risk facing some form of retribution; from social out casting to fines, loss of employment, and even imprisonment.
You could be forgiven for thinking that if your spouse or partner has behaved badly during the relationship (or after you have separated) they would undoubtedly be penalised for their wrongdoing in the divorce or dissolution proceedings. But it’s not that simple…
April 2022 saw a change in divorce law and we now live in an era of no-fault divorces. Prior to April 2022, you had to rely on one of five facts to demonstrate to the court that your marriage had irretrievably broken down. Those facts included adultery, unreasonable behaviour, desertion, or separation. Consequently, before proceedings had even got going the parties would enter into a slanging match of blame and shame.
There are usually two sides to a story. Most people can be persuaded to “choose their battles” and maintain perspective on the basis that there are “bigger fish to fry”, namely securing a fair distribution of the matrimonial finances. Save for any pending pre-April 2022 divorces/dissolutions, that is now as they say “history” and the opportunities for aggrieved spouses/civil partners to vent their anger and frustration regarding their ex’s behaviour are now fewer.
So, now that the door on moral mudslinging within the divorce decree/dissolution proceedings has been firmly shut, how are warring spouses/civil partners able to feel a sense of “justice being done”?
The court of morals?
Surprisingly for many, the perceived benefits of “calling out” their rogue ex, for the most part, does not translate to the financial remedy proceedings when the court determines how the matrimonial finances should be divided. This is because while a party’s conduct is a factor for the court to consider, it does not define the outcome. This was the case pre-April 2022, and it has not changed since the introduction of no-fault divorces.
Determining how matrimonial assets should be shared.
The court has a duty to consider all the circumstances of the case and specifically to consider a range of statutory factors set out in section 25 of the Matrimonial Causes Act 1973 and Schedule 5, Part 5 to the Civil Partnership Act 2004. The conduct of the parties is one of eight statutory factors that the court must consider when making provision for financial orders; with other factors including the financial resources and needs of the parties and that of any minor children, the standard of living enjoyed, the ages of the parties and length of marriage, their physical and mental health, and the contributions they made to the welfare of the family.
Common complaints
- I should be allowed to keep the house as we would have lost it if I hadn’t paid the mortgage.
- My ex has been spending money on a new partner. I want to be paid back for the money spent.
- My ex withdrew large cash sums to fund their drink/drugs/gambling habit.
- Me ex used our savings to fund a business that has failed.
- My ex is lying about assets/income in the proceedings. Will the court punish this?
- My ex has missed court ordered deadlines. Will the court punish this?
- My ex has deliberately given up work. Can the court force them to get a job?
- My ex says that they will make themselves bankrupt if I seek a financial settlement.
The Law
In our experience clients frequently want to set out extensive details of an ex’s bad behaviour for the court. The reality is that the bad behaviour or conduct will only be considered ‘in very exceptional circumstances’. Specifically, the conduct needs to be such that it is inequitable to disregard, and where its impact is financially measurable. The Law Society’s Family Law Protocol states that details of conduct by the other party should only be included when that conduct is sufficiently exceptional to be relevant. So, while it may be tempting to run a conduct argument it is rarely the case that conduct is relevant within financial remedy proceedings. Of course, every case is determined on its own specific facts, and this is why it is important to seek specialist advice early on.
But when is it bad enough?
That’s a good question, and one that will have us pulling out our moral barometers. Sadly, the conundrum remains despite the publicity of two high profile divorces this summer. In both cases the husband’s behaviour was an issue to be determined by the court. Each case resulted in a different outcome based on their individual facts. On the one hand we saw the businessman Anthony Bailey being stripped of his OBE, following his divorce from Austrian Princess Marie-Therese von Hohenberg after he was handed a 12-month prison sentence for contempt of court for breaching court orders. The judge ruled that he had “obstructed the court at almost every possible turn” and “deliberately left the country”, leaving the judge to say that there were “major question marks” about his behaviour. In stark contrast, Sir Frederick Barclay who was also found guilty of contempt of court within his divorce for failure to promptly hand over money to the high court, was told by the judge that he would not face punishment despite having breached a court order. So where lies the tipping point?
In the 2020 case of OG v AG (Financial Remedies: Conduct) it was established that conduct arises in financial remedy proceedings in four distinct scenarios, as follows:
- Conduct that is gross and obvious
- The dissipation of assets that would otherwise be available for distribution
- Litigation misconduct
- Non or incomplete disclosure of assets
In this blog, we will focus on points 1 and 2 above, which deal largely with personal conduct rather than misconduct during the course of court proceedings (points 3 and 4), which we will explore in a separate blog – the B Side!
Gross and obvious conduct. This is personal conduct by one party towards the other, normally, but not necessarily, during the marriage, which can include economic misconduct. Over the years the bar has been set extremely high. Only in very exceptional cases will bad behaviour be considered “gross and obvious” such that it will play a role in influencing the courts determination of the issues.
Here are some examples:
In the case of H v H (Financial Relief: Attempted Murder as Conduct) [2005] a husband was sentenced to 12 years in prison following his attempted murder of his wife in front of their children. In subsequent divorce proceedings the judge found that the husband’s conduct was at the ‘very top of the scale’. However, the Judge stated that the court should not be punitive or confiscatory for its own sake. Rather, the proper way to have regard to the conduct was to consider it a ‘magnifying factor’ when considering the wife’s position.
The husband, through his own fault, had placed the wife’s needs in a much higher category to his own. Consequently, the conduct should be taken into account by the court in determining the proper award to the wife. The wife had been physically injured and emotionally traumatised, such that her earning capacity was almost completely eroded with no real accurate estimate as to when – or to what extent – it would return. Therefore, the husband’s conduct had a ‘direct [financial] effect’ upon the wife, to which the court had to have regard. The wife was awarded 75% of the overall assets.
In FRB v DCA (No 2) [2020] the Husband and wife were both from extremely wealthy families and lived a lavish lifestyle. The parties had a son. The wife had been having an affair during the marriage and it was subsequently confirmed, following paternity testing, that the husband was not in fact the biological father of the child. The court concluded that while the wife had not known that she was carrying another man’s child, it was impossible to believe that the thought that the child was not the husband’s had never crossed her mind. The judge decided that the wife, in omitting to inform the husband that the child of the family may not be his biological child, amounted to conduct that would be inequitable to disregard. The judge in the case was clear that the fact and extent of the affair itself did not amount to conduct, but that the wife’s silence and the personal effect of it on the husband were “devastating” to the husband and could not be ignored. Ultimately, the wife’s conduct did not impact on the financial award she received because the judge found that the husband was also guilty of misconduct within the court proceedings.
Other examples include a wife who obtained a financial order which provided for monthly maintenance payments of £5,500 to be paid to her in circumstances where the order had been obtained through fraud and/or dishonesty on her part (Neil v Neil [2019]).
And more recently in 2022, a wife communicated with the founder of the company in which the husband had a financial interest behind the husband’s back. The wife’s collusion with the owner of the company prevented the release of units on the listing day and caused the husband financial losses in the tens of millions of dollars (VV v VV [2022]).
As illustrated by the above case examples, the Court will only consider personal misconduct to be relevant where the behaviour is exceptionally serious such that it has the “gasp” factor (DP v EP [2023]). Even in cases of extreme personal misconduct, there is no guarantee that the Court will punish the ‘guilty’ party financially.
The ‘add-back’ jurisdiction is where ‘one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property’.
In the case of M v M [1995], the husband had dissipated his capital assets by his obsessive approach to court proceedings, which had included starting unnecessary proceedings. The wife’s share of the parties’ combined assets was therefore quantified based on what would have remained had the husband not recklessly dissipated the assets. While in Norris v Norris [2002], the husband had engaged in ‘reckless’ expenditure of £350,000 over his income in two years. £250,000 was therefore added back into the calculation of the husband’s available resources, so that his reckless expenditure did not disadvantage the wife.
By contrast, in the case of MAP v MFP [2015] the wife attempted to raise arguments about the husband’s conduct after a 40-year marriage in which there were assets of approximately £25 million. She argued that the husband was spending £6,000 per week on cocaine, in addition to substantial sums on therapy and prostitutes. The wife calculated his expenditure over a two-year period to be approximately £1.5 million, arguing that this sum should be ‘added back’ to the assets available for distribution, and allocated to the husband when dividing those. The Court accepted that the parties had suffered financial losses due to the husband’s addictive character. The Judge acknowledged that whilst the husband’s spending, particularly on drugs and prostitution, was morally culpable it was not deliberate or wanton dissipation within the meaning of the authorities. It would therefore be wrong to add it back. He had not overspent to reduce the Wife’s claim. It was down to his flawed character. A spouse had to take his or her partner as he or she found them. The husband was a successful businessman, regardless of his other flaws, and the wife must take him as a whole package. She was not permitted to “cherry pick” by rejecting the addictive side of the husband’s character but embracing the elements of his character which had generated the family wealth. Therefore, the Court made no adjustment to the financial award based on the husband’s conduct.
As demonstrated by the above case of MAP v MFP [2015], it is important to note that in recent years ‘add-back’ arguments very rarely succeed. Showing clear evidence of ‘wanton dissipation’ is difficult, and, as set out below, the court will still need to consider the parties’ needs. Accordingly, in the case of ABX v SBX [2018] the judge noted that there will be very few non-“big money” cases where ‘add-back’ arguments are likely to be worthwhile.
Conclusion
Running a conduct case can be a risky business, and in most cases conduct will not be relevant. If you have concerns about your ex’s conduct and can meet the exceptionality threshold, this should be raised at the earliest opportunity.
Even where a conduct case can be successfully argued, the results may be limited. It will not necessarily result in your ex’s claims being disregarded or extinguished altogether. More likely, it would be one of the circumstances of the case that would in some way impact on the final award, provided it is proportionate to do so. It should also be noted that the court has the power to make costs orders against parties who pursue inappropriate conduct arguments which are doomed to failure. So, running a conduct argument is not a step to be taken lightly and legal advice is essential. Ultimately, it can cost you dearly both emotionally and financially, and you should always carry out a costs/risk/benefit analysis with a family law specialist as early as possible.
For an initial FREE consultation on any aspect of family law, call Manders Law on 01245 895 105 or email us here.
Note: this blog is intended to give an overview (rather than comprehensive guidance and advice) on your legal or financial position and is provided for information only. It is not an endorsement of any product or service provider.