Should conduct play a bigger role in divorce finances?

In divorce cases in England and Wales, financial outcomes are guided by section 25 of the Matrimonial Causes Act 1973 (the Act). The court must consider a list of factors – needs, contributions, earning capacity, standard of living, and so on – when deciding who gets what.

One factor that often sparks strong feelings but has limited legal weight is conduct. Many clients feel that unfair or abusive behaviour should affect the settlement. Yet in practice, only a very narrow type of misconduct is taken into account, the so-called “gross and obvious” conduct that it would be inequitable to ignore.

The current law on conduct

Under section 25(2)(g) of the Act, the court must 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.”

This has traditionally been interpreted very narrowly:

• Everyday marital conflict, or even infidelity, almost never affects the financial award.
• Conduct is usually relevant only where it is “gross and obvious” behaviour so serious that ignoring it would offend the court’s sense of fairness.
• Classic examples include extreme violence causing life-changing injury, serious financial recklessness or fraud, or a deliberate attempt to thwart the court process (for instance, by dissipating assets).

Cases such as H v H (Financial Relief: Attempted Murder as Conduct) [2005] and OG v AG [2020] illustrate just how exceptional conduct findings are.

Financial vs personal misconduct

The courts draw a clear line between:

• Personal misconduct, such as adultery, controlling behaviour or emotional abuse (this is rarely financially relevant unless it has a measurable impact on needs or resources); and
• Financial misconduct, such as hiding or dissipating assets, failing to comply with disclosure obligations, or deliberately reducing income to frustrate a claim which can directly affect the outcome.

The distinction is crucial. For example, where one spouse empties joint accounts or transfers assets abroad to put them beyond reach, the court can add those sums back into the asset schedule as though they still existed (“add-backs”), or adjust the award to compensate.

A shift in perspective: economic abuse and coercive control

In recent years, the conversation has widened. The rise of economic abuse as a recognised form of domestic abuse reflected in the Domestic Abuse Act 2021 has prompted calls for the family courts to give such conduct more weight in financial cases.

Economic abuse can include:

• Controlling access to money or information,
• Preventing a spouse from working,
• Running up debts in their name, or
• Concealing financial information.

While not yet a standalone ground for adjustment in financial remedy cases, judges increasingly acknowledge that patterns of economic abuse may influence the assessment of needs, earning capacity, and credibility.

The Financial Remedies Journal and several recent academic commentaries have urged reform, suggesting that conduct could be revisited to reflect modern understandings of harm, particularly where the victim’s financial autonomy has been compromised.

The policy debate

There are two schools of thought:

• Against expansion: Many judges and practitioners argue that widening conduct’s role risks turning financial proceedings into moral blame sessions and in turn driving up acrimony, delay, and costs.
• In favour of reform: Others contend that ignoring deliberate financial harm or sustained coercive behaviour fails to deliver real fairness, especially where the misconduct creates lasting economic disadvantage.

The Law Commission’s 2024 scoping paper on financial remedies included conduct as an area in need of clearer statutory guidance, recognising public frustration with perceived inconsistency.

Practical implications for clients

For practitioners, conduct should be pleaded sparingly and only where:

• The evidence is compelling and well-documented;
• The misconduct has a clear financial consequence (e.g. dissipation of assets, falsified disclosure); or
• It significantly affects the other party’s financial needs (e.g. inability to work due to abuse).

Otherwise, allegations may simply increase costs and distract from core issues. Clients should be advised that the system is based on financial fairness, not moral retribution.

Although conduct remains a limited and exceptional factor in financial remedy cases, evolving social attitudes, particularly around coercive control and economic abuse, are testing those limits. Future reform could see a more nuanced approach, distinguishing between conduct that is merely unpleasant and conduct that truly distorts financial fairness.

Until then, practitioners must continue to balance empathy for clients’ experiences with the legal reality: in most divorces, bad behaviour alone will not impact the financial division.

If you have questions or concerns about the issues raised in this Keynote, or on a family matter in general, please contact Grainne Fahy and Yasmin Khan-Gunns.