It is a commonly held misconception that someone’s general behaviour will affect the financial outcome of a divorce, with many assuming a spouse’s infidelity, neglect, or other bad behaviour will end in wronged party securing a more favourable settlement.
However, most types of bad behaviour or conduct during a marriage, separation, or divorce will not usually warrant the court deeming it to be sufficiently relevant when considering the parties finances. The law states that the court must consider an individual’s conduct only if “that conduct is such that it would, in the opinion of the court, be inequitable to disregard it.” Essentially, this means that the behaviour being complained about must be linked in some way to the financial fortunes of the parties. So what behaviours might affect a divorce settlement?
What types of behaviour does a court consider relevant to financial proceedings?
The court looks towards a threshold as to the kind of behaviour that may arise in financial settlement proceedings:
- The gross and obvious misconduct of one party against the other during the marriage, including mismanagement of finances which has affected the family’s assets
- One party has wantonly transferred or run through assets in an effort to prevent the other’s rightful share of them
- Where one party makes baseless court applications in a bid to dissipate funds, has been untruthful during proceedings, or has caused significant delay to the proceedings
- Where one party hides or gives incomplete or obfuscated disclosure of their assets, leading the court to deduce the existence of such assets
In a 2023 case, the court emphasised that for an allegation of financial conduct to be successful, the facts must be proved, meet the above threshold, and have a negative financial impact on assets. The person alleging the misconduct must also report it at the earliest opportunity, typically during financial disclosure.
What are the financial repercussions of bad behaviour?
If the misconduct has a “direct” negative effect on the parties’ finances, the court may examine the behaviour being complained about. The extent of any potential repercussions will vary and depend on the facts of each case.
If one party’s actions negatively affect the matrimonial assets, it can affect the division of those assets. For example, if one party has frittered assets away, squandered or hidden them in a blatant attempt to reduce their value, the court has the power to adjust the division percentage to compensate the wronged party. That said, the focus is on ensuring both parties needs are met. If the court believes this has been achieved and there remains an asset surplus, the court may “add-back” assets to the wronged party.
The welfare and best interests of any children remain the court’s paramount concern. So if the other party’s behaviour negatively impacts on the primary carer’s ability to provide a nurturing and stable environment affecting the child’s living conditions or emotional state, the court may order adjustments to be made to the asset division.
What are the penalties for misconduct during proceedings?
In cases where litigation misconduct had been found, the court may impose fines and penalties, particularly if it involves breaching a court order or causes unnecessary delays. A costs order requires the offending party to pay the legal fees of the wronged party to prevent further financial burden. In addition, the court can also issue injunctions or restraining orders to prevent further misconduct. However, such orders are generally only used in exceptional circumstances.
Litigation misconduct may include:
- Ignoring or breaching court directions/orders
- Failing to provide financial details during disclosure in a timely manner
- Failing to attend court hearings without good reason
- Deliberately misleading the court or other parties
Each case will be decided on its own facts and what might amount to litigation misconduct in one context, may not necessarily do so in another.
Can the court consider personal misconduct?
Whilst many think adultery or unreasonable behaviour should result in a more favourable financial settlement for the wronged party, these factors will not have any real bearing on division. For the court to consider personal misconduct relevant to the financial proceedings, the behaviour has to be exceptionally serious. Even then, there is no guarantee the court will see fit to penalise the “guilty” party financially.
Domestic abuse can occasionally be considered in financial settlements, but often depends on whether the conduct being complained about has negatively affected a party’s financial position or on their ability to generate an income and support themselves. In the case of H v H, violent conduct was taken into account during financial proceedings because the husband’s attack on the wife was so severe it affected her earning capacity.
What type of behaviour will not be accepted by the court?
The recent case of Finch v Baker looked at whether a spouse’s financial conduct should impact their financial settlement. The case involved Mrs Finch, who was a BBC executive earning £160,000 per year and her former husband Mr Baker, who was, at the time of the proceedings, an unemployed journalist. Unusually, perhaps, Mrs Finch earned significantly more than Mr Baker, and at the time of their divorce, the couple had assets in the region of £2.2 million.
During the case, Mrs Finch argued that Mr Baker’s financial contribution during the marriage was “significantly negative”, and that this behaviour needed to be taken into account when looking at the division of their assets, which, she argued, was primarily because of her efforts. The Court of Appeal rejected Mrs Baker’s assertions stating that Mr Baker’s conduct was not so bad that it would be inequitable to ignore it. Mr Baker received a sizeable financial settlement based on his needs and that of Mrs Finch, who was primary carer for their children.
Whilst it is fairly common that children are used by some parties as a bargaining chip, such as withholding contact, the court has no power to factor this type of behaviour into a financial settlement and the issues of child arrangements, maintenance, and parental responsibility are separate matters.
Related Articles
Load More