Can conduct be taken into account in financial proceedings?
Yes, it can. But, (there is always a but!) it depends on the circumstances of the case. Conduct is one of many factors the court can take into account when deciding what the financial outcome of contested proceedings should be. However, conduct will only be taken into account only if it is ‘obvious and gross’ and ‘of the greatest importance’ and ‘only where its impact is financially measurable’.
How do the courts deal with allegations of conduct?
The Court has to ask itself two questions:
- Is the conduct the type of conduct that would be inequitable (unfair) to ignore?
- If yes, what effect, if any, should the conduct, if taken into account, have on the outcome of the financial proceedings?
So, what types of conduct can be taken into account in financial proceedings?
It has been noted in case law that there are four types of conduct:
- Gross and obvious personal misconduct requiring a financial consequence if it is to be reflected in the award.
- Wanton and reckless dissipation of assets leading to add-back.
- Litigation misconduct leading to a costs order.
- Non-disclosure leading to adverse inferences being drawn about the extent of the assets.
Note there is a difference between personal misconduct and litigation misconduct.
What amounts to ‘personal misconduct’?
- Husband attacked wife with a razor blade causing disability impacting her ability to work, the whole house was transferred from joint names into her sole name.
- Wife lived at her parent’s home and refused to live with husband in the home he had provided, wife’s financial provision was reduced.
- Wife committed adultery with husband’s father.
- Husband disposed of assets and abducted the child.
- Husband refused to sell or let the family home and was convicted of attempted murder of the wife. The family home was transferred to the wife together with the majority of the assets.
What amounts to ‘financial misconduct’?
Financial conduct that reduces the ‘matrimonial pot’. For example,
- Disposing of assets
- Transferring assets to a third party
- Excessive credit card spending
- Luxurious holidays (if different to the standard during the marriage)
- Expensive cars (if different to the standard during the marriage)
What amounts to ‘litigation misconduct’?
- Taking bad points
- Misleading the court
- Illegal/improper conduct within litigation
- Failure to engage in mediation
Standards change and the facts of cases are always different so the examples given above should be used as examples rather than an exhaustive list. Ultimately, the court will decide. It should also be noted that the cases above are the exceptions rather than the norm. Often conduct claims within financial proceedings are unsuccessful. It is recommended that legal advice is sought.
For further information contact Karen Newman.