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Conduct in financial remedies: could reform revive the blame game?

The government is considering whether domestic abuse and other misconduct should play a greater role in financial remedy proceedings. Marcus Dearle, senior partner at Miles Preston, argues that serious misconduct must be recognised, but warns that reform risks bringing blame back into divorce through the back door.

 

The government’s A Fairer End to Relationships consultation considers reform of the law governing financial remedies on divorce. Among its questions are the principles courts should apply when dividing assets and meeting needs, and the treatment of misconduct.

One of the most difficult questions concerns conduct. The government asks whether domestic abuse should be taken into account more readily when courts distribute assets in financial remedy and cohabitation proceedings.

The answer should be no, subject to important qualifications. The law must be able to recognise domestic abuse and its consequences, but without turning financial remedy proceedings into a wider inquiry into the parties’ behaviour throughout the marriage. Domestic abuse should continue to be considered only in exceptional circumstances, with the court focusing on its demonstrable consequences and whether ignoring them would produce an inequitable result.

Replacing the “gasp factor”

The high threshold should remain, but the language used to describe it should change. The consultation refers to the so-called “gasp factor” and asks whether it should be replaced.

It should. The phrase is imprecise and risks trivialising serious misconduct, particularly domestic abuse and economic abuse.

It should be replaced with clear statutory language identifying serious misconduct which it would be inequitable to disregard. The categories already identified in case law, including in OG v AG [2020] EWFC 52, provide a basis for a clearer definition.

The tension with no-fault divorce

There is a clear tension between the policy objective of no-fault divorce, and any reform that encourages wider reliance on conduct in financial remedy proceedings.

Parties no longer need to allege unreasonable behaviour to obtain a divorce. But if allegations of bad behaviour could affect the financial outcome, they may still have an incentive to make and litigate them.

Resolution argues that the two issues can be kept distinct, drawing a line between ending a marriage without allocating blame and taking account of domestic abuse or other misconduct where it has had a material impact on the financial outcome.

That distinction may make sense legally, but it may be less clear to separating couples. If behaviour during the marriage can once again affect the financial outcome, there is a risk that parties will see this as blame returning by another route, encouraging more allegations and more contested litigation.

In Lockwood v Greenbaum (2022), Moor J welcomed no-fault divorce but warned that it would not end attritional litigation over matters such as financial remedies. He described that approach as “entirely destructive, extremely expensive and thoroughly damaging to everyone involved”.

In Crowther v Crowther and Others (2021), Peel J described proceedings in which each party believed the other was “out to destroy” them.

These cases underline the need for caution. Any reform should be framed carefully so that financial remedy proceedings do not provide a further incentive for parties to plead and litigate allegations of bad behaviour.

Where should the line be drawn?

Domestic abuse, including coercive and controlling behaviour and economic abuse, should be capable of falling within the definition of misconduct. The same applies to the deliberate dissipation or concealment of assets, litigation misconduct and conduct that materially affects a party’s needs, resources, earning capacity or welfare.

Aggressive conduct during separation may also be relevant. This could include public blame narratives or media engagement that harms children, as a form of litigation or post-separation misconduct.

But misconduct should not include ordinary marital unhappiness, adultery or general emotional grievances unless there is a serious and demonstrable consequence. Otherwise, financial remedy proceedings risk becoming an assessment of who behaved badly during the marriage.

Defining behaviour as misconduct does not mean it should automatically change the outcome. Misconduct should affect an award only where ignoring it would be inequitable. The court should focus on demonstrable impact rather than make a moral assessment of the relationship.

Where misconduct has materially affected the parties’ finances, housing, earning capacity, health or welfare, the court should be able to reflect that harm in the outcome. The court should also be able to warn parties where their behaviour risks causing emotional harm to children and damaging future relationships.

Financial and non-financial consequences

Where misconduct has direct financial consequences, the court can identify and remedy the loss or disadvantage. The position is less straightforward where there is no direct financial consequence.

Such misconduct may still affect a person’s health, housing needs, vulnerability or ability to earn. Those effects may justify a different financial outcome, but the court must approach them carefully. Otherwise, reform could revive blame-based litigation and turn financial remedy proceedings into a general conduct inquiry.

Fairness, not punishment

The law must be able to recognise serious misconduct and correct its proven consequences. But a wider role for conduct carries a clear risk.

The purpose must be fairness, not punishment, responding to the consequences of serious behaviour without judging which party was the worse spouse.The distinction between no-fault divorce and conduct in financial proceedings must also be clear not only to lawyers, but to separating couples themselves.

No-fault divorce removed the need to allege unreasonable behaviour when ending a marriage, but it has not ended the blame game. The Government must ensure that reform of financial remedies does not bring it back through the back door.

 


 About the author

Marcus Dearle is senior partner at Miles Preston and has more than 35 years’ experience acting in complex domestic and international family law cases. He specialises in high-value divorce and trust cases and international family law, and is a Past Chair of the International Bar Association’s Family Law Committee and a Fellow of the International Academy of Family Lawyers.

 


 

The views expressed in this article are those of the author and not necessarily those of Today’s Family Lawyer.

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