As I wrote in late March, the Law Commission has been tasked with undertaking a wholesale review of financial remedies upon divorce.
At this stage, few further details are available, save that the project articulates 6 areas for potential reform. This further article looks more specifically at one of the more surprising areas that made the list, namely:
“What consideration the courts should give to the behaviour of separating parties when making financial remedy orders.”
That I say this is surprising may, in itself, surprise many. After all we are taught from a young age that there ought to be consequences to poor behaviour. And whilst many marriages simply experience a gentle, but inexorable, degeneration of the relationship, there are plenty of cases where the fine line between love and war is thrown into stark relief – humans in all their fallible glory, fuelled by heartbreak, self-interest and emotion, often behave very badly. To what extent should such poor behaviour impact on the financial arrangements upon any consequent divorce, if any? At least twenty-three years of financial remedy jurisprudence has placed the principle of “fairness” front and centre as the key driver in the outcome of financial arrangements upon divorce and an innate sense of fairness might reasonably invoke principles of retribution, restitution and ‘justice’ for wrongdoing.
However, for many years the specialist judges of the Family Division have warned of the dangers of a “rummage through the attic of the marriage” (Coleridge J in G v G  EWHC Fam 1339), recognising that all too often it is a case of “six of one and half a dozen of the other” and also recognising the many policy (and other) arguments in favour of parties forging a clearer path without painful and unnecessary recriminations. Indeed, what a triumph the ‘new’ “no fault” divorce process has been in exemplifying that approach. No longer do the unhappy couple have to rely upon adultery or other bad behaviour to obtain a divorce, with painful echoes of what put them asunder, indeed they are unable to do so.
It was, therefore, rather surprising to see this “behaviour” principle singled out as one of only 6 issues identified for specific consideration. The only marginal flesh added to the bones of the principle can be found in the Law Commission’s Terms of Reference for the project which simply says it will look at the scope for reform in: “The operation of ‘conduct’ as a factor to which the court must have particular regard when deciding to make financial remedies orders.”
Under the current statute, the court is required to consider the parties’ conduct as one factor in the exercise of its discretion, but only if it would “in the opinion of the court be inequitable to disregard it”, so the hurdle is high. Case law over the last half-century has made clear, largely as a result of judicial policy, that the operation of the principle is limited. Mostyn J summarised the current position on conduct well in OG v AG  EWFC 22, observing that there are 4 types of conduct that might in practice impact on the financial award:
- Gross and obvious personal misconduct, such that it requires a financial consequence to be reflected in the outcome;
- Wanton and reckless dissipation of the assets, such that it requires a notional “add-back” of those dissipated assets;
- Litigation misconduct, such that a costs order is required; and
- Non-disclosure, such that the court shall be entitled to draw inferences about the true extent of the assets.
It will be noted that the language used is strong: “gross and obvious”; “wanton and reckless”. Conduct cases are rare, and rightly so given the public policy arguments against parties being given a licence to undertake something akin to a sordid forensic marital postmortem, usually to nobody’s benefit but to the expense of both in terms of costs and emotions.
But there are cases where the ‘gasp factor’ (as contrasted with the “gulp factor” – the test coined in S v S (non-matrimonial property: conduct  1 FLR 1496)) is such that it is right for there to be scope to take bad conduct into account and Mostyn’s J’s list above neatly analyses those types of cases where it might be appropriate. Looking at just the first two of these categories:
- Personal misconduct – Few would consider it ‘fair’ for the husband and wife to be treated in equal financial terms in H v H (Financial Relief: Attempted Murder as Conduct)  EWHC 2911 where the former had been convicted of trying to kill the latter. But how severe should the crime be to warrant such treatment? And to what extent (in a lesser case) might provocation be argued in mitigation? What about the wife who led her husband to believe, wrongly, that he was the biological father of her child, thereby leading him to commit emotionally and financially to the child? (FRB v DCA [2020 EWHC 754 (Fam));
- Add-back – To spend at an average rate of just under quarter of a million pounds a month following the breakdown of the marriage, as Heather Mills-McCartney was found to have done in McCartney v Mills McCartney  EWHC 401 (Fam), might also ‘fairly’ be considered to be ‘conduct that is inequitable to disregard”. Indeed Bennett J considered it so and notionally added back £500,000. But how large and how significant must the spend have been to warrant such treatment? And what of the gambling addict who dissipates matrimonial funds? How culpable is he/she? And if so in what circumstances? How should the consequences of mental illness be accounted for, if at all?
Other more general considerations also arise: If “behaviour” is found to be relevant, how should it impact in financial terms upon a needs-based award? In the first of the above two categories, the financial adjustment justified as a result of the conduct is clearly punitive (and perhaps also compensatory) in nature. Ought there also to be a punitive and/or compensatory element in the second category?
There is another fundamental difficulty in prospect here. In its terms of reference, the Law Commission articulates the admirable policy aspirations of, amongst other things: providing certainty of outcome; minimising conflict; and being straightforward and easy for parties to understand. But if bad behaviour is to be taken into account, an inherent conflict arises of how to balance the admirable, but often conflicting, aims of flexibility and certainty, particularly in the messy and infinitely complex arena of human relationships.
That the impact of “behaviour” is so explicit in the Law Commission’s factors for consideration is interesting and the recommendations it makes in this respect will be equally so. One hopes and anticipates that the conclusion will be similar to the current law and practice: to have regard to “behaviour” or “conduct” only when it is very serious and otherwise to keep the marital attic firmly sealed and immune from rummaging. But when a case involves the “gasp factor” because the behaviour was so bad that it would be inequitable to disregard it, the court must be able to reflect that in financial terms. Which I suppose returns us to the original question in my article in March – does the 1973 Act (as subsequently interpreted judicially) in fact remain fit for purpose after all?