Recent High Court authority has reaffirmed the limited but potentially powerful role of personal conduct in Financial Remedy proceedings. Under section 25(2)(g) Matrimonial Causes Act 1973, the court may take account of a party’s conduct if, in its opinion, it would be inequitable to disregard it. The statutory wording is broad, but the case law has consistently imposed a high threshold.
Ordinary marital misconduct, including infidelity or general acrimony, will rarely justify a departure from needs or sharing. However, domestic abuse is not ordinary marital conduct, so where does it stand?
The recent decisions of Cusworth J in LP v MP [2025] EWFC 473 has brought renewed focus to how and when conduct may meet the demanding test of exceptionality. His judgment demonstrates a willingness to scrutinise serious personal misconduct, including coercive and controlling behaviour where it has tangible relevance to the fairness of the Financial Remedy process.
Cusworth J outlines the typical legal framework on financial conduct from OG v AG [2020] EWFC 52, Tsvetkov v Khayrova [2023] EWFC 130, Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115 and N v J [2024] EWFC 184. The author will not spell this out here in any detail, but the pertinent points are summarised as follows:
- There are four distinct scenarios for conduct: personal conduct including financial misconduct, add backs for dissipation of assets, litigation misconduct, and inferences drawn from a lack of, or poor, disclosure.
- A party asserting conduct must prove the facts relied upon and if established, that the fact meets the consistently high or exceptional threshold. They also need to show that there is an identifiable negative financial impact on the party who has been wronged.
- Conduct under s.25(2)(g) must necessarily be quantifiable in monetary terms rather than seen as a penalty to be imposed against the errant partner and the orthodox approach to litigation conduct is to be met with an award of costs. A party’s conduct may be the glass through which the court assesses fairness.
- Financial consequence is a necessary ingredient for conduct to be reflected in the award, even if the financial impact is not always easily measurable and there must be a causal link between the conduct and the financial consequence.
In LP v MP, the court accepted the allegations of a sustained pattern of deceit, manipulation, dishonest disclosure and controlling and coercive behaviour by W towards H. Cusworth J at paragraph 43 of his judgment outlines that identifying the financial impact of controlling and coercive behaviour may be difficult, and it may impact upon a party achieving self-sufficiency or upon a party’s ability to achieve a fair financial outcome in the circumstances.
However, Cusworth J was of the view that there is a real risk of unfairness to victims if the lack of readily quantifiable loss prevents the court from even considering the conduct. Cusworth J was clear however, that this does not mean that the fact of controlling and coercive behaviour being present will inevitably lead to a different award, but in the right cases, it clearly should do.
Cusworth J emphasised that conduct need not always produce a neatly quantifiable financial loss to be relevant. Where behaviour is “gross and obvious” and corrodes the integrity of the proceedings, it may be inequitable to ignore it. In LP v MP the conduct was egregious, and it passed the ‘obvious and gross’ test. In assessing the impact Cusworth J determined that W’s notional half share should be reduced by 40% to account for a complete lack of contribution which was rendered significantly more acute when considered through the glass of her deplorable conduct. In real terms this meant her 50% share was reduced to 30%.
The judgment is particularly important in the context of domestic abuse allegations. The family courts have increasingly recognised coercive and controlling behaviour as a serious form of domestic abuse in Children Act proceedings, but it remains far more enigmatic in Financial Remedy proceedings.
Not every finding of abuse will affect the financial award: some may never meet the exceptional threshold, and some may never have an identifiable or quantifiable financial impact. But, as Cusworth J states at paragraph 43, in the right cases the conduct clearly should do.
When it comes to personal conduct, and specifically domestic abuse, the courts remain cautious. Conduct arguments must be clearly pleaded, supported by cogent evidence, and proportionate. The mere fact of marital wrongdoing, or even the existence of domestic abuse, does not automatically translate into an adjusted financial award. The focus remains on exceptionality and the financial impact of the conduct assessed on a case by case basis.
With the rise of recognition of the impact of domestic abuse upon families and children within s.8 Children Act 1989 proceedings there appears to be a disconnect between the way domestic abuse is viewed in those proceedings and how it is viewed in Financial Remedy proceedings under Matrimonial Causes Act 1973.
The answer as to why there is such a different approach between Children Act 1989 proceedings and Financial Remedy proceedings may be quite straightforward.
The scope of Children Act 1989 proceedings is focused upon the welfare of children, the paramount concern of the court, and feeding into that assessment is the impact of domestic abuse both on children and upon any carer subjected to domestic abuse as outlined in Family Procedure Rules 2010 Practice Direction 12J. The scope of the proceedings centre around child arrangements and the impact upon children’s welfare of arrangements. This includes any risk of harm through findings of domestic abuse; it can have a significant impact on a victim as a carer which also impacts a child and are often reflected in the recommendations to the court as to what the child arrangements should look like.
In Financial Remedy proceedings however, the court is seeking to place the parties into a position of financial independence, and whilst any minor child is the court’s first consideration, the scope of s.25 Matrimonial Causes Act 1973 is around financial fairness and independence. In most cases domestic abuse perpetrated by one party against the other will not have an impact upon the financial fairness of the case because it will not be so obvious or gross that it would be inequitable for the court to ignore, or it may not have an identifiable financial impact. What LP v MP confirms is that in the right cases, the court will make adjustments to division to account for significant domestic abuse, and sometimes a significant adjustment when it would be unfair to ignore the conduct, even if there is no readily quantifiable financial loss.
This does not mean that domestic abuse is taken less seriously by the court in Financial Remedy proceedings or that its impact upon a victim is discounted, it is rather that how domestic abuse factors into the division of financial assets is fundamentally different than how it factors when the court is assessing the welfare of children.
For practitioners, speculative conduct claims remain risky and costly for parties. But in cases involving serious domestic abuse, particularly coercive and controlling behaviour, the High Court has demonstrated a readiness to depart meaningfully from equal sharing where the conduct justifies it even if there is no readily identifiable financial loss.
Author: Joshua Longhorne
Joshua can be instructed by emailing his clerks at clerks@northampton-chambers.co.uk or by telephone at 01604 636271.
Disclaimer:
This publication is intended to be a general summary of the relevant law and/ or guidance at the time of writing. It should not replace legal advice tailored to your specific circumstances. No liability is accepted for any omission or error wherein.
References:
LP v MP [2025] EWFC 473
N v J [2024] EWFC 184
Tsvetkov v Khayrova [2023] EWFC 130
Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115
OG v AG [2020] EWFC 52
Family Procedure Rules 2010 Practice Direction 12J