How do affairs and bad behaviour affect the financial outcome of a divorce?

More often than not, the breakdown of a marriage results from the bad behaviour of one spouse, such as through an affair.

Here, Debbie Heald explores the circumstances in which conduct will have an impact on the financial outcome of a divorce.

Common misconceptions

Section 25(2)(g) of the Matrimonial Causes Act 1973 provides that the Court will consider conduct (among other factors) when making a financial order during the course of divorce proceedings “if that conduct is such that it would in the opinion of the court be inequitable to disregard it”. 

During the course of any financial proceedings, it’s possible for either party to cite conduct or bad behaviour where it’s asserted that this should be considered. However — despite clear guidance in case law to the contrary — it remains a common misconception that bad behaviour is routinely reflected in financial orders. 

In reality, ‘conduct arguments’ are rarely successful.

Exceptional circumstances

Since the introduction of the Matrimonial Causes Act over 50 years ago, guidance in case law has demonstrated that ‘conduct arguments’ are only considered in exceptional circumstances. 

In most cases, they won’t influence the financial claims on divorce and — importantly — the reasons for the breakdown of the marriage will rarely be a relevant factor, as these tend to be categorised as character flaws. 

In the leading case of Miller v Miller; McFarlane v McFarlane 2006, the Court emphasised that conduct should be gross and obvious. In this way, it’s reserved for truly exceptional cases.

Some examples of conduct that has been classified as inequitable to disregard by the Court are:

Brutal physical violence (often with correlating criminal convictions).

Sexual violence, assault, rape or harassment (again, often with correlating criminal convictions).

Financial misconduct (such as gambling, drug addiction or the use of escort services).

How does the Court approach bad behaviour?

Finding conduct inequitable to disregard is only the first hurdle to overcome. It doesn’t automatically follow that the Court will depart from the starting point of an equal distribution of the assets. 

The correct approach will largely depend on the weight that the Court attaches to other relevant factors (known as ‘Section 25’ factors). Commonly, this approach will ensure that the financial order meets both parties’ needs. Each case inevitably turns on the facts.

In cases where there are insufficient assets to meet reasonable needs, the Court may interpret the needs of one party more generously and consider them first, with care not to reduce the other party to a predicament of real need. 

In H v H (Financial Relief: Attempted Murder as Conduct), the Judge commented: 

“The proper way to have regard to such conduct was as a potentially magnifying factor when considering the wife’s position under the other subsections and criteria, placing the wife’s needs as a much higher priority to those of the husband, because the situation in which she found herself was, in a very real way, his fault”. 

This approach was followed more recently by the Court in S v S (Conduct: Pensions), where the Judge gave first priority to the wife’s needs and only considered those of the Husband when satisfied that hers had been met. This resulted in the wife receiving 85% of the capital assets and 66% of the pension assets.

In cases where there are sufficient assets to meet reasonable needs, the Court may consider a redistribution of assets or an ‘add-back’ of funds. 

For example, where there has been financial misconduct the Court may ‘add-back’ the matrimonial funds that have been recklessly dissipated by unfair and excessive expenditure by one party. Yet even where the level of funds spent is clear, it remains difficult to succeed with a conduct argument. 

In the case of MAP v MFR (Financial Remedies: Add-Back) 2015, the Court refused to add back the matrimonial funds spent by the husband on drugs, designer items and prostitutes. While it was acknowledged that the husband had acted irresponsibly, his conduct hadn’t amounted to the wanton dissipation of assets.

Conduct is just one factor

While it’s possible for the behaviour of one party to influence the financial outcome on divorce, in practice this is rarely the case. Conduct arguments are rarely pleaded and limited to extreme cases where such conduct is gross and obvious or assets have been recklessly dissipated. 

Conduct is just one factor to be borne into the difficult balancing exercise to determine whether there should be a departure from equality. Even in cases where bad behaviour is found to be conduct inequitable to disregard, this factor is all too often trumped by needs. 

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