Regulation 

Splitting up the family silver

Contrary to popular belief, when it comes to dividing up the family finances on divorce, the courts are generally interested neither in the cause of the breakdown of the marriage nor a spouse’s behaviour either before separation or during divorce proceedings.

While it may be necessary to cite unreasonable behaviour grounds in the divorce petition, it is a completely separate issue to pursue conduct arguments within financial remedy proceedings. It may be tempting for a spouse to list details of the other’s bad behaviour, but the court has no desire to get involved in the matter of who was to blame for the divorce. As a result, in the vast majority of cases, a spouse’s conduct will have no impact on the financial outcome, and any bad behaviour will not affect their entitlement to a share of the assets.

There are, of course, exceptions to the rule, and indeed, family law judges are obliged to take into account conduct that “in the opinion of the court would be inequitable to disregard” when determining the division of the family finances. Parties are specifically invited to include detail of any such conduct in their form E financial disclosure statement if they believe that their ex-spouse should receive less of the financial ‘pot’ as a result. Such arguments could lead to the need for extensive narrative statements about the allegations and evidence given by both spouses in the witness box if the case proceeds to a trial. Clearly, this is likely to add to the cost and delay of the proceedings, and raise the temperature given the inflammatory nature of the allegations.

Exceptional

It is only in very exceptional circumstances that conduct is relevant to financial proceedings. In these cases robust advice to clients is required to ensure that irrelevant detail about conduct is not included in a spouse’s financial disclosure simply because he or she wants revenge or to ‘name and shame’ their ex-partner. This approach is not considered good practice, nor is endless solicitor correspondence on the topic. Clients need to be aware that there could be adverse cost consequences for pursuing inappropriate conduct arguments.

For conduct to be taken into account, it must be “gross and obvious”, and such that a right-minded member of society would consider it of a level to justify a reduction or extinction of that party’s financial claims on divorce. Indeed, even where it is found that the conduct is gross and obvious, it will still be just one of a number of factors taken into account in determining the division of the assets.

In addition to cases in which the physical conduct of one party has altered the financial award – for example, where a physical attack by one spouse has left the other unable to work – financial misconduct is often cited as a reason for departing from an equal division of the assets. This usually arises when one party has dissipated family assets and as a result the other spouse seeks to ‘add-back’ from their ex-partner’s share of the financial pot those funds that have been deliberately and wantonly spent. For example, in one of the leading cases in this area, Vaughan v Vaughan in 2007, the court was prepared to add-back sums spent recklessly by the husband on gambling after the parties’ separation.