Does Bad Behaviour Affect a Divorce Financial Settlement in the UK?

Key Takeaways

• Behaviour during a marriage will usually not affect a divorce financial settlement.
• Courts will only consider conduct where it would be “inequitable to disregard it.”
• This is a high legal threshold, meaning only serious misconduct is relevant.
• Conduct may be considered in cases involving serious abuse, coercive control, or financial misconduct.
• Where assets have been deliberately dissipated, the court may apply an “add-back” approach to prevent unfair advantage.

Divorce law in England and Wales changed significantly with the introduction of the Divorce, Dissolution and Separation Act 2020, which introduced no-fault divorce in April 2022.

Under the current system, couples no longer need to prove wrongdoing in order to legally end a marriage.

However, although blame is no longer relevant to the divorce itself, conduct may still be relevant when the court determines financial remedy proceedings following divorce.

In limited circumstances, serious behaviour during the marriage may influence how matrimonial assets are divided.

The Legal Framework for Divorce Financial Settlements

Financial remedy proceedings in England and Wales are governed primarily by the Matrimonial Causes Act 1973.

Section 25 of the Act sets out the factors that courts must consider when deciding how matrimonial assets should be divided.

These include:

• the income, earning capacity and financial resources of each party
• financial needs, obligations and responsibilities
• the standard of living enjoyed during the marriage
• the age of the parties and duration of the marriage
• contributions made by each party to the welfare of the family
• the welfare of any children of the family
• the value of any benefit (for example pension benefits) which a party will lose the chance of acquiring because of the divorce

The court may also consider:

“the conduct of each of the parties if that conduct is such that it would be inequitable to disregard it.”

This statutory test sets a high threshold, meaning conduct will only affect the financial outcome in exceptional cases.

The High Threshold for Conduct

Family courts generally avoid examining the behaviour of spouses unless the conduct is particularly serious.

The principle that conduct should only rarely affect financial settlements was emphasised in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, where the House of Lords confirmed that financial remedy proceedings should focus primarily on fairness and financial needs.

However, the courts have also recognised that certain forms of conduct may be so serious that ignoring them would lead to injustice. This approach can be seen in cases such as H v H (Financial Relief: Attempted Murder) [2005] EWHC 2911 (Fam), where extreme misconduct was taken into account in the financial outcome.

Examples of conduct that may potentially be relevant include:

• serious domestic abuse
• coercive or controlling behaviour
• deliberate concealment of assets
• reckless or deliberate dissipation of matrimonial assets

Financial Misconduct and Dissipation of Assets

Conduct may also become relevant where one party has deliberately reduced the matrimonial asset pool.

In some cases the court may apply what is known as “add-back.”

However, the courts have made clear that add-back is not applied lightly.

It will usually only arise where there has been wanton or reckless dissipation of assets, meaning deliberate or irresponsible spending that unfairly reduces the assets available for division.

Examples may include:

• intentionally transferring funds to avoid disclosure
• reckless or excessive spending during divorce proceedings
• deliberately disposing of matrimonial property

Where such behaviour is proven, the court may treat the dissipated funds as if they still form part of the matrimonial asset pool.

The aim is to prevent a party from benefiting financially from misconduct.

Domestic Abuse and Financial Remedy Proceedings

In recent years there has been greater recognition within family law of the impact of domestic abuse and coercive control.

Domestic abuse can include:

• physical violence
• emotional or psychological abuse
• coercive or controlling behaviour
• financial or economic abuse

While the threshold remains high, courts may consider such behaviour where ignoring it would lead to an unfair financial outcome.

At the same time, the courts remain cautious about allowing financial remedy proceedings to become extensive investigations into marital behaviour.

Judicial Discretion in Financial Remedy Cases

Financial remedy decisions involve a significant degree of judicial discretion.

Judges must balance the statutory factors under the Matrimonial Causes Act 1973 with the individual circumstances of each case.

In practice, the most influential considerations are usually:

• housing needs
• financial resources
• income and earning capacity
• contributions during the marriage
• the welfare of any children

Conduct will generally influence the outcome only in exceptional cases.

Frequently Asked Questions

1. Can bad behaviour affect a divorce settlement in the UK?

Yes, but only in limited circumstances. Conduct may be considered where it would be inequitable to disregard it under the Matrimonial Causes Act 1973.

2. Does adultery affect financial settlements?

In most cases, adultery does not affect the financial settlement. Courts focus primarily on financial needs and fairness rather than personal behaviour.

3. What is financial misconduct in divorce?

Financial misconduct may include:

• hiding assets
• transferring funds to avoid disclosure
• dissipating matrimonial assets
• failing to provide full financial disclosure

Where proven, the court may adjust the financial settlement accordingly.

4. Can domestic abuse affect divorce finances?

Domestic abuse may be relevant where the behaviour is particularly serious or has had a significant financial impact.

5. What is the most important factor in divorce financial settlements?

The most important consideration is usually financial need, particularly housing needs and the welfare of any children.

6. Can hiding money affect a divorce settlement?

Yes. Concealing assets during divorce proceedings is taken seriously by the court and may result in adjustments to the financial award or adverse inferences being drawn.

Practical Steps During Divorce

Individuals involved in divorce proceedings should consider:

• Maintaining full financial disclosure
  Both parties are legally required to provide accurate and complete financial information.
• Preserving financial documentation
  Bank statements, property records and financial accounts may be required in court proceedings.
• Avoiding asset transfers
  Selling or transferring assets during divorce proceedings may be scrutinised by the court.
• Obtaining legal advice early
  Early legal advice can help ensure financial interests are protected.

Conclusion

Although no-fault divorce means blame is no longer required to end a marriage, conduct may still be relevant in financial remedy proceedings in limited circumstances.

However, the threshold remains high and the courts continue to focus primarily on achieving fair financial outcomes based on financial needs, resources and the welfare of children.

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Disclaimer: This article is provided for general information purposes only and does not constitute legal advice.