Navigating Financial Settlements: A series of guides to section 25 of the Matrimonial Causes Act 1973 in Family Law s25(2)(g)

This is a continuation of the Family Law Partners’ ‘Section 25 factors’ blog series. You can access the earlier blogs here:

• Section 25(2)(a) – income, earning capacity, property and other financial resources
• Section 25(2)(b)to(e)
• Section 25(2)(f) – contributions

As my colleagues have already explained, there is no standard formula for calculating the appropriate financial provision on divorce in England and Wales. Rather, the approach adopted by our courts is discretionary and various factors are taken into account when the court is considering what orders should be made.

The court will consider all the circumstances of the case, giving first consideration to any children under the age of 18, and have regard to a range of specific statutory factors set out in section 25 of the Matrimonial Causes Act 1973 (‘the section 25 factors’).

My colleagues have already covered paragraphs (2) (a) to (f) of section 25, and the focus of this blog is to consider paragraph (2) (g), the factor known as conduct, which is one of the more controversial factors for clients.

This paragraph (2) (g) provides that the court shall in particular have regard to: 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.

What does conduct mean in financial remedy proceedings?

It is important to stress at the outset that conduct does not mean bad behaviour in the conventional, and often moral sense. So the fact that your spouse had an affair, or generally behaved badly during your marriage, does not mean that you can or should plead conduct when you are asking the court to consider how your assets should be divided upon divorce. In fact, many people are surprised to learn that conduct/bad behaviour is rarely applicable in financial remedy proceedings. As the Form E states, “bad behaviour or conduct by the other party will only be taken into account in very exceptional circumstances” (my emphasis). You can read more about the Form E in my colleague’s blog here: https://www.familylawpartners.co.uk/blog/what-is-financial-disclosure

Unhelpfully,  conduct is not defined in the Matrimonial Causes Act and so the court instead looks at previous case law for guidance. This makes it difficult for people, particularly when they have not instructed solicitors, to understand what the court will consider as conduct that is ‘inequitable to disregard’.

In a recent case, the court summarised that there are four scenarios where conduct “rears its head”:

1. Gross and obvious personal misconduct meted out by one party against the other.
2. The “add-back” jurisprudence (which my colleague Lisa has covered in her blog available here: https://www.familylawpartners.co.uk/blog/what-is-add-back-and-when-does-it-apply).
3. Litigation misconduct (which will be covered in another blog, coming soon).
4. Drawing inferences as to the existence of assets from a party’s conduct in failing to give full and frank disclosure (which is covered in my colleague Grace’s earlier blog – link: https://www.familylawpartners.co.uk/blog/disclosure-of-assets-in-divorce-what-do-my-partner-and-i-need-to-disclose-to-one-another).

This blog focuses on scenario 1. above.

Gross and obvious personal misconduct

As to what “gross and obvious personal misconduct” is, again there is no specific definition or set of circumstances that we can point to and so instead, we must look to previous cases that have been reported. Some examples of behaviour that the court has previously found to be ‘gross and obvious’ include circumstances where:

• the husband attempted to murder the wife in the presence of the children and was convicted to 12 years’ imprisonment; the wife’s earning capacity was impacted, and her housing and income needs increased (H v H (Financial Relief: Attempted Murder as Conduct) [2005] EWHC 2911 (Fam));
• false reports made by both the husband and the wife to the police (FZ v SZ (ancillary relief: conduct) [2010] EWHC 1630 (Fam), [2011] 1 FLR 64);
• a wife’s connivance in the husband’s suicide attempts (Kyte v Kyte [1987] 3 All ER 1041);
• the husband attacked the wife with a razor, caused her a permanent disability, the result being that she unable to work (Jones v Jones [1975] 2 All ER 12);
• the wife had bought, sold and attempted to sell substantial matrimonial assets, while deliberately concealing her actions from the husband because she knew he would not consent (DP v EP [2023] EWFC 6).

It is important to note that conduct is highly fact specific and while the above circumstances have previously been accepted as ‘conduct’, it does not necessarily mean that the court would accept them now.

It is also important to understand that conduct will only be taken into account where there is an identifiable negative financial consequence of it. By way of example, in the case referred to above where the husband had attacked his wife, he had left her unable to work, therefore financially impacting her for the rest of her life. While that is an extreme example, it really enforces the point that when the court says it will only take conduct into account in exceptional circumstances, it really does mean that.

Domestic abuse and conduct

There have been a few cases that have recently considered the interplay between domestic abuse and conduct in financial remedy proceedings. As a Judge in one of these cases stated:

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 in this case is potentially a relevant factor in financial remedies litigation, in circumstances where “conduct” is, in accordance with both statute and case law, only to be taken into account if it is of a highly exceptional nature.

Whether domestic abuse meets the threshold to plead conduct is therefore very fact specific. Despite increased awareness of the affect of domestic abuse on a survivor, and acknowledgement from the family court that such behaviour is ‘vile and indefensible’, it does not lower the conduct hurdle. As such, even if domestic abuse is a feature of your case and there are criminal proceedings or other evidence to prove your claims, it does not automatically follow that you can (or should) plead conduct.

What if I want to assert conduct?

As referred to above, section 4.4 of the Form E specifically asks parties to set out any bad behaviour or conduct by the other party that they feel should be taken into account by the court. As set out above, this section includes the warning that conduct “will only be taken into account in very exceptional circumstances”. Section 4.4 of the Form E is therefore not an invitation for parties to set out all the perceived misdemeanours of their soon to be ex-spouse – no matter how morally unacceptable that conduct is. It is rather intended to allow parties who have a genuine conduct case to set that out at the earliest opportunity.

In a 2023 case, a Judge took the opportunity to confirm that a party asserting conduct must prove:

1. the facts relied on;
2. if established, that those facts meet the conduct threshold (which the Judge reminded the court “has consistently been set at a high or exceptional level”); and
3. that there is an identifiable negative financial impact upon the parties which has been generated by the alleged wrongdoing.

That is stage one, and if the steps are established, the court will then go on to consider how the misconduct, and its financial consequences, should impact upon the outcome of the financial remedy proceedings.

The Judge then went on to set out a detailed procedure for what you need to do if you want to plead conduct. That procedure includes:

1. Setting out allegations clearly in box 4.4 of your Form E;
2. Particularising those allegations;
3. Stating how the allegations meet the threshold criteria for a conduct claim; and
4. Identifying the financial impact caused by the alleged conduct.

Parties should therefore be very wary of simply listing out their spouses alleged bad behaviour in their Form E where it does not meet the (very high) required threshold for a conduct claim or simply saying that they ‘reserve their position on conduct’. The court has made it clear that it will no longer tolerate that approach, and in fact, the Judge in the above case stated that “these practices are to be strongly deprecated and should be abandoned”.

What happens if the court does agree that my spouse has behaved badly?

If the court finds that there has been ‘gross and obvious’ conduct, it will not necessarily mean that the claims of the person who carried out that conduct will be disregarded. Rather the court still needs to consider the rest of the section 25 factors and meet both parties’ needs. It is for this reason that conduct should only be pleaded in exceptional circumstances – because it will simply raise costs and may well not have any significant impact on the overall award that the court makes.

As conduct is so fact specific, legal advice really should be taken at the start of your case to ascertain whether it is likely to be relevant, and whether it is pragmatic to plead it. This is because even where it may be relevant, in a case where it is going to be difficult to meet both parties’ needs with the resources available, increasing costs by running a conduct case may not be the most sensible option for your family to help them move on.

For more information about the issues addressed above, or to arrange a confidential discussion about your personal circumstances, please do not hesitate to contact us.

Hannah Gumbrill-Ward is an Associate Solicitor in our Brighton office.