Lots and lots of our clients instantly start discussing their financial claim and how they must be entitled to more because of the other party’s behaviour. This is often difficult for clients as they feel they have suffered and should be “compensated” but that is not how the courts will deal with it and we have this conversation over and over again. We have decided to do this article to set out what “conduct” actually means in the terms of relying on it in a financial proceedings case in the UK.
In a financial remedy case (part of divorce or dissolution proceedings in the UK), bad conduct refers to behaviour by one party that is so serious it would be unjust for the court to ignore it when dividing finances.
However, the threshold for this is very high — the courts generally do not punish moral failings or relationship misconduct. The focus is on financial fairness, not retribution. This is often where clients struggle to understand why they should not get more but the conduct really does have to be extreme. The court is aware that one or both parties may have behaved badly as you are going through a divorce. The court may also be aware that certain behaviours and incidents have taken place but again the focus is on financial fairness.
Here’s a breakdown:
1. Legal Framework
Under section 25(2)(g) of the Matrimonial Causes Act 1973, 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 means only exceptional conduct affects the financial outcome.
2. Types of Conduct That Might Count
There are two main categories:
A. “Financial misconduct”
These are the most commonly relevant to financial remedy cases. Examples include:
- Dissipating assets: Spending, transferring, or hiding money or property to reduce the marital pot before division (e.g. gambling, giving assets to relatives, or moving funds offshore).
- Failing to disclose assets: Lying or omitting key information in financial disclosure (Form E).
- Breaching court orders: Ignoring maintenance, non-disclosure, or freezing orders.
- Fraudulent or dishonest conduct: Forging documents or deliberately misleading the court.
These directly affect fairness, so the court can:
- Add back (“notional”) assets that were wrongly spent;
- Penalise the dishonest party in costs;
- Adjust the award in favour of the innocent party.
B. “Gross personal misconduct”
Exceptionally bad personal behaviour can be considered, but only if it’s so extreme it would be “inequitable to disregard”.
Examples (rare cases):
- Serious domestic violence causing long-term injury or trauma;
- Attempting to kill or severely harm the other party;
- Criminal conduct leading to imprisonment and serious loss to the family.
Everyday cruelty, adultery, neglect, or emotional abuse will not normally count — even though morally wrong, the law views them as part of marital breakdown, not as financial factors.
3. Consequences of Bad Conduct
If proven, the court may:
- Make a costs order (the misbehaving party pays the other’s legal fees);
- Adjust the division of assets (the other party receives more);
- Add back dissipated assets to the pool;
- In extreme cases, strike out or stay proceedings.
4. What Is Not Bad Conduct
Courts usually ignore:
- Infidelity;
- Leaving the marriage;
- Arguments, shouting, unkindness;
- Poor parenting (unless extreme or criminal);
- Modest spending during separation.
- Key Cases
- H v H (Financial Relief: Attempted Murder as Conduct) [2005] — extreme violence considered relevant.
- MAP v MFP [2015] — extravagant spending (“add-back” principle).
- Vaughan v Vaughan [2008] — harassment and unpleasant behaviour ignored; not inequitable to disregard.
- Martin v Martin [1976] — financial misconduct (selling assets) led to adjustment.
If you were successful in running a conduct case here are some of the orders that could be made:-
1. The “Add-Back” Principle
If one spouse deliberately wastes or dissipates assets, the court can “add back” the value of those assets into the marital pot as if they still existed.
Purpose: The idea is fairness: the wrongdoer should not benefit from their own reckless or intentional depletion of assets.
For example, let’s say:
- The marital pot was £1 million.
- Before the case, the husband spends £200,000 gambling.
- The court finds that this spending was reckless and deliberate (not ordinary lifestyle).
- The court may “add back” that £200,000, treating the total assets as still £1 million, and dividing accordingly.
That doesn’t mean the money reappears — it’s a notional adjustment so the innocent party gets a bigger share of the remaining assets.
Key Case:
Vaughan v Vaughan [2007] EWCA Civ 1085
The husband’s extravagant spending was treated as “reckless” and an “add-back” was applied.
The court emphasised this remedy is exceptional and only used for clear, wanton dissipation — not ordinary lifestyle spending.
Typical Examples of Add-Back:
- Gambling or drug use draining savings;
- Lavish spending to reduce the marital pool;
- Selling or gifting property to relatives cheaply;
- Running up debts to disadvantage the other spouse.
But:
The court won’t “add back” every unwise or wasteful act — only intentional or reckless conduct. Therefore it is necessary to prove their behaviour was intentional or reckless.
2. Costs Orders for Litigation Misconduct
Courts rarely make costs orders in financial remedy cases (the usual rule is each pays their own), unless one party behaves unreasonably or dishonestly during proceedings.
Examples of Litigation Misconduct:
- Failing to disclose assets or lying in Form E;
- Falsifying documents;
- Refusing to negotiate sensibly or comply with directions;
- Making false allegations or prolonging litigation unnecessarily.
Key Authority:
FR v DFR [2013] EWHC 1954 (Fam)
The husband deliberately failed to disclose offshore assets; the court ordered him to pay 100% of the wife’s legal costs, calling it “blatant litigation misconduct”.
Typical Consequences:
- Costs orders (partial or full);
- Inferences drawn against the dishonest party (e.g. assuming hidden assets);
- Adverse credibility findings affecting the final split.
3. Extreme Personal Conduct (Very Rare)
In truly exceptional cases of personal violence or criminality, the court may adjust the division for fairness — but this is extremely rare.
Example:
H v H (2005) – husband tried to murder wife. The court awarded her almost the entire asset base, saying it would be inequitable to disregard his conduct.