Investments  

Will the introduction of no-fault divorce impact financial settlements? 

  • Describe some of the changes to the divorce system
  • Explain how the courts treat divorcing couples
  • Identify the impact behaviour has on the courts' decision
CPD
Approx.30min

In addition, it has to be considered that the family courts will not make awards punitive in nature; a concept highlighted in the case of Hall vs Hall where a line was drawn between matters dealt with by the family courts and those accusations left to criminal proceedings.

Financial conduct 

An example of where the court considered the financial conduct of the parties in depth was in the case of OG vs AG (2020). 

Here the court was primarily tasked with considering whether the husband’s decision to set up a company that directly competed with the company already jointly owned by the parties was conduct serious enough to affect the level of the financial award he would receive upon divorce. 

During proceedings, it was alleged that the husband’s actions had reduced the value of the jointly owned business by between 20 per cent and 40 per cent. In this case, the judge decided that the husband’s conduct should result in the value of his company being discounted by 30 per cent. 

Notably, in this case, the judge did not consider the husband's dishonesty as relevant and instead focused on the effect his actions practically had on the parties’ financial position. 

This case delved deeper into various other claims that the level of the husband’s award should be affected by his conduct, including his decision to sell multiple properties so that the proceeds be used for his gain and, correspondingly, his failure to disclose such transactions. 

Here, although the judge accepted the wife’s argument to have the value of these properties added back into the matrimonial pot, he did not accept that his failure to disclose his disposals would warrant the wife’s proposal of a division of two-thirds in her favour. 

In reality, the judge considered such a proposal unreasonable and took this into account when making an award for costs, awarding her only £328,020 when her total costs amounted to more than £600,000. 

This case is a warning to all parties considering their position regarding their spouses’ conduct. It appears from the case of OG vs AG that you may do more harm than good when pursuing this line of argument and that you must be very careful not to be too overzealous. 

What is considered when determining how assets should be split?

While a court can consider conduct, it is fair to say that it is a tough argument to make, and the court is not eager to allow parties' conduct to affect the overall result.