Resolution’s report on domestic abuse in financial remedy proceedings

The need for courts to consider domestic abuse (including economic abuse) within private child law proceedings is entrenched within both case law and statue. In particular, the terms of Practice Direction 12J (PD12J) make it clear that the issue of domestic abuse must be considered at every hearing and that where findings of domestic abuse are made, any child arrangements order must take those findings into account. 

The question of how domestic abuse is (and should be) treated within financial remedy proceedings is much more problematic and is the subject of the Resolution report on domestic abuse in financial remedy proceedings, published on 8 October 2024. 

The situation

The need for such a report is, in my view, clear. As a practitioner within private child law and financial remedy proceedings, I have had many clients express confusion and frustration at the inconsistent manner in which issues of domestic abuse are treated within the two types of proceedings. The question is often asked of me (not unreasonably) ‘why is a finding of domestic abuse relevant to the time a child spends with a parent, but not to the distribution of their assets?’ My experience seems to be a common one: Resolution found that around 80% of professionals consider that domestic abuse, and specifically financial abuse, is not taken sufficiently into account in financial remedy proceedings. 

The reason for this is clear: the judicial interpretation of section 25(2)(g) of the Matrimonial Causes Act 1973 (MCA). That section provides that the court will have regard to ‘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’. Domestic abuse falls into the first of four categories of conduct identified by Mostyn J in OG v AG (Financial Remedies: Conduct) [2021] 1 FLR 1105 at [34], namely the “gross and obvious personal misconduct meted out by one party against the other, normally, but not necessarily, during the marriage.” 

The issue of conduct has been considered by Peel J, the National Lead Judge of the Financial Remedies Court twice in the last year, namely in Tsvetkov v Khayrova [2024] 1 FLR 937 and N v J [2024] EWFC 184. In both cases, Peel J restates that in order to be a relevant consideration in a financial remedies application, the conduct complained of must be at a “high or exceptional level” and have “an identifiable (even if not always easily measurable) negative financial impact” caused by the act/omission. It is noteworthy that neither such requirement is in fact included in s25(2)(g). 

Nevertheless, that requirement for both ‘exceptionality’ and a causative financial impact of the abuse means that, in my professional experience, domestic abuse is frequently raised by clients, but very rarely litigated. Indeed, the restrictive interpretation of s25(2)(g) means that ‘conduct’ is often specifically excluded from consideration at the very outset of proceedings. 

It is also my repeated experience that the very process of litigation within financial remedy proceedings can amount to a continuation of post-separation abuse. This issue was also highlighted in the Resolution report, which concluded that there needs to be a cultural shift to stop domestic abuse continuing during court proceedings.

The report

Having identified key issues, the Resolution report calls for a cultural shift that would result in all family justice professionals being better able to meet the needs of victim/survivors of domestic abuse seeking the resolution of finances on divorce. The report makes specific recommendations for legal and procedural reform to create such a cultural shift, including:

• An amendment to the overriding objective in the Family Procedure Rules 2010, so that dealing with a case ‘justly’ in r1.1(2) includes ‘ensuring the parties are safeguarded from domestic abuse’;

• Whether the court’s case management powers can be better used where a party fails to provide full and frank disclosure pre-proceedings or in non-court dispute resolution (NCDR);

• Consideration of the need for a review of the law and procedure relating to interim financial remedies, to help ensure that victim/survivors are financially supported between the time of separation, and the final outcome of a financial remedies application;

• A review of the legislation relating to Legal Services Payment Orders (LSPOs) to recognise that post-separation economic abuse may obstruct a victim/survivor from accessing resources to instruct a lawyer to help resolve their finances post-separation.

However, the report does not go as far to address the thorny issue of how a successful conduct argument would impact an overall award. Should, for example, there be penalties akin to awards in personal injury claims? Or should an award be based on ‘needs’ generated by the conduct? 

Conclusion

The report and its recommendations are nevertheless welcome and important and should represent required reading for all financial remedy practitioners. Resolution shares my own view that the current approach of the courts to s25(2)(g) leads to unfair outcomes for some victim/survivors of domestic abuse. Resolution feel unable to offer a solution to resolve this fundamental problem, but have committed to continuing to consider the issue, noting that the Law Commission is considering whether reform to the MCA is required and that the Australian Federal Government is consulting on a proposed amendment to legislation that would see family violence taken into account if separating couples’ property is divided and maintenance is awarded. 

For my part, an equivalent amendment to the MCA or a change in the interpretation of s25(2)(g) is long overdue and would go some way to addressing the problematic approach of the courts to the issue of domestic abuse within financial remedy proceedings. The spectre of ‘floodgates’ of additional litigation has been posited as a reason why such reforms should not be implemented. This appears, primarily, to be a resources-based argument. Looked at another way, the need for domestic and economic abuse to be considered as a species of ‘conduct’ in a significant number of cases is indicative of the extent to which the issue is currently being overlooked by the courts.