In brief
- Section 25(2)(g) Matrimonial Causes Act 1973 ("MCA") states that the conduct will be factored into the division of assets when it would be "inequitable to disregard it" – traditionally, in practical terms, this is a very high bar.
- Conduct in the context of financial remedy proceedings is a nuanced area. For example, typically it must have an identifiable negative financial impact, yet in some circumstances spouses must also take each other "as they find them".
- Resolution's 2024 report concludes that the courts' current approach to conduct "leads to unfair outcomes for some victim-survivors of domestic abuse", and some recent cases hint at a possible sea-change on the horizon.
What does conduct mean?
In the context of financial remedy proceedings, 'conduct' refers to the behaviour of each party during the marriage, and/or after separation during the resolution of the parties' finances.
Section 25(2) MCA sets out the various factors that the court will consider when making a financial order. Section 25(2)(g) is "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".
Types of conduct
It is well-established that a party's behaviour in general terms is not relevant to the financial settlement on divorce. Instead, currently there are four scenarios in which the court may take conduct into account:
- Personal misconduct – this is "gross and obvious" bad behaviour by one party against the other. Traditionally, such conduct must have a direct, quantifiable financial impact.
- "Addback" – this is where one party has deliberately dissipated assets, in order to reduce the assets available for division.
- Litigation misconduct – this is about a party's litigation approach (e.g. a dishonest presentation of assets or refusing to negotiate sensibly) and is typically dealt with by way of a costs order.
- Failing to provide full and frank financial disclosure – this is where a party fails to comply with their disclosure duties, the court can make adverse inferences (i.e. assumptions) about the wealth available to them.
A very high threshold
Section 25(2)(g) asserts that conduct will only be taken into account if it would be "inequitable to disregard it". For non-financial conduct this is an exceptionally high bar, because the court's primary aim is to achieve a fair financial outcome for both parties based on their resources and needs, and it is not its role to carry out a moral audit of the marriage (which the introduction of no-fault divorce echoes).
The high threshold for conduct is also exemplified by section 4.4 of the Form E (the standard disclosure form to be completed in financial remedy proceedings) stating that "bad behaviour or conduct will only be taken into account in very exceptional circumstances when deciding how assets should be shared after divorce/dissolution".
How and when is conduct argued?
If a party wants to run a conduct argument, there is a clear two-stage test, as laid down in Tsvetkov v Khayrova [2023] EWFC 130:
- Stage One – A party asserting conduct must prove:
- The facts relied upon;
- That those facts meet the conduct threshold; and
- That there is an identifiable (even if not always easily measurable) negative financial impact upon the parties which has been caused by the alleged wrongdoing.
- Stage Two – If the above is established, then the court will go on to consider how the misconduct, and its financial consequences, should impact upon the outcome of the financial remedies proceedings.
Conduct must be pleaded at the very earliest opportunity. The court will proactively case-manage conduct allegations, often determining that the conduct referred to is not of such a level or nature that it can be relied on, or, where conduct is being considered, ordering parties to prepare statements dealing with Stage One.
The usual approach
Below are two reported decisions demonstrating the high bar for conduct:
- N v J [2024] EWFC 184
The case concerned a same-sex couple, 'N and 'J'. N had a long history of mental health issues, albeit his mental health deteriorated during the course of their relationship, with N arguing that it significantly worsened as a result of J's behaviour – in particular, J's denial of his infidelity. During the proceedings, J admitted that he had indeed been paying for sexual encounters over the past 10 years.
N's position was that, as a result of J's actions, N had required rehab, medication and invasive electrotherapy treatments as he was perceived to be delusional and paranoid. N claimed he had "embraced madness" as a result of J's lies. He sought for J's conduct to be taken into account.
However, finding that N already had a complex history of mental health and that ultimately J's conduct had not directly impacted the financial resources available, the judge dismissed J's conduct argument (and noted that any further medical treatment J needed could be dealt with via his needs claim).
The judgment reiterated what a high threshold personal conduct is, stating that it is not the family court's role to penalise one party for their behaviour, or moralise an individual's actions or decisions during the marriage. The judge also highlighted it is the court's role to be forward-looking (to facilitate parties' journeys towards financial independence), and that routine inquiries into behaviour during the marriage would have a direct negative impact on the court's resources (and the parties' legal costs).
- MAP v MFP [2015] EWHC 627 (Fam)
The wife argued that £1.5 million should be "added back" in respect of the funds the husband had spent on cocaine and prostitutes (as well as credit cards and rehab) over a two-year period, asserting it was "reckless and wanton expenditure".
The judge was not, however, willing to add back the husband's expenditure. He noted that the character traits that had caused the husband to spend in the manner he did were part of the same personality that had allowed him to create great wealth. Just as the wife would be able to share in the great wealth he had created, she had to accept the downsides of his character. The case has become known for its proclamation that a "spouse must take his or her partner as he or she finds him".
Resolution's 2024 report on Domestic Abuse in Financial Remedy Proceedings
Amongst other stark findings, the report revealed that (i) almost two thirds of professionals considered financial abuse to be an issue in over 20 per cent of their cases, and (ii) that almost 80 per cent of professionals felt that the long-term impact of domestic abuse (generally, i.e. not just economic abuse) was not sufficiently taken into account in financial proceedings.
The report also highlighted the marked disparity between how frequently domestic abuse appeared in divorce cases (in particular economic abuse), compared with how often it was raised within proceedings – the explanation from the report was that this is down to the very high threshold for conduct to be deemed relevant to the division of assets.
Unsurprisingly, the report states that "the current approach of the courts to conduct leads to unfair outcomes for some victim-survivors of domestic abuse". The report mentions the possibility of a new section 25(2) factor being introduced which specifically refers to domestic abuse, however it does not make any firm recommendations in this respect.
The report also provides significant insight into the way in which proceedings themselves can be used as a form of ongoing economic abuse – for example poor financial disclosure, using non-court dispute resolution to deliberately drag out matters, and non-compliance with court orders. Resolution makes some recommendations in this regard, such as that the process of securing an order from the court that your ex-partner pays your legal fees should be made easier, and building "enforcement" into court orders in the first instance, so there is already a clear mechanism in place to deal with non-compliance.
A change in the tide?
Two recent decisions of Cusworth J raise the question of whether we can expect to see a shift away from the traditional, formulaic approach to conduct arguments:
- LP v MP [2025] EWFC 473
In the previous children proceedings, the wife was found to have subjected the husband to coercive and controlling behaviour and physical as well as economic abuse, and also to have made false sexual abuse allegations against the husband. In the financial proceedings, Cusworth J asserted that where a spouse had been found to have engaged in coercive and controlling behaviour, even if that did not result in a measurable financial impact, it does not follow that such impact will not exist. The judge's position was that the phrase "inequitable to disregard" essentially means "unfair to ignore". He acknowledged that there was risk to victim-survivors if the lack of quantifiable financial impacts entirely prevented a perpetrator's actions possibly being taken into account.
Ultimately, the wife's sharing claim was reduced by 40% as a result of her behaviour (and the judge also refused to "top-up" on the basis of her needs, on the basis her conduct meant her needs should not be assessed generously).
- Loh v Loh-Gronager [2025] EWFC 483
Here, Cusworth J reiterated his view that inequitable means no more than unfair – i.e. conduct should be taken into account if it would be unfair/unjust not to. He drew comparisons to the general fairness considerations when determining whether the terms of a pre-nuptial agreement ('PNA') should be held (per Radmacher v Granatino [2010] UKSC 42).
The case centred on the husband's extremely poor behaviour during the marriage and proceedings, including taking significant sums from the wife's sole accounts (c. £4.5 million), repeatedly harassing the wife and creating false evidence. Ultimately, the husband's award, which would otherwise have been stipulated by the PNA entered into, was reduced by c. 65%.
Perhaps unsurprising in the context of widespread recognition of the prevalence (and long-term impact of domestic abuse), these cases indicate that a more fact-specific, discretionary approach to conduct may be more suitable and, above all, 'fairer'. They are just two judgments (and delivered by the same judge), but could they indicate that a change in the judiciary's attitude towards conduct is on the cards? Only time will tell.