Can personal conduct change a financial remedy outcome?

When a couple divorces, the court’s role is to reach a fair financial outcome. To do this, judges apply the factors set out in Section 25 of the Matrimonial Causes Act 1973. One such factor is personal conduct.

Personal conduct is only considered in limited circumstances, typically where the conduct is sufficiently serious and has a clear or identifiable financial consequence. In this blog, Katie Hurst, associate in Lodders’ experienced Family Law team, explains when personal conduct may affect the outcome of financial remedy proceedings, and when it is unlikely to do so.

What does the court mean by “personal conduct”?

Legal practitioners and judges consider the various factors in Section 25 when deciding how finances should be divided following a divorce. One of the lesser-known factors is:

“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.”

While this wording suggests conduct can be relevant, the threshold has been set exceptionally high historically. Case law has described the relevant conduct as needing to be “gross and obvious”, and so serious that it would be “inequitable to disregard” it.

The legal test

The two-stage approach that the court takes when a party wishes to raise conduct was set out in Tsvetkov v Khayrova [2023] EWFC 130:

Stage one

The party asserting conduct must establish:

• What actually happened — the facts relied upon
• That those facts meet the high conduct threshold set by the case law
• That the conduct caused a negative financial impact, even if it cannot be precisely measured. A direct link must be shown between the act or omission and the financial loss.

Stage two

If stage one is established, the court will then decide what (if any) impact the misconduct and its financial consequences should have on the outcome, alongside the other Section 25 factors.

In practice, this high threshold means practitioners often must advise that, even where one party alleges inappropriate behaviour within the relationship, the court is unlikely to take that conduct into account when determining the division of finances, unless the legal test can be met.

Is the court’s approach changing?

Two recent judgments, both given by the same judge, have led some commentators suggest there may be a ‘softening’ in how conduct is approached in financial remedy proceedings.

The emphasis appears to be on a more discretionary, fact-sensitive assessment, with conduct being considered as part of the overall evaluation of fairness. That said, the established high threshold remains the starting point.

This debate is particularly relevant in cases involving domestic abuse. A paper published by Resolution in October 2024, titled “Domestic abuse in financial remedy settlements”, reported that around 80% of professionals surveyed believed domestic abuse was not being adequately reflected in financial outcomes.

Practical guidance

If you believe conduct should be taken into account in financial remedy proceedings, it is important to get legal advice at an early stage.

The court expects conduct arguments to be identified early so they can be properly case‑managed. A family law practitioner can help by:

• Identifying which category of conduct is being alleged and establishing the strength of the factual case
• Focusing on whether there is an identifiable financial impact and what evidence is available to support this
• Consider proportionality and costs risk – pursuing conduct arguments can increase time, expense and conflict if the threshold is unlikely to be met.

A family lawyer can also give frank advice about whether a conduct claim is realistic. Raising conduct where it should not have been pursued may lead to adverse consequences later in the proceedings (including in relation to costs).

Ultimately, while personal conduct can be relevant in financial remedy cases, the threshold remains high, and the court has discretion as to how it will be considered and managed throughout the case. It is vital that any potential allegations of conduct are discussed with a legal practitioner at any early stage prior to the issue of financial proceedings.

How Lodders can help

For anyone considering raising allegations of conduct, early advice is essential. Speaking to a specialist family lawyer before financial proceedings begin can help ensure the right issues are identified, managed proportionately, and approached with a clear understanding of both the legal and practical risks.

Navigating financial remedy proceedings can be daunting. Our family law specialists can guide you through the process, provide expert advice, and help you achieve the best financial settlement.

For help and advice, get in touch with our friendly team today.