Personal conduct in financial remedy proceedings - a need for reform?

“The increasing awareness of the incidence of domestic abuse, and its harmful and pernicious effects, does not lower the conduct hurdle to be surmounted in financial remedy proceedings.”

These are the words of Mr Justice Peel in his recent judgment in N v J [2024] EWFC 184. They come at a time when a spotlight has been placed, following developments including the Domestic Abuse Act 2021, on whether domestic abuse should be considered ‘conduct’ relevant for the purposes of financial remedy proceedings.

This is clearly a very sensitive topic, but the law on this issue, as it stands, is relatively clear. Pursuant to section 25(2)(g) of the Matrimonial Causes Act 1973, the court is to have regard, when determining a financial remedy application, to ‘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’. There is no statutory definition of ‘conduct’, but case law has served to develop a judicial gloss on s.25(2)(g). Four distinct scenarios in which conduct may rear its head in financial remedy proceedings have been identified in case law, the first of these being personal conduct. In order to be taken into account, the conduct must be “both obvious and gross” (Wachtel v Wachtel [1973] Fam 72) or, as more recently framed, ‘of a high degree of exceptionality’ (N v J) and, crucially, as Mr Justice Peel has made clear, must have a financial consequence. Although there remains a possibility of conduct being taken into consideration absent a financial consequence, such cases will be “vanishingly rare”¹.

As such, notwithstanding the increased recognition and focus on domestic abuse within wider society, the position remains that, as a matter of law, there is a very high hurdle to be crossed before personal conduct will be taken into account by a court considering financial remedies upon a divorce. Examples of personal conduct which has been taken into account include attempted murder (H v H (Financial Relief: Attempted Murder as Conduct) [2005] EWHC) and an attack with a razor, causing permanent disability (Jones v Jones [1975] 2 AER 12).

Whilst this is one aspect of the law where there is relative certainty, there have been calls for reform from some quarters. The issue of domestic abuse as conduct has been canvassed in a number of recent reports, including the Law Commission’s December 2024 Scoping Report on Financial Remedies on Divorce and Dissolution.

What is clear from that report is that opinions are mixed. There is absolutely no denying that, in the words of Mr Justice Peel in N v J, domestic abuse is “vile and indefensible”. But widening the scope for domestic abuse to be considered conduct within financial remedy proceedings brings with it a whole raft of issues, including, in particular, the floodgates argument – namely, that widening the law in this way would lead to a proliferation of cases in which domestic abuse is being raised as a conduct argument, requiring increased court resources and time. A court would have to establish, firstly, whether there has been domestic abuse, which may necessitate a fact-finding hearing, and then determine the relative weight to be accorded to it. This would involve the courts doing exactly what Mr Justice Coleridge warned against in G v G [2002] EWHC 1339, namely, rummaging around in the attic of a couple’s marriage.

It would also inevitably increase uncertainty in the law (in turn leading to fewer settlements), not least because of the difficulty in a court quantifying the impact of domestic abuse if the need for a financial consequence was removed, whilst also seeming to run counter to the changes made by the Divorce, Dissolution and Separation Act 2021 in the form of the introduction of no-fault divorce, which removed the necessity to assign blame and thus to have to list out instances of unreasonable behaviour where this was being used as the fact to establish the irretrievable breakdown of the marriage. Moreover, there is a strong argument to be made that domestic abuse can, in any event, be taken into account, where appropriate, via the other section 25 factors, in particular, a party’s earning capacity or needs can be impacted by domestic abuse, and both of these factors are required to be considered by the court in financial remedy proceedings.

In such circumstances, it is perhaps not surprising that almost all of members of the judiciary to whom the Law Commission spoke, and many legal practitioners, were opposed to greater recognition of domestic abuse as conduct.

Perhaps the answer instead is to look to the other types of conduct, in particular, add-backs where one party has wantonly and recklessly dissipated assets, and litigation misconduct, and seek to widen the scope/use of these, for example, increasing the use of costs orders in cases of litigation misconduct. This is particularly relevant in the context of domestic abuse as perpetrators of domestic abuse often seek to continue to exert financial control post-separation by not disclosing assets or delaying financial remedy proceedings. Such instances of conduct are more easily assessable and do not require ‘rummaging around in the attic’ of a marriage.