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Vardags Family Law Essay competition 2023/24 | Elspeth Rossiter

 

Elspeth Rossiter - University of Southampton

Should the UK courts consider parties conduct when deciding financial orders in divorce proceedings, since the development of no-fault divorces in the UK?

Introduction:

The main legislation surrounding divorce law is found in the Matrimonial Causes Act 1973 (MCA). The Divorce Dissolution and Separation Act 2020 (DDSA) has since amended the MCA. This amendment changed the substance of divorce law and updated key terminology. Previously The MCA 1973, s 1(3)(a) required one of the five facts to be established for the parties to divorce. There had to be evidence of either unreasonable behaviour, adultery, desertion, living apart for over 5 years, or an irretrievable breakdown of marriage. It is clear how conduct could be relevant to these previous justifications.

In the governments consultation paper, Reducing Family Conflict: reform of the Legal Requirements for Divorce, Justice Secretary David Gauke summarised popular concern that this requirement serves no public interest. It needlessly rakes up the past to justify the legal ending of a relationship that is no longer a beneficial and functioning one. At worst, these allegations can pit one parent against the other. The DDSA removed the requirement for one of the five facts and allowed couples to make a joint application with no fault. Hence, the introduction of no fault divorces was praised. Consequently, it must be questioned as to whether it is still relevant for the courts to consider conduct, and whether the inclusion of conduct facilitates justice when deciding financial orders in divorce proceedings since the introduction of no-fault divorce.

An exploration of misconduct prior to the introduction of no-fault divorces:

The Matrimonial Causes Act 1973 s.25(2)(g) established that courts were required to have regard to conduct if that conduct is such that it would in the opinion of the court be inequitable to disregard it. One of the first significant cases that explored conduct since the legislation was enacted was Jones v Jones (1975).In this case, the husband attacked the wife in such a violent manner she was left incapable of working. The financial order was that the husband was to transfer the wife the marital home, and she was then to transfer him one-fifth of the equity (an extremely low amount compared to the traditional 50/50 split). Mr Justice Latey defended the order as this was a case in which the conduct of the husband had been of such a gross kind that it would be offensive to a sense of justice that it should not be taken into account.. Jones v Jones follows a strict interpretation of the legislation and demonstrates that the courts will only allow conduct to influence a financial order when the conduct meets a high threshold of seriousness. Furthermore, this case supports Diducks research that early financial orders used a language of paternalism/welfare which reinforced the values and obligations of the traditional patriarchal family in which the breadwinner was obliged post-separation. The courts conceptualised the law so that parties retained high familial obligation, even once the relationship had ended.

Several other cases such as Hall v Hall (1984) (the wife stabbed the husband) and H v H (2005) (the husband attempted to kill the wife) support the pattern of the court requiring the conduct to meet an extremely high threshold for conduct to affect the financial order.

It must be questioned whether this interpretation of conduct law and its consequential financial order facilitated justice. However, justice in family law is not as objective as justice in other areas of law. Diduck states that A judges discursive choices reflect social and moral values and offer normative guidance to family members and to society as much as does the legal principle that their discourse frames.. When deciding financial orders the courts should recognise there needs to be a balance between legal and societal implications. Justice in family law cases is more complex than just simply applying the law; the human consequences must be considered. Equally, the family courts must be careful to stay within their limits: it is not the criminal court and orders should not be punitive.

The court continued to take a strict interpretation of the legislation as seen two decades later in A v A (1998). In this case, the husband raised allegations of adultery against the wife and argued for a reduction in financial award as a result of the wifes conduct. The courts stated this conduct did not meet the threshold outlined in The MCA.25(2)(g), and the final lump sum was not influenced by the wifes conduct. This case brings into question what the role of the family courts is. It would be impossible for the courts to allow every accusation of misconduct to influence their orders. In 2021 8.7% of divorce applications cited adultery as the reason for divorce: it would not be effective for this many financial orders to be influenced. Furthermore, the courts would not be able to quantify this misconduct, as it generally has no real financial impact.

The next significant case that follows a strict interpretation of The MCA s.25(2)(g) is Clark v Clark (1999). In this case, the wife demonstrated significant personal and financial misconduct. The parties were 35 years apart in age and had been married for 5 years. Over the course of their marriage, the wife pressured the husband to give her exclusive ownership of the majority of their assets and pressured him to buy her a substantial residence. The wife then took away the husbands phone and buzzer, forcing him to dwell in a caravan in the garden. The misconduct only came to an end when the husbands family (and the police) rescued him from the property. Consequently, when determining the appropriate financial order the courts quantified the wifes misconduct (quantified at £177,803) and reduced this from the final lump sum. The final lump sum awarded to the wife was £22,197; a small amount in comparison to Mr Clarks overall wealth. In this case, the wifes misconduct was both personal and financial. The threshold for financial misconduct was established in Martin v Martin (1976), in this case, Lord Justice Cairns stated that a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left, as he would have been entitled to if he had behaved reasonably.. It is persuasive that conduct facilitated a just financial order in Clark v Clark, as a 50/50 financial order would not have been reflective of the couples relationship, and the conduct displayed also had significant financial implications that must be considered.

The next significant case was Miller v Miller and McFarlane v. McFarlane (2006). In Miller v Miller and McFarlane v. McFarlane (2006) the House of Lords identified the elements or strands which make up a fair financial order. These are needs, compensation, and sharing. The most controversial element of this judgement was the element of compensation. Lord Nichols defined compensation as redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage. However, Lord Nichols emphasised this is not an invariable rule and each case rests on its unique circumstances.

Diduck argues Lord Nicholls is assessing traditional familial roles through a new discourse of equality/rights/feminism and this enables the issue of compensation to become entrenched.. The inclusion of compensation attempts to facilitate justice for the more financially vulnerable partner: current data from the Office for National Statistics shows that there are roughly 1.34 million stay-at- home parents in the UK and although the percentage of fathers staying at home is increasing, the vast majority are still mothers. Consequently, a fair financial order requires the mothers work within the home to be recognised and addressed in the financial order. This reveals that even in the event of the marriage breaking down, the courts support a high level of familial obligation.

A final case to explore is Owens v Owens (2018). In this case, the wife petitioned for divorce under the Matrimonial Causes Act 1973 s.1(2)(b); she alleged the husbands conduct meant she could no longer reasonably be expected to live with him. However, the court disagreed that Mr Owenss conduct met the threshold and Mrs Owens was to remain in the marriage for 5 years, upon which she would be able to rely on the grounds of 5-year separation and divorce without Mr Owens consent. Munby J explicitly states It is not a ground for divorce that you find yourself in a wretchedly unhappy marriage.... Eekelaar disagrees with the courts approach stating [w]here [love] has failed, it cannot be brought back to life by the legal process. It is therefore questionable what the role of the family court is: arguably it is not for the courts to decide whether a couple is to stay married and hence it is persuasive that the consideration of conduct in this judgement acted as a barrier to justice. Cretney supports this argument and similarly disapproves of this judgment on the basis that ought the decision whether or not a marriage should be dissolved to be one for the parties which the State is not in a position to question?, similarly Fergeron questions where a marriage has broken down as a matter of fact, ought one partys experience of the marriage to be sufficient to hold that it has also broken down as a matter of law, without the significance of that experience being vulnerable to challenge by either the other party or the State?. This critique once again brings into question what is the role of the family court.

In response to the pre-empted criticism, the judiciary repeatedly emphasised there was no such thing as a no-fault divorce and consequently one of the five facts must be satisfied. Lady Hale reminded critics It is not for us to change the law laid down by Parliament – our role is only to interpret and apply the law that Parliament has given us.. Whilst this is a persuasive and true point critics responded that the strict interpretation of conduct had limited the effectiveness of the law and stated the judgement highlighted the need for Parliament to reconsider the long-standing campaign for no- fault divorce.. Consequently, this judgement brings into question what the role of the family court is and whether their remit allows them to facilitate justice.

An exploration of the courts approach to conduct since the introduction of no-fault divorces:

OG v AG (2020) was the first significant conduct case to be heard since the introduction of the Divorce Dissolution and Separation Act 2020 introduced no-fault divorce. In this case, Mostyn J explores the role of the court when deciding financial awards stating:

[T]imes have changed. The financial remedy court is no longer a court of morals. Conduct should be taken into account not only where it is inequitable to disregard but only where its impact is financially measurable. It is unprincipled for the court to stick a finger in the air and arbitrarily to fine a party for what it regards as immoral conduct.

This statement is distinctly explicit, aligning with the positivist ideology that morality should not influence the law. It emphasises that it is not the role of the court to make a judgement based on moral values. However, it is then questionable why conduct (a moral concept) can be an influencing consideration at all. Furthermore, this removal of morals is inconsistent with the judgement in Kv L (2010) in which the husbands immoral and criminal conduct had a significant impact on the financial order. The following chapter will explore further the role of the family court and whether this is consistent with the role of conduct.

In OG v AG (2020) Mostyn J identified four scenarios when the courts should consider conduct.

The first scenario where the courts will consider conduct followed the precedent of Miller v Miller and McFarlane v. McFarlane (2006). This case was an example of personal misconduct and set the precedent that the courts will only consider conduct where there is evidence of gross and personal misconduct. Further case law surrounding personal misconduct since the DDSA 2020 must be explored, to see if judgements have remained consistent with pre-2020 case law. In the case, FRB v DCA (No 2) (2020) the wife allowed the husband to bring the child up, on the belief that it was his biological child; it was not. Cohen J concluded that this conduct did meet the threshold outlined in the MCA s.25(2)(g) threshold and consequently reduced the wifes financial award. The courts have maintained the high threshold for personal misconduct, since the introduction of the DDSA. This continued high threshold suggests that familial obligation remains a significant factor when deciding financial orders, and this obligation is only lowered in the most extreme of circumstances.

The second scenario where the courts will consider conduct followed the precedent of Norris v Norris (2002). The concept of add-back jurisprudence: Where one party has recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property, conduct may affect the financial order. This concept can still be seen in case law following the introduction of the DDSA 2020. In the case YC v SZ (2022) the courts added back a significant sum of £200,000 due to the wifes excessive legal fees. The judge, in this case, referenced the case Azarmi Movafagh v Bassiri- Dezfouli (2021) which followed precedent and emphasised the need to cross-check the fairness of the order, especially where add back jurisprudence is used. This caution is also found in BJ v MJ (2011) where Mostyn J statesThe problem with this technique is that it does not re-create any actual money. It is in truth a process of penalisation. In my judgment it should be applied very cautiously indeed and only where the dissipation is demonstrably wanton. Once again, the threshold for add- back jurisprudence has gone unchanged since the introduction of the DDSA. This supports the prior argument that familial obligation is a significant factor when deciding financial orders, and this obligation is only lowered in narrow circumstances.

The third scenario when the courts should consider conduct is in cases of litigation misconduct. In OG v AG, Mostyn J explains that where litigation misconduct can be proved it will usually be penalised in costs, rather than in the lump sum. Further case law surrounding litigation misconduct since the DDSA 2020 must be explored. In the case, HD v WB (2023) the husband was penalised in the lump sum for litigation misconduct due to unreasonably pursuing the argument that the couples prenuptial agreement should be disregarded. Further evidence of the courts considering litigation misconduct since the DDSA 2020 is the case DP v EP (2023). In this case, the wifes case was regarded as dishonest by the courts. The judge also awarded costs against the wife, even though her behaviour during the marriage had already been penalised by the unequal division of the assets to the husbands benefit. A final case to consider is Rothchild v De Souza (2020). This case reinforced that actions taken during litigation may fall under s.25(2)(g) and may impact asset distribution in addition to resulting in a costs award. The rationale was that funds allocated for legal fees could no longer be used to satisfy the needs of the parties or divided under the sharing principle if there was litigation misbehaviour (such as contempt of court, destructive litigation, etc.). An order for costs does not reverse the depletion of matrimonial assets because it only reallocates the residual assets. These litigation misconduct cases follow the same pattern as litigation misconduct cases decided prior to the DDSA, such as Martin v Martin (1975) and Clark v Clark (1999). Hence, it is evident that the courts have not changed their approach since the new legislation, and it is questionable (and will be explored in the following chapter) as to whether this stagnation has acted as a barrier to justice in financial orders, or whether there is no need for the courts to change their approach.

The fourth scenario where conduct may be considered and influence the financial order is where parties fail to give full and frank disclosure; as exemplified in NG v SG (Appeal: Non-Disclosure) (2012). In this case, the court warns parties the law of financial remedies following divorce has many commandments but the greatest is the absolute bounden duty imposed on the parties to give… full and frank disclosure. The continuity of this approach remains evident even after the introduction of the DDSA, exemplified in the case of X v Y (2022). In this instance, the husbands failure to provide complete and truthful disclosure led the judge to ascertain that the conduct threshold had been satisfied, prompting subsequent adjustments to the financial order. Once again, it is evident the courts have not changed their approach to disclosure since the introduction of the DDSA, and once again it must be questioned whether the courts should change their approach.

Conclusion:

There is significantly less case law exploring the courts approach to conduct since the introduction of the DDSA due to the fact that less than five years have passed since its introduction, but all of the case law examined suggests the courts have not changed their approach. Hallam highlights a critique of this stagnation; since the introduction of no-fault divorce academics has argued that conduct no longer needs to be considered: The established legal principle of "no-fault" as the basis for financial settlements, while hard for some to accept, protects clients from indulging in self-destructive and ultimately futile arguments about who was responsible for the breakdown of the marriage. However, it must also be recognised that several aspects of the courts approach do not need to change to facilitate justice and that it is more fair to retain this law.

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Bibliographies

1 The Matrimonial Causes Act 1973

2 Divorce Dissolution and Separation Act 2020

3 MCA 1973, s 1(3)(a).

4 Law Commission, Reducing Family Conflict: reform of the legal requirements for divorce (Law Com No 58, 2018)

5 Law Commission, Reducing Family Conflict: reform of the legal requirements for divorce (Law Com No 58, 2018) pg 3

6 MCA, s.25(2)(g)

7 Alison Diduck, What is Family Law for, (2011) Current Legal Problems - Volume 64 - Issue 1

8 Hall v Hall (1984) FLR 631

9 H v H (2005) EWHC 1513

10 Alison Diduck, What is Family Law for, (2011) Current Legal Problems - Volume 64 - Issue 1

11 A v A (Financial Provision) (1998) 2 F.L.R. 180; (1997) 1 WLUK 323 (Fam Div)

12 Divorces in England and Wales, Office for National Statistics, 2nd November 2022, accessed 18th December 2023

13 Clark v Clark (1999) 2 FLR 498

14 Martin v Martin [1976] Fam 335

15 Miller v Miller and McFarlane v. McFarlane (2006) UKHL 24.

16 Miller v Miller and McFarlane v. McFarlane (2006) UKHL 24.

17 Ibid, Para 13

18 Ibid, Para 29

19 Alison Diduck, What is Family Law for, (2011) Current Legal Problems - Volume 64 - Issue 1

20 Family and the Labour Market, Office for National Statistics, 22nd July 2022, Accessed 9th January 2024

21 Owens v Owens (2018) UKSC 41

22 Ibid, para 84

23 Eekelaar, J. (2016). Family law and love, Child and Family Law Quarterly, 28, 289-301.

24 Cretney, S. (2003). Family Law in the Twentieth Century, Oxford: Oxford University Press, para 90

25 Ferguson, L. Hard divorces make bad law (2017) Journal of Social Welfare and Family Law 39(3) 364.

26 Ibid

27 Indira Varma, The introduction of no-fault divorce: The case of Owens v Owens, Legally blog, 5th May 2021, (Accessed 15/11/2023)

28 OG v AG (2020) EWFC 52

29 HLA Hart, The Concept of Law (Clarendon Press 2012)

30 K v L (2010) EWCA Civ 125

31 OG v AG (2020) EWFC 52

32 Miller v Miller and McFarlane v. McFarlane (2006) UKHL 24.

33 FRB v DCA (No 2) (2020) EWHC 754 (Fam)

34 Norris v Norris (2002) EWHC 2996

35 YC v ZC (2022) EWFC 137

36 Azarmi Movafagh v Bassiri-Dezfouli (2021) EWCA Civ 1184

37 BJ v MJ (2011) (Financial Order: Overseas Trust) (at para [51])

38 HD v WB (2023) EWFC 2

39 DP v EP (conduct: economic abuse: needs) (2023) EWFC 6

40 Rothchild v De Souza [2020] EWCA Civ 1215

41 NG v SG (Appeal: Non-Disclosure) (2012) 1 FLR 1211

42 Ibid

43 Catherine Hallam, Protecting inherited assets against divorce: the rewards of a virtuous life P.C.B. 2011, 2, 99-103

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