Law Articles

What type of conduct can have an impact on how the court distributes assets on divorce/dissolution? 22/12/2023

When parties divorce, the court considers a whole host of factors when determining which order the court should make in relation to division of family assets. These factors include, but are not limited to, the length of the relationship, the age or the parties, their occupation, their earning capacity, etc. The court may also consider a party’s conduct if it deems it inequitable to disregard such behaviour.

It is pivotal to recognise that the court’s foremost objective is to ensure equitable fulfilment of both parties’ financial needs. Consequently, conduct is only weighed in ‘very exceptional circumstances’ where it is ‘obvious and gross’ and it would be ‘inequitable to disregard’ such conduct. This principle holds true for situations of gross and obvious personal misconduct, reckless dissipation of assets, litigation misconduct, and non-disclosure. 

1. Gross and obvious personal misconduct includes severe actions that lead to significant financial consequences. This generally pertains to instances causing substantial harm, impairing one’s capacity to generate income, etc. 
   
   
2. Wanton and reckless dissipation of assets involves intentional or reckless actions that squander or deplete marital assets, thereby impacting the available financial resources for distribution. 
   
   
3. Litigation misconduct encompasses breaches in procedural rules, such as falsehoods or deliberate non-disclosures during legal proceedings. This misconduct can result in a costs order and occasionally impact the overall financial award. 
   
   
4. Non-disclosure occurs when one party fails to fully disclose their assets. 
   
   

The following cases illustrate instances where conduct played a role in the court’s decision-making process

1. YC v ZC [2022] EWFC 137: Here the court addressed overspending on legal costs by employing a robust approach to ‘add back’ expenditures. 
   
   
2. Tsvetkov v Khayrova [2023] EWFC 130: In this case the wife’s actions, including removing joint assets from the jurisdiction and colluding against the husband, influenced the court’s decision on costs but did not significantly impact the asset division. 
   
   
3. FRB v DCA [No. 2] [2020] EWHC 754 (Fam): Conduct involving deceit about the child’s paternity was balanced against disclosure, resulting in no reduction in the wife’s award.
   
   
4. A notable recent case, Seales v Seales (2023), heard in the High Court in Northern Ireland, demonstrates the court’s assessment of the impact of conduct on asset division. In this case, the court addressed conduct involving murder, coercive control, and financial mismanagement. The court acknowledged the husband’s involvement in the murder of his victim had a profound impact on the wife’s physical and mental health, as well as her ability to earn a living. The court considered this case to be a ‘paradigm example’ of a conduct case where the husband’s conduct was so outrageous that it would be inequitable to disregard, ultimately dividing the matrimonial assets as to 75% to the wife and the balance to the husband. However, the court made it clear that this was not further punishment to the husband and that the unequal division was due to the impact of the husband’s conduct on the wife’s physical and emotional wellbeing, such that the court did not foresee her ever being able to work. The court did not add back the assets the husband had disposed of due to lack of evidence presented by the wife, and the court made a costs order against the husband in respect of his litigation misconduct.

While conduct may occasionally influence asset distribution on divorce/dissolution, its significance remains confined to rare circumstances where it would be unjust to disregard its impact.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.