Section 25 Conduct Argument

Part of: Financial Settlement after Divorce

Understanding when a Section 25 conduct argument might affect your financial settlement requires careful consideration of the legal threshold. During a marriage or separation, one spouse may behave in ways that seem profoundly unfair – yet most behaviour won’t influence how courts divide assets. Only conduct that meets the demanding standard of being “inequitable to disregard” will be considered. Our family law experts regularly advise clients on whether their circumstances warrant raising conduct issues and the implications of doing so.

What are Section 25 factors in a conduct argument?  

What is a section 25 conduct argument?

One of the factors which the court considers is the conduct of the parties involved in the proceedings. The courts will consider the conduct providing it is serious. For the courts to take a parties’ conduct into account the conduct must be inequitable to disregard.

The courts will only take a parties’ conduct into account if the conduct is obvious and significant. Simply relying on the grounds of adultery or unreasonable behaviour does not amount to conduct which may be likely to affect the split of the finances and assets. If a section 25 conduct argument is bought successfully, this can affect dividing assets and may result in an unequal split.

The Four Categories of Conduct in Financial Remedy Proceedings

Understanding the four distinct categories where a section 25 conduct argument may arise helps determine whether your circumstances warrant pursuing conduct allegations. As established in OG v AG [2020] EWFC 52 and refined in Tsvetkov v Khayrova [2023] EWFC 130, these categories are:

The first category involves gross and obvious personal misconduct between the parties, typically during the marriage. This conduct must be exceptional and have financial consequences to constitute conduct inequitable to disregard. Courts require behaviour that genuinely shocks the conscience, often described as requiring a gasp factor rather than merely a gulp.

The second category concerns add-back claim divorce UK situations where one party has wantonly and recklessly dissipated assets that would otherwise form part of the matrimonial pot. Courts require evidence of wanton dissipation of assets divorce showing deliberate or reckless behaviour rather than simply unwise financial management.

The third category addresses litigation misconduct where parties fail to comply with court rules, provide deficient disclosure, or conduct proceedings unreasonably. Courts typically address this through costs orders rather than adjusting the substantive division of assets.

The fourth category involves drawing adverse inferences from a party’s failure to provide full and frank disclosure. Where evidence suggests hidden assets exist, courts may infer their existence and factor this into their calculations.

How is a section 25 conduct argument raised within the matrimonial and financial proceedings?

The starting point to raise a conduct argument under Section 25 of the Matrimonial Causes Act is by listing this within the financial exchange form. This is known as the Form E. You enter conduct information in section 4.4 of Form E. The Section specifically states “Bad behaviour or conduct by the other party will only be considered in very exceptional circumstances when deciding how assets should be shared after divorce/dissolution. If you feel it should be considered in your case, identify the nature of the behaviour or conduct below”.

What types of conduct are inequitable to disregard in financial remedy proceedings?

The courts will generally take into consideration 2 types of conduct when looking at a section 25 conduct argument. These are personal misconduct and financial misconduct. Physical conduct relates to bad behaviour committed by the other spouse. This is usually what separating couples rely on when considering a divorce or separation. Physical conduct most commonly falls into the ambit of divorce or separation on the grounds of unreasonable behaviour of adultery. It must be noted that physical conduct or misconduct very rarely impacts a financial settlement or division of the assets. For certain behaviour to be considered to be amounting to serious conduct it must directly impact how a court should divide the finances assets. Despite this there is no guarantee that the court will reduce a parties’ financial settlement for such behaviour.

A common section 25 conduct argument under physical misconduct is usually domestic violence. Where violence has been committed against one party the courts may take this into account where the violence affects the parties’ financial position. An example of this is where due to the domestic violence one party is unable to obtain an employment and have or are likely to suffer financially.

What happens where a conduct is inequitable to disregard?

In cases where conduct has been established the courts can reduce one parties financial entitlement. An example of this can be seen in the case of H v H (Financial Relief: Attempted Murder as Conduct) [2005] EWHC 2911. In this case the husband had attacked his wife with a knife and caused serious knife injuries. A tape recording of the incident supported the wife’s account. The wife was formerly a police officer and had been unable to work as a result of this incident and the husband’s behaviour. The husband was sentenced to 12 years in prison for attempting to murder his wife in the matrimonial home in front of the young children.

Whilst serving his sentence the husband was refusing to consent to the sale of the matrimonial home or for it to be let out. The courts concluded that this was not merely a conduct argument for which it would be inequitable to disregard under s.25 of the Matrimonial Causes Act 1973 but was conduct at the very top end of the scale. The court decided that it must place the wife’s needs much higher than those of the husband. This is an example of a physical misconduct which the court considered when considering a financial settlement and a division of assets given that the husbands conduct, and behaviour was so serious it affected the wife’s earning capacity.

Financial misconduct in cases of ancillary relief

Financial misconduct under a section 25 conduct argument is usually relied on where one partner recklessly or intentionally dissipates assets prior to the financial proceedings. In effect one partner is to try and reduce the amount of finances and assets which are available for division. In such cases the courts have the power to add the finances or the assets back into the matrimonial pot as if the party still had these assets. The court will require any financial conduct to have taken place deliberately or recklessly. This will usually include cases where there has been excessive spending or behaviours such as gambling or dissipating assets.

Purpose of the court is not to punish 

It is however important to note that the aim of the court is not to punish one party for their conduct during the marriage or for the reason of their divorce or separation. Instead, the court aims to reach a fair outcome and, where possible, a clean break, ensuring the financial and matrimonial assets are divided reasonably rather than using the process to punish past behaviour. The courts encourage the separating couple to focus on making sure they can proceed with their life and meet their future needs in terms of their finances rather than punishing someone for what has taken place in the past.

Recent developments in conduct and financial remedy proceedings

Case law continues evolving how courts approach conduct arguments. Several recent decisions provide important guidance for anyone considering raising conduct issues.

In OG v AG [2020] EWFC 52, Mr Justice Mostyn established four distinct categories where a section 25 conduct argument becomes relevant: gross and obvious personal misconduct with financial consequences, add-back claims for wanton dissipation of assets divorce, litigation misconduct addressed through costs orders, and drawing adverse inferences from non-disclosure. His observation that the financial remedy court is no longer a court of morals reinforces that conduct inequitable to disregard requires financially measurable consequences rather than moral judgments about behaviour.

This reinforces that pursuing conduct arguments without clear financial consequences rarely succeeds.

The landmark decision in Tsvetkov v Khayrova [2023] EWFC 130 established essential procedural requirements for raising a section 25 conduct argument. Any party wishing to rely on conduct must make their allegations clear at the earliest opportunity, typically in Form E section 4.4. The allegations must identify specific behaviour, explain why this meets the legal threshold, and outline the financial impact caused. Introducing new conduct allegations at final hearing without prior notice will be disregarded by the court.

DH v RH [2024] EWFC 114 demonstrated that an add-back claim divorce UK can succeed where litigation spending itself constitutes wanton dissipation of assets divorce. In this case, the wife had incurred £1.9 million in legal costs pursuing unsuccessful claims about hidden assets, while the husband’s costs totalled approximately £1 million. The court added back £800,000 to reflect the unfairness arising from the wife’s reckless expenditure on legal costs, finding this was separate from any costs order and addressed the reduction in assets available for distribution.

N v J [2024] EWFC 184 provides the most recent authoritative guidance on conduct and domestic abuse in financial remedy proceedings. Mr Justice Peel, as Lead Judge of the Financial Remedies Court, confirmed that while domestic abuse is indubitably vile and indefensible, this does not lower the threshold for conduct inequitable to disregard. The high bar established by case law remains undisturbed by the increased focus on domestic abuse in society and the family justice system. Cases where conduct is taken into account without a financial consequence will be vanishingly rare, with the case law militating firmly in favour of financial consequences being a necessary ingredient in successful section 25 conduct argument cases.

These developments emphasise the importance of professional advice before raising conduct arguments. Our family lawyers stay current with evolving case law to provide accurate guidance on your prospects.

What options does the courts have when a conduct has been established?

The general options the court consider when a section 25 argument has been successfully been found is to consider the adding back position. This is where the courts would add back the finances or the assets as if they hadn’t been spent or dissipated. This would mean the value of the assets or finances which are no longer available would be added back and divided by the courts.

An example of the courts approach can be seen in the case of MAP v MFP 2015. The case involved a husband who was a managing director and a 95% shareholder of a successful family property development company. The wife was the company secretary and finance director as well as owning the remaining 5% of the shares. The parties remained married for 40 years. The husband had serious cocaine and alcohol addiction problems. The husband spent approximately £230,000.00 on unsuccessful rehabilitation treatment. And continued spending £6,000.00 per week on his drugs and alcohol. Whilst the husband was away the wife continued to work and discovered the husband had been involved with prostitutes.

The courts considered the add-back argument and whether they should add on the amount of money the husband spent on his drugs and alcohol addiction, treatment and prostitutes. The courts stated they must be satisfied that there had been “wanton dissipation of assets”, when deciding the case that the husband had significantly overspent. However, the courts did not find that the husband overspent to reduce his wife’s claim. The husband overspent because of his addiction which he could not prevent. This was down to the husbands flawed character. The court could not add-back items of expenditure which the wife was hoping to be added back to increase her financial claim. The court made no adjustment to the financial award based on the husband’s conduct.

How to defend a section 25 conduct argument?

If you face financial remedy proceedings, identify early whether conduct issues might arise. Early identification is critical to ensure you are adequately prepared for what is likely to come your way. If you believe you may be subject to a conduct argument you may need to seek legal advice and assistance. At Kabir Family Law, our family lawyers have vast amounts of experience of dealing with all types of family financial claims.

We can assist you in preparing a statement to the family court which will assist you in highlighting how your conduct is not significant and may not warrant an adjustment in a financial settlement or a division of assets. You must be able to prove to the court that your conduct was not reckless or intentionally to affect the financial claim.

In order to defend a conduct argument, you will also need to provide evidence to support that your behaviour did not amount to poor conduct and that your behaviour was not carried out in a way to reduce the other parties claim. Without being able to show your conduct was not directly related to the financial settlement you will struggle to defend the conduct argument.

Common questions about conduct arguments under section 25

What happens in a case of litigation misconduct?

Where one party conducts themselves badly within the litigation process itself the court can impose cost orders on the relevant party. This usually occurs when one party fails to comply with court rules and orders without any valid reason. Such misconduct is dealt with by way of an order from the court rather than the family court making an adjustment to the financial settlement or division of assets.

What does “conduct inequitable to disregard” mean in divorce financial settlements?

The phrase conduct inequitable to disregard represents the legal threshold courts apply when deciding whether behaviour should influence how assets are divided. Under Section 25(2)(g) of the Matrimonial Causes Act 1973, family courts will only consider conduct when ignoring it would be fundamentally unfair to one party.

This threshold is deliberately high. Judges have described it as requiring a “gasp factor” rather than merely a “gulp” – meaning the behaviour must genuinely shock the conscience of the court. Day-to-day grievances, relationship difficulties, or even adultery typically fall short of conduct inequitable to disregard. Our family law specialists can assess whether your circumstances might meet this demanding standard, as each case depends entirely on its specific facts.

The test applies to both financial misconduct divorce settlement disputes and cases involving serious personal conduct. Understanding whether behaviour crosses this threshold requires careful analysis of how courts have interpreted conduct inequitable to disregard in comparable situations.

How do I raise financial misconduct in my Form E section 4.4?

When financial remedy proceedings commence, you must complete Form E – the standard financial disclosure document. Section 4.4 of Form E specifically addresses conduct, stating that “bad behaviour or conduct by the other party will only be taken into account in very exceptional circumstances.”

To properly raise financial misconduct divorce settlement concerns in your Form E section 4.4, you should clearly identify the specific behaviour, explain why this meets the legal threshold, and outline the financial impact caused. Courts have warned against vague allegations or simply “reserving your position” on conduct without specifics.

In Tsvetkov v Khayrova (2023), the judge strongly criticised parties who fill Form E section 4.4 with prejudicial comments that don’t approach the required threshold. This practice increases costs and raises tensions unnecessarily. Our family lawyers can advise whether your concerns warrant inclusion in Form E section 4.4 and help you present allegations appropriately if they do.

Raising conduct allegations carries risks – if unsuccessful, you may face adverse cost orders. Professional guidance ensures you understand both the potential benefits and consequences before completing this critical section.

What is an add-back claim in divorce and when does it succeed?

An add-back claim divorce UK proceedings allow courts to notionally restore assets to the matrimonial pot that one spouse has improperly dissipated. Rather than creating money from nothing, the court adjusts the division to account for what was lost – effectively reducing the share of the spouse responsible for the loss.

For an add-back claim divorce UK courts require evidence of wanton dissipation of assets divorce. This means proving the spending was deliberate or reckless, not simply unwise. The dissipation must be substantial enough to materially affect the asset division, and the behaviour must typically represent a departure from how funds were managed during the marriage.

Successful add-back claim divorce UK examples include situations where a spouse gambled away significant sums after separation, transferred assets to defeat financial claims, or incurred excessive legal costs through unreasonable litigation conduct. In DH v RH (2024), the court added back £800,000 to reflect unfairness caused by one party’s reckless legal spending.

However, courts exercise considerable caution with add-back claims. Your family law specialists can evaluate whether your circumstances support such a claim or whether alternative remedies might prove more effective.

Can wanton dissipation of assets affect my divorce settlement?

Wanton dissipation of assets divorce proceedings can significantly impact how courts divide matrimonial wealth. When one spouse deliberately or recklessly wastes resources that should have been available for division, courts may adjust the settlement to address this unfairness.

The key word is “wanton” – meaning the dissipation must show deliberate recklessness rather than simply poor financial management. Courts assess whether the spending was frivolous, unusual, and seemingly designed to reduce the other party’s claim. Wanton dissipation of assets divorce cases typically involve gambling losses, unexplained cash withdrawals, transferring property at undervalue to third parties, or deliberately running down business assets.

Following the case of Vaughan v Vaughan (2007), courts require clear evidence that wanton dissipation of assets divorce claims involve a deliberate element. Spending consistent with behaviour throughout the marriage – even if financially unwise – may not qualify. In MAP v MFP (2015), substantial expenditure on drugs and escorts wasn’t considered wanton because it reflected the husband’s longstanding character flaws rather than deliberate attempts to defeat his wife’s claim.

The distinction matters significantly. Our family lawyers regularly advise clients on whether patterns of spending constitute genuine wanton dissipation of assets divorce courts would recognise, or whether pursuing such arguments might prove counterproductive.

Does gambling addiction count as financial misconduct in divorce?

Gambling presents complex questions in financial misconduct divorce settlement disputes. While losing marital funds through gambling can devastate family finances, courts carefully distinguish between addiction-driven behaviour and deliberate attempts to diminish a spouse’s claim.

The landmark case of M v M (2006) established that gambling can constitute relevant conduct for financial misconduct divorce settlement purposes. In that case, the husband continued gambling despite undertaking not to, failed to maintain his wife, and allowed mortgage arrears to accumulate. The court divided assets 62.5/37.5 in the wife’s favour.

However, MAP v MFP (2015) introduced an important limitation. There, expenditure driven by addiction was not added back because it reflected a “flawed character” rather than deliberate misconduct. The judge noted that a spouse must accept their partner as they found them – benefiting from their abilities while accepting the consequences of their personality flaws.

Whether gambling constitutes actionable financial misconduct divorce settlement depends on circumstances including whether it began or escalated after separation, whether undertakings were breached, and whether the gambler sought to defeat financial claims. These nuances require careful professional assessment.

What is the difference between personal misconduct and financial misconduct in divorce?

Understanding this distinction proves essential when considering whether conduct inequitable to disregard might apply to your situation. Courts treat these categories differently, with financial misconduct generally easier to establish as relevant to asset division.

Personal misconduct involves behaviour like domestic violence, serious criminal conduct, or other harmful actions against a spouse. For personal conduct to constitute conduct inequitable to disregard, it typically requires extreme circumstances – attempted murder, serious assault, or behaviour causing lasting injury that affects earning capacity. Cases successfully establishing personal misconduct include violent attacks leaving victims unable to work and criminal conduct such as sexual abuse of family members.

Financial misconduct focuses on behaviour directly affecting marital wealth – gambling, hiding assets, failing to disclose income, or deliberately wasting resources. Courts find financial misconduct easier to address because the impact is financially measurable. This aligns with judicial comments that conduct should only be taken into account “where its impact is financially measurable.”

In practice, financial misconduct appears more frequently in successful conduct arguments because courts can calculate appropriate adjustments. Personal misconduct, unless it produces clear financial consequences, rarely crosses the threshold of conduct inequitable to disregard. Our family law experts can advise which category your concerns fall within and whether proceeding with conduct allegations serves your interests.

How do courts decide if conduct is “gross and obvious” in financial remedy cases?

The “gross and obvious” standard derives from Miller v Miller (2006), where the House of Lords confirmed this threshold applies to conduct arguments in financial remedy proceedings. Meeting this standard requires behaviour significantly beyond normal marital disputes or relationship breakdown.

Courts assess whether conduct inequitable to disregard has occurred by examining several factors: the severity of the behaviour, its impact on the other party, whether consequences are financially measurable, and whether addressing it proportionately serves justice. The behaviour must stand out as exceptional rather than representing unfortunate but common relationship difficulties.

Recent guidance from Tsvetkov v Khayrova (2023) established a two-stage process. First, the party alleging conduct must prove the factual allegations. Second, they must demonstrate those facts meet the conduct threshold – consistently described as high or exceptional. Simply showing behaviour was unpleasant, hurtful, or even morally wrong falls short of conduct inequitable to disregard unless additional factors elevate it.

Judges have emphasised that family courts are not “courts of morals” – they focus on practical financial outcomes rather than punishing wrongdoing. This approach means even serious relationship breaches like affairs typically don’t affect settlements unless accompanied by financial misconduct. Understanding this judicial philosophy helps set realistic expectations about conduct arguments.

Can litigation misconduct affect my divorce financial settlement?

Litigation misconduct occurs when a party conducts themselves badly within court proceedings and can lead to significant financial consequences. Unlike conduct during the marriage, litigation misconduct is addressed primarily through cost orders rather than adjustments to asset division.

Common examples include failing to comply with court directions, pursuing unreasonable applications, refusing to negotiate properly, making baseless allegations, or causing unnecessary delay. In AA v AB (2021), the court ordered costs payment even where this caused hardship, emphasising that litigation misconduct has consequences regardless of asset levels.

The introduction of paragraph 4.4 of Practice Direction 28A strengthened consequences for refusing to negotiate reasonably. Courts may conclude that unreasonable litigation conduct warrants cost orders, particularly where parties ignore sensible settlement opportunities. In MB v EB (2019), disproportionate litigation costs of £1.25 million led to one party bearing more costs from their needs-based award.

Perhaps most significantly, excessive legal spending can itself constitute financial misconduct. In DH v RH (2024), an add-back claim divorce UK succeeded where one spouse’s legal costs of £1.9 million were deemed “unrestrained, unfocused and ultimately reckless.” This demonstrates that wanton dissipation of assets divorce proceedings can include litigation behaviour itself.

What evidence do I need to prove financial misconduct in divorce?

Successfully establishing financial misconduct divorce settlement claims requires comprehensive documentation showing both the behaviour and its financial impact. Courts expect clear, specific evidence rather than general accusations or suspicions.

Essential evidence typically includes bank statements showing unusual withdrawals or transfers, credit card records revealing excessive spending, correspondence demonstrating intent to defeat claims, business accounts showing asset stripping or unusual transactions, and expert reports where necessary to trace dissipated funds. For complex situations involving hidden assets or overseas transfers, forensic accountants may need instructing.

When completing Form E section 4.4, you should identify precisely what conduct occurred, when it happened, and what financial consequences resulted. Vague allegations harm credibility and may attract cost sanctions. Recent case law emphasises that conduct allegations require detailed pleading at the earliest opportunity so the accused party knows what case they must answer.

Timing matters significantly. Allegations should typically be raised in Form E section 4.4 rather than introduced late in proceedings. Gathering evidence early – before it disappears or becomes harder to obtain – proves crucial. Our family lawyers can advise on evidence requirements and help ensure allegations are properly documented and presented.

Does domestic violence affect financial settlement in divorce proceedings?

Domestic violence can affect financial settlements, but only where it produces measurable financial consequences. Courts assess whether such conduct meets the threshold of conduct inequitable to disregard based on its impact rather than its moral severity.

The leading case remains H v H (2005), where a husband’s attempted murder of his wife – stabbing her in front of their children – constituted conduct “at the very top of the scale.” Crucially, the violence left the wife unable to work, directly affecting her financial position. The court prioritised her needs significantly over his.

However, most domestic abuse cases don’t reach this extreme. Recent guidance in N v J (2024) confirmed that increased societal focus on domestic abuse doesn’t lower the high threshold for conduct claims. Courts still require financial consequences – for example, violence causing inability to work, psychological harm requiring expensive treatment, or abuse preventing career development.

Economic abuse under the Domestic Abuse Act 2021 provides another avenue. In DP v EP (2023), a wife who deliberately concealed financial transactions from her illiterate husband was found to have committed economic abuse and conduct inequitable to disregard, resulting in a 53:47 split favouring the husband.

Where domestic violence has affected your earning capacity, housing needs, or financial independence, our family law specialists can advise whether this strengthens your financial remedy claim.

What happens if my spouse hides assets during divorce proceedings?

Hidden assets represent serious financial misconduct divorce settlement courts take extremely seriously. Full and frank disclosure is mandatory in financial remedy proceedings, and deliberate concealment can result in severe consequences.

When assets are hidden, courts have several powers. They can draw adverse inferences – essentially assuming undisclosed assets exist and factoring this into division. They can order disclosure of documents, appoint forensic accountants to investigate, or adjourn proceedings while investigations continue. In serious cases, contempt proceedings may follow.

If hidden assets emerge after a financial order is made, that order can potentially be set aside. This leaves both parties exposed to further litigation and uncertainty. Courts view non-disclosure as undermining the entire system of fair financial resolution.

The threshold for proving non-disclosure connects to conduct inequitable to disregard. In Tsvetkov v Khayrova (2023), the court emphasised that parties must plead conduct allegations specifically, including what assets were allegedly hidden and how this affected outcomes. Suspicions alone don’t suffice – some evidence of concealment must exist.

Freezing injunctions can prevent further dissipation while investigations proceed. Acting quickly when you suspect asset-hiding proves crucial. Our family lawyers can advise on protective measures and investigation strategies appropriate to your circumstances.

Can excessive legal costs be considered financial misconduct?

Excessive legal costs can indeed constitute wanton dissipation of assets divorce courts will address. When one party’s litigation spending is unrestrained, unfocused, and ultimately reckless, courts may add back amounts to reflect the unfairness of reduced assets.

The significant case of DH v RH (2024) demonstrates this principle clearly. The wife had spent £1.9 million on legal fees, the husband £987,000. The court found the wife’s spending constituted reckless expenditure and added back £800,000 to her side of the asset schedule. This ensured the husband wasn’t disadvantaged by her disproportionate litigation approach.

This principle reinforces that wanton dissipation of assets divorce claims aren’t limited to gambling or luxury spending. Any reckless depletion of the matrimonial pot – including through unreasonable legal strategies – can trigger court intervention. Pursuing hopeless applications, refusing reasonable settlements, and instructing armies of experts unnecessarily all risk being characterised as financial misconduct.

Controlling legal costs serves everyone’s interests. The matrimonial pot exists to meet both parties’ future needs, not to fund disproportionate litigation. Our family law specialists focus on efficient resolution strategies that protect your interests without unnecessarily depleting resources.

When will courts refuse an add-back claim in divorce?

Understanding when courts refuse add-back claims proves as important as knowing when they succeed. Several circumstances consistently lead to rejection of these arguments.

Courts refuse add-back claim divorce UK applications where spending reflects longstanding character traits rather than deliberate misconduct. The MAP v MFP (2015) decision established that you must “take your partner as you find them” – meaning behaviour consistent with how they acted throughout the marriage doesn’t warrant add-back, however financially damaging.

Claims also fail where dissipation relates to reasonable needs. Spending on housing, necessary living expenses, or children’s welfare – even if substantial – won’t be added back simply because one party disagrees with the amounts. Similarly, gifts to family members made within the context of normal generosity during the marriage typically don’t qualify.

An add-back claim divorce UK requires proving the spending was intended to defeat claims or was so reckless it amounts to the same thing. Mere extravagance, poor financial judgment, or different spending priorities don’t suffice. Courts also consider proportionality – pursuing add-back claims for relatively modest sums in high-value cases may prove disproportionate to the legal costs incurred.

Our family lawyers carefully assess whether add-back arguments have realistic prospects before recommending this course. Pursuing weak claims wastes costs and may attract criticism for litigation misconduct.

How does economic abuse affect financial needs in divorce financial settlements?

Economic abuse represents a specific category of conduct recognised under the Domestic Abuse Act 2021, defined as behaviour having a substantial adverse effect on someone’s ability to acquire, use, or maintain money or other property. The case of DP v EP [2023] EWFC 6 established that economic abuse can amount to conduct inequitable to disregard where it has the requisite financial impact. The husband was functionally illiterate and had trusted his wife to manage their joint finances throughout their lengthy marriage.

The court found the wife had exploited her dominant position by buying and selling assets while deliberately concealing her actions. This financial misconduct divorce settlement resulted in a 53:47 split favouring the husband, with additional sums added back to reflect misappropriated funds. Her Honour Judge Reardon emphasised that while not all economic abuse will meet the threshold, cases involving deliberate exploitation of vulnerability over a sustained period may qualify as conduct inequitable to disregard..

Economic abuse can take many forms: controlling access to bank accounts, running up debts in a partner’s name, preventing employment or education, destroying property, or making major financial decisions without consultation. Where such behaviour has clear financial consequences, it strengthens conduct arguments.

The growing recognition of economic abuse provides an important avenue for victims who may not have experienced physical violence but suffered severe financial control. Our family lawyers understand how to present economic abuse evidence effectively within financial remedy proceedings.

Can addiction be used as a defence against financial misconduct claims?

Addiction can provide a defence against financial misconduct divorce settlement claims, though courts assess each case individually. The key question is whether expenditure resulted from a condition beyond the person’s control or represented deliberate attempts to defeat financial claims.

MAP v MFP (2015) provides the leading authority. Despite expenditure of approximately £6,000 weekly on cocaine and escorts, the court declined to add back these sums because the behaviour stemmed from addiction rather than deliberate misconduct. The judge noted it would be “wrong to allow the wife to take advantage of the husband’s great abilities” while not accepting “the financial hit from his personality flaw.”

However, addiction doesn’t provide an automatic defence. In M v M (2006), gambling losses were addressed despite addictive elements because the husband breached undertakings not to gamble and failed to maintain his family. Courts distinguish between pre-existing conditions and behaviour that escalates deliberately after separation.

Whether addiction provides a defence depends on factors including when the condition developed, whether treatment was sought, whether undertakings were given and breached, and whether the spending appears designed to defeat claims rather than satisfy compulsions. These nuanced assessments require professional analysis of your specific circumstances.

Resolution Report and Future Developments

The approach to conduct in financial remedy proceedings continues evolving. In October 2024, Resolution published its report revealing approximately 80% of family law professionals believe domestic abuse is not sufficiently considered when courts determine financial settlements.

However, changes must balance protecting victims with maintaining proportionate court processes. Until legislative reform occurs, the threshold for conduct inequitable to disregard remains as established in current case law, with financial consequences essential in virtually all successful claims. Our family lawyers stay current with developing case law to provide accurate guidance on your prospects.

Contact Kabir Family today for an initial telephone consultation 

At Kabir Family Law we deal with all types of family and financial settlement matters. Should you be involved in financial proceedings and would like to raise the conduct of your former partner or should you have a conduct argument raised against you, we can assist you and provide you with more advice and information. Contact us today on 0330 094 5880 to discuss your options to discuss your options or let us call you back. You can otherwise book a time that suits you.

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