Divorce Conduct and Financial Settlements

Since the introduction of No-Fault Divorce in April 2022, although the allegation of unreasonable behaviour is no longer a ground for divorce, a spouse’s behaviour or conduct can still be considered by the court in relation to any financial settlement.

What is ‘conduct’?

The courts have a series of factors which must be taken into account within financial remedy proceedings. These are known as Section 25 factors, as they are found in section 25 of the Matrimonial Causes Act 1973. Section 25(2)(g) explicitly refers to the conduct of a party, “if that conduct is such that it would be inequitable to disregard it”. The threshold is therefore high, and most day-to-day grievances will not be considered.

Examples of ‘bad’ behaviour and whether it constitutes conduct:

• Personal Behaviour during a marriage will usually not affect a divorce financial settlement. For example, adultery will not be taken into account in financial proceedings, and whilst morally wrong, it does not meet the threshold of being so bad that the court must have consideration of it in the proceedings.

• Another example is domestic abuse, and although it is understandable the victim often feels the abuse should be taken into account in the divorce settlement, thus reducing the award to the abuser.  However, the conduct must be ‘gross and obvious’, ‘inequitable to disregard’ as well as quantifiable (i.e. there must be a clear financial impact).  As a result, there are very few published cases where conduct has a clear and direct impact on the financial outcome, especially cases with limited assets (due to the cost of going to trial). However, the recent case of MRU v ECR (Financial Remedies) [2025] EWFC 218 (B) (21 July 2025) is an example of one of those rare cases.  This case is an example that serious domestic abuse, if it meets the necessary threshold and has a financial impact, will be taken into account by the court even in cases with very limited assets to divide. However, the threshold remains high, and in this case the Judge explained that the threshold had been met because the wife had admitted the offences and been imprisoned as a result.

• Dissipation of assets – where assets have been deliberately dissipated, the court may apply an “add-back” approach to prevent unfair advantage. This is where one party has purposely extended borrowing, sold or transferred property to a third party to frustrate the claim of their spouse. Freezing injunctions can also be obtained to freeze assets on a worldwide basis if there is a risk of dissipation intended to defeat a claim.

• Overspending – what is considered overspending or poor money management will be subjective based on the parties’ assets and their lifestyle throughout the marriage.  The case of Norris v Norris [2002] EWHC 2996 (fam) established the test that spending must be reckless. In this case, the wife’s assets were £3.6 million, and the husband’s were £4.16 million. In the two years post-separation, the husband had overspent by about £350,000 on expensive living, holidays with his new partner, and ordering a Ferrari. The judge ‘added back’ a notional £250,000 to the husband’s assets to reflect the funds that had been recklessly spent. Subsequent case law has suggested that the spending must be deliberate or wanton dissipation of assets in order to reduce their spouse’s claim.

• Compare this to the decision in MAP v MFP [2015] EWHC 627, where the husband was spending £6,000 per week on cocaine and sex work. Although his conduct was morally wrong, it was down to his flawed character and not an attempt to reduce his wife’s claim. The judge did not add back any of the spent funds and held that you must take your partner as you find them.

• Gambling can be a strong argument for an add back claim. In M v M (Financial Misconduct; Subpoena Against Third Party) [2006] 2 FCR 555, the wife argued that the husband had dissipated funds by gambling, unwise business transactions, and mortgage arrears. The wife succeeded in her claim for an add back in relation to the husband’s gambling; however, it was impossible to quantify the dissipation. The wife knew he gambled, but not the extent of it. The husband had given an undertaking not to gamble further until the conclusion of the proceedings; however, he had continued to gamble. The joint assets were therefore divided 62.5/37.5 in the wife’s favour.

• Litigation misconduct – is where a spouse deliberately fails to comply with court directions, is unreasonably pursuing particular issues, or failing to negotiate reasonably. The usual rule in family proceedings is no order as to costs, meaning each party is responsible for their own legal fees. However, litigation misconduct can result in a costs order being made against a party. The behaviour is usually penalised in costs orders, but it can also be taken into account in the overall division of matrimonial assets. In DH v RH [2024] EWFC 79, in addition to an ‘add back’, the court made costs orders of £255,654 against the wife due to her litigation misconduct, which included stealing confidential financial information from the husband.

If you would like to discuss the issues in this article further and need advice on a conduct issue in your divorce, please contact Linda Pope in our Family Law team.

The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.