Clients will often ask whether one party's conduct will make any difference to the financial settlement. Very rarely is conduct taken into account by the court when determining how the parties' assets are to be divided. 

When we say that bad behaviour or “conduct” almost never makes a difference to the financial settlement, we mean that occasionally, it does. Before we look at some cases where conduct has made a difference, we should emphasise that the courts are very reluctant to accept arguments of this nature. Judges are not there to give a moral view as to how someone has behaved during a relationship. They are there to apply the law and bring about a fair and principled outcome. The introduction of “conduct” arguments will almost inevitably raise the level of acrimony, reduce the likelihood of the parties agreeing the financial settlement and thereby increase costs.

The legislation states that conduct should be taken into account where it would be “inequitable to disregard”. An influential 1973 case, Wachtel v Wachtel stated that conduct has to be “both obvious and gross” before it will make a difference. Judges have also talked about a “gasp factor” when considering the threshold of bad behaviour to be reached before the “guilty” party is punished in financial terms. Historic examples have included:

• a wife who shot her husband
• a husband who injured his wife with a razor blade so seriously that she could no longer work
• a husband who committed incest with the children of the family
• a husband who attacked the wife so seriously that he was imprisoned for attempted murder
• a wife who drugged her husband and then put a bag over his head

The actual financial difference attributable to this behaviour is difficult to tease out because the overall outcome will depend on a range of other factors that the court has to consider. However, the discretion to change the financial outcome because of one party’s behaviour is exercised rarely and only in the most shocking of cases.

We have talked about situations where bad behaviour is so offensive that it will change the outcome of a case even if the behaviour has no direct financial consequences. However, there are cases where the bad behaviour complained of is of a financial nature. These types of cases are more common than the “gasp factor” cases we have looked at already. One famous example was Heather Mills-McCartney’s overspending following her separation from Sir Paul. There have been other cases where a party has lost money through recreational gambling or needless and extravagant expenditure, particularly where it can be shown that money has been spent with the aim of reducing the family’s wealth. In situations like this, the court can pretend that the guilty party still has the money when working out a fair division of assets. This is sometimes known as reattribution or adding-back.

For example, Mr and Mrs X had a combined fortune of £2m. Having been married for 25 years, the answer would usually be that they should each get £1m. However, after separation Mr X spent £200,000 on a lavish holiday for himself and his friends including the hire of a private jet and time on a private island. Rather than simply dividing the remaining £1.8m down the middle, leaving each party with £900,000 each, the court might well pretend that Mr X still had his £200,000, giving Mrs X £1m and Mr X £800,000.

In cases of alleged reckless spending the court should only consider making adjustments where there is clear evidence of “dissipation”. The court will not be interested in an argument that a person should be penalised for shopping at Waitrose when they ought to have gone to Aldi. They will also not want to pick over tiny examples of perceived extravagance; it needs to be something pretty big, like Mr X’s holiday! Most importantly of all, the court will not allow a situation to arise where a person is left with only imaginary money so that they cannot meet their basic needs.

The final category of misbehaviour relates to how the parties act within the actual court case. In many financial cases, the parties have to provide extensive information about their income and assets and may be asked written questions about their circumstances. If a party repeatedly delays or refuses to provide information then the judge can make costs orders against them. This would mean that rather than a party being responsible for their own lawyer’s fees alone, they might also have to make a contribution to the other party’s legal fees. This might reflect the additional costs the “innocent” party has had to spend in order to force the “guilty” party to come up with information and documents they should have provided voluntarily.

The breakdown of a relationship can bring about the airing of a whole range of grievances and some individuals may feel that the only just outcome would be for the person perceived to be at fault to be penalised financially by the court. In practice, the court is extremely reluctant to do this and will only allow it where the circumstances truly justify it. In all but a handful of cases, spending time and money trying to get the court to find fault will only reduce precious resources without achieving any additional gain.

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Alternatively read more about divorce here, and more about civil partnership dissolution here.