ASK A FAMILY LAWYER
In this regular column, Stowe Family Law solicitors address different legal issues and answer readers’ questions. Today’s topic goes to Mark Heppinstall, a solicitor in our Ilkley office. If you have a question, send it to our contact address and we’ll choose one to be featured.
Clients often ask me if the conduct of their spouse will affect financial arrangements following marital breakdown. Although it rarely does, I can quite understand why people might think otherwise, particularly when a client feels that their spouse’s conduct has:
- caused or contributed to the breakdown in the marriage
- resulted in financial loss; or
- frustrated court proceedings.
When thinking about how to divide marital assets the Court is obliged to decide whether either party’s conduct is relevant to their decision. In particular, the Court has 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…”
It is helpful to pause for a moment and consider what “conduct” actually means. As lawyers, when talking about conduct we are generally referring to specific forms of behaviour, which the Courts will tend to address in different ways.
To take the above examples, behaviour which causes or contributes to the breakdown of a marriage is often referred to as an example of “personal misconduct”. Meanwhile, behaviour which causes financial loss is often referred to as “financial misconduct” and behaviour that frustrates court proceedings is generally called “litigation misconduct”.
Personal misconduct is often relevant to divorce proceedings. For example, in England and Wales divorce petitions can be presented on the basis of the other spouse’s behaviour – for example adultery or ‘unreasonable’ behaviour. It follows therefore that personal conduct is relevant when considering how divorce proceedings might be progressed to end a marriage.
Having said that, neither unreasonable behaviour nor adultery actually have any impact upon how financial arrangements are actually made and it is the exception rather than the norm to see personal misconduct taken into account when the courts decide how to split the financial pot following the breakdown of a marriage.
Personal misconduct has to have been very serious to persuade a family court that it would appropriate to penalise the misbehaving spouse, by reducing their settlement. Some examples of cases where personal conduct has been held to be relevant include:
- a wife who shot her husband.
- a wife who stabbed her husband.
- a husband who attacked his wife with a razor.
- a husband who committed incest with his children.
The courts are generally more likely to take into account financial misconduct than it is personal misconduct, though this is still the exception rather than the norm. This is particularly so in circumstances where a party has recklessly ‘dissipated’ (spent or disposed of) assets before or during financial remedy proceedings.
Examples of behaviours which might constitute relevant financial misconduct include:
- excessive gambling
- lavish, unjustified spending; or
- trying to place assets beyond the reach of one party, for example by transferring property into a third party’s name.
The situation is by no means clear-cut however. Indeed, in the well publicised case of MAP v MFP (heard by Mr Justice Moor in 2015) the wife was unsuccessful in arguing that her husband’s conduct was relevant; despite the fact that he was alleged to have spent up to £6,000 a week on cocaine, he had a long-standing gambling problem and he had periodically paid for the services of escorts!
Fast forward to 2017 and the case of R v B & Others (also heard by Mr Justice Moor) makes an interesting comparison. In this case the husband was heavily criticised for the way he managed his finances, having failed to pay tax for over 20 years, claiming that he had no income and illegitimately drawing money from a family business to disastrous effect. In this case the judge did not hesitate to find that the husband’s conduct was relevant. He therefore favoured the wife’s case and this ultimately resulted in the court endorsing her proposals for settlement.
Often, when financial misconduct has been found, the court will endeavour to rectify the wrong caused to the innocent party by ‘adding back’ the money or assets that have been dissipated and treating the case as if the party at fault still had them. In practice this means the court may be more willing to depart from the starting point of equal sharing and give more assets to the innocent party to produce a fairer result.
Litigation conduct is more about how parties behave in court proceedings. Examples of litigation conduct which are likely to be taken into account by the court include:
- Ignoring or breaching court directions.
- Failing to provide financial details (‘disclosure’) in a timely manner.
- Failing to attend court hearings without good reason; or
- Deliberately misleading the court or other parties.
In contrast to personal and financial misconduct, litigation misconduct tends to be addressed by the making of an ‘adverse costs’ order. What this means in practice is that the party at fault may be required to pay all or a contribution towards the innocent party’s costs.
The key lesson here is that each case will turn on its own facts and what might constitute misconduct in one context will not necessary do so in another. In the absence of certainty it is important that careful consideration is given to legal arguments relating to conduct at an early stage, particularly if there is a possibility that it might be a relevant feature in your case.
This is all the more important because if a conduct argument is pursued in court unsuccessfully, or one fails because it lacks merit, then an adverse costs order could be made against the person who tried to make it.
If you think conduct might be a relevant feature in your case feel free to contact one of our lawyers to discuss this further and we will be happy to provide you with a general appraisal of your case.