It is naturally difficult for clients to share what are often the most intimate, and frankly upsetting, details about what has led to the breakdown of their marriage/relationship. Sadly, many relationships break down because of one party’s poor behaviour. This may include domestic abuse, an affair or poor financial conduct, such as gambling.

Poor conduct can leave one party feeling extremely hurt and wanting compensation. We are commonly asked by our clients whether conduct is a relevant factor in deciding how assets should be divided, but unfortunately, it is not the case of a simple yes or no. It may also be that the legal position does not always align with a person’s sense of morality.

The Matrimonial Causes Act 1973 invites the Court to consider “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”. This means in essence that in some cases, the court can consider one spouse’s conduct if ignoring it would feel unfair. But is perhaps best said by Mr Justice Peel in a 2024 case of N v J “that domestic abuse is unlikely to have a material impact on the vast majority of financial remedy cases, such that it would need to be litigated.” In other words, unless there’s a very unusual or extreme situation, the court probably won’t need to look into claims of domestic abuse to decide who gets what financially.

For conduct to be relevant in asset division it must be ‘both obvious and gross’ which is long-established authority. It was further noted by Mr Justice Peel in N v J that “the recent focus on domestic abuse in the family justice system did not change the high bar to conduct claims established by case law.”

In Tsvetkov v Khayrova Mr Justice Peel gives clear guidance on how conduct should be brought into court proceedings if relevant. “There should be an identifiable financial impact even if it is not always easily measurable and there must be a causal link between the conduct and the financial consequence.”

It is inappropriate to level accusations that are subsequently not followed up.

Further comments by Mr Justice Peel J in N v J are that “it is not the job of the court to impose a fine, a penalty, or damages upon a party for conduct. Nor is it for the court to moralise or apportion blame for how the parties behaved towards each other during their relationship.”

That is not to say that conduct is always irrelevant.

There are four types of conduct which can be relevant:

1. Gross and obvious personal misconduct which has a financial consequence.
2. Wanton and reckless dissipation of assets.
3. Litigation misconduct.
4. Non-disclosure of assets.

Each case is unique in its facts, so it’s important to carefully consider whether a person’s behaviour is relevant from the beginning and keep assessing it as the case goes on. Generally, bad behaviour won’t affect financial decisions unless it’s very serious, has a financial impact, or is reckless and directly causes financial harm. For example, an affair usually doesn’t matter for financial settlements, as it rarely directly leads to financial consequences.

Domestic abuse depends on the details of each case. Generally, it is not relevant if it has no financial impact and is not clear or severe. One example of where domestic abuse could be relevant, were if one party were badly injured by their spouse, and if the injuries sustained then impacted on their ability to work and earn in the future.

Gambling is likely to be the most relevant out of the three examples as it is more likely that you will be able to establish careless and reckless spending. There will also be a financial consequence because of the act, being the loss of money. This usually leads to the responsible party receiving a lesser share of the actual available assets upon settlement.

Expert advice should always be taken before deciding whether to argue conduct in a financial remedy case. The stakes can be high, and if you get it wrong, not only will it create conflict and animosity between the parties, but also, the courts can make costs orders against the party who has misguidedly pursued a case for conduct.

If you have any queries in relation to this article or wish to discuss a potential matter where similar issues feature, please do not hesitate to contact Samuel Mason who is an Associate in our Family team based in Nottingham.