I am often asked whether a spouse will be financially penalised for their behaviour within a marriage. The answer, like many areas of law, will depend on the individual case and the court’s judgement.
If a divorce is based on the spouse’s adultery or unreasonable behaviour, a costs claim can be made for the errant spouse to bear some or all of the costs of the divorce proceedings. However, the divorce costs order only encompasses the steps needed to bring the marriage to an end. It does not encompass the additional costs of resolving financial issues.
Securing a costs order within financial proceedings is a different proposition.
What conduct will the court look at when considering a costs order within financial proceedings?
Bad conduct will only be taken into account if it is ‘obvious and gross’. There are two considerations, namely would it be inequitable for the court to disregard it, and what effect (if any) should the conduct have on the final order?
It’s helpful to look at previous cases to get a flavour of the conduct the court considers relevant when making judgements on cost orders. In H v H  1 FLR 990 the husband was convicted for the attempted murder of the wife, resulting in the wife being awarded the family home and the bulk of the assets. In Kyte v Kyte  3 All ER 1041 the wife conspired with her mentally ill husband’s suicide attempts with a view to securing financial gain for herself. Her share was reduced as a result. We can see from these cases that an individual’s behaviour has to be fairly extreme to warrant financial penalty.
The courts will also look to financial conduct. Where a party has recklessly dissipated assets such that the available funds are now depleted, the court can look to ‘add back’ or adjust the shares to recompense the innocent party where there are sufficient resources to do this.
Where a spouse has been wilfully uncooperative with the financial process or evasive with disclosure resulting in unnecessary legal costs being incurred, a costs order can be made against them.
If satisfied a party has been dishonest about their true wealth, judges can make an order based on what they surmise the true asset position to be.
If fraud comes to light after the final order has been made, such that a different order would have been made had the court known the true picture, it is possible to apply to have the order set aside.
At various stages of the divorce process each party will be required to confirm that the statements and figures provided are true. Dishonesty within court proceedings can be punished as perjury, with imprisonment potentially the ultimate sanction.
For more information on conduct and resolving financial issues during divorce proceedings, please contact Anita Scorah in our Family Law team on 01625 442123.