To what extent does the recent case of DP v EP (Conduct; Economic Abuse; Needs) [2023] EWFC 6 assist us when arguing for a departure from equality because of financial abuse and behaviour.


The Domestic Abuse Act 2021 [S1(4)] clarified the definition of financial abuse within intimate relationships by creating a novel statutory category of domestic abuse:

ECONOMIC ABUSE: is now defined in statute as ‘any behaviour that has a substantial adverse effect on B’s ability to (a) acquire, use or maintain money or other property, or (b) obtain goods or services’.

Of course, the Matrimonial Causes Act 1973 [S25] sets out those matters to which the Court shall in particular have regard to when exercising its redistributive powers between parties to a Financial Remedy application and of particular relevance here is S25 (g): 

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.”

The very wording of the statute makes plain that there is a threshold to be reached in terms of what conduct (or bad behaviour) would be relevant here. The vast majority of what has been referred to as ‘the ordinary run of fighting and quarrelling in an unhappy marriage’ [Hall 1984 FLR 631] is completely irrelevant. Personal misconduct is rare: the Court is looking for a ‘gasp factor’ [S v S (Non-Matrimonial Property: Conduct) [2006] EWHC 2793].

An example of the type of bad behaviour which a Court could justifiably find ‘inequitable to disregard’ is when one party to a marriage has been found guilty of criminal offences of sexual assault of the other party’s family members [as was the husband in K v L [2010] EWCA Civ 125 to the wife’s grandchildren].

Although in OG v AG (Financial Remedies: Conduct) [2021] 1 FLR 1105, Mostyn J indicated that in his view even such reprehensible conduct would not be sufficient:

The financial remedy court is no longer a court of morals. Conduct should be taken into account not only where it is inequitable to disregard but only where its impact is financially measurable. It is unprincipled for the court to stick a finger in the air and arbitrarily to fine a party for what it regards as immoral conduct.’ [My underlining]

In stating that any conduct, however horrendous, should be ignored by the Court unless its impact is financially measurable, Mostyn J was taking an independent step towards limiting the reach of MCA, 1973, S25 (g) within Financial Remedy proceedings. 

However, given that Mostyn has now retired from the High Court Bench, perhaps we would be better to note Peel J’s dicta in Tsektov v Kharova [2023] EWFC 130 that in order to be relevant, a party’s [personal mis]conduct should have ‘an identifiable (even if not always easily measurable) negative financial impact’. So, the latest judicial thinking on this subject from the High Court Bench focuses on identifying that there is financial loss caused by the proven bad behaviour, rather than measuring that loss precisely.


DP v EP (Conduct; Economic Abuse; Needs) [2023] EWFC 6

This case involved parties as follows: W (49) was a property consultant and H (60) was a builder. H was functionally illiterate throughout the marriage and trusted W to manage their joint finances on his behalf. Although the marital assets amounted to approximately £1.5 million, as the parties were based in North London, this was treated very much as a ‘needs’ case. H raised conduct allegations against W and HHJ Reardon made significant factual findings of personal misconduct against W:

“Contributions and conduct

144. The parties were in a cohabiting relationship for 25 years. During that time they raised three children. Both have clearly formed and retained strong relationships with their children as adults. Whatever the state of their own emotional relationship, I am satisfied that both made a full contribution to the children’s care and upbringing.

145. In financial terms, however, the parties’ contributions were very different. H made a full financial contribution and his earnings went towards maintaining the family and building up the parties’ capital assets. In contrast, I have found that between 2007 and 2018 W acted at times negligently and in breach of her duty of care to H, and at times fraudulently. While H was working to build up the parties’ joint resources in the expectation that they would have a shared pot to rely on in retirement, W was diverting funds from that pot with the deliberate aim of putting them out of H’s reach.

146. The process of examining these allegations has highlighted patterns of behaviour on W’s part. Over the course of the marriage she bought, sold and attempted to sell substantial assets, while deliberately concealing her actions from H because she knew he would not consent. As I have already observed, the seriousness of her conduct is heightened by the fact that H had trusted her with the entirety of their joint financial resources, in circumstances where his illiteracy meant that he had no way of monitoring her actions.

147. In my view, W’s conduct falls within the definition of economic abuse contained in DAA 2021. In the longer term, if not on a day to day basis, W’s conduct has had a substantial adverse effect on H’s ability to access and use his own money. The most obvious example is the Dubai rent, which H believed for many years to be accumulating in a joint account as a retirement fund. I appreciate that there are some forms of economic abuse, for example those that involve the coercive restriction of the other party’s day-to-day expenditure, that may be more familiar, and therefore more easily recognised as abusive. However W’s conduct in this case involved the exploitation of a dominant position, which is the essence of all forms of abusive behaviour; and the fact that H was unaware of W’s behaviour at the time, and that it did not directly impact on his daily life during the marriage, has only made his subsequent discovery of it more shocking. I am in no doubt that H feels a profound sense of betrayal, and that the harm caused by W’s actions has extended well beyond the financial detriment they have caused.

148. The provisions of DAA 2021 are quite new and their role in financial remedy cases is yet to be established. Undoubtedly not all cases involving economic abuse will have the “gasp factor” required by MCA 1973, s25(g). In concluding that this one does, I draw on my range of experience of the behaviours exhibited by spouses towards each other, within their financial relationships and otherwise. In my view the features which take this case out of the ordinary include H’s illiteracy and W’s exploitation of his consequent vulnerability; the deliberate nature of the deception perpetrated by W; and the fact that the behaviour was sustained over a considerable time period.

149. For these reasons, I consider that W’s conduct as a whole has been such that it would be inequitable to disregard it.”

How did this affect the distribution of assets?

HHJ Reardon considered her findings about W’s conduct at two separate stages:

Computation: after her summary of the assets valued at time of trial but prior to her S25 analysis, the Judge considered whether there should be any adjustment to the Asset Schedule in light of the conduct findings, the burden of proof being on H. She made the following adjustments:

  1. £60,000 which W said she had ‘lost’ to a risky investment at the end of the marriage, but H asserted had merely been diverted, was included as still available to W.
  2. £25,000 rent from a jointly owned property, which had been given to/taken by W’s sister in the year prior to separation was included as still available to W.
  3. £75,000 rent from the same jointly owned property which had been diverted earlier in the relationship was ‘added back’ to W as there was clear evidence of deliberate and wanton dissipation as per Vaughan v Vaughan [2007] EWCA Civ 1085 clarified in MAP v MFP (Financial Remedies: Add-back) [2016] 1 FLR 70], although it was noted that this money was not necessarily presently available to W to meet her needs.

Distribution: then separately and after her S25 analysis, HHJ Reardon considered the overall division of the adjusted Schedule of Assets. She noted that a 50:50 split at this stage (which met both parties’ needs) would be ‘almost inevitable’ after a marriage of this length, if it were not for the W’s proven economic abuse of H and went on to state: 

153. I have already expressed the view, in principle, that W’s conduct in this marriage has been such that it would be inequitable to disregard it; that the “gasp factor” is present. I return to Mostyn J’s observation in OG v AG that in order to sound in the ultimate distribution, s 25(g) conduct must have “financially measurable” consequences. In that case, having addressed those consequences, Mostyn J did not make any further adjustment to the division of assets in response to H’s conduct, because to do so would have penalised him twice for the same behaviour, or as Mostyn J put it, “arbitrarily to fine” him.

154. In this case, my findings in respect of the X Development investment and the Dubai rent have been reflected in the adjusted asset schedule and can play no part in the distribution exercise. However, my findings about W’s conduct go well beyond these two particular instances of it. I have made a general finding of similar behaviour on W’s part over many years that is likely to have depleted the family assets, although it is not possible to quantify the extent of the depletion.

155. In my view, too narrow an interpretation of s 25(g) would render the provision nugatory. It is difficult to imagine a scenario in which consequences which are truly financially measurable have not already been taken into account under either s 25(a) (resources) or s 25(b) (needs). In OG v AG, the husband’s conduct reduced the value of a family asset. In H v H (Financial Relief: Attempted Murder as Conduct) [2006] 1 FLR 990 the husband’s assault on the wife left her unable to work.

156. It seems to me therefore that there must be some scope for conduct which has had consequences to be reflected in the ultimate division of assets, even where those consequences are not financially measurable. In this case, there has been a negative impact on H’s overall financial position, even if it is impossible to determine what that has been.

157. Whether in fact it is fair to make any adjustment from equality, and what weight I ultimately give to s 25(g), will depend on my assessment of the other s 25 factors, in particular needs.

158. It is often observed that needs are “elastic”. The term means different things in different cases. Even if the standard of living during the marriage is used as a benchmark, there may be scope for considerable flexibility in the assessment. Sometimes it is possible to replicate the matrimonial standard of living, but more often it is not. In most cases therefore there is a needs bracket, which starts at a minimal level where extras and luxuries previously enjoyed have to be given up, and extends upwards to the point where it becomes obvious that there is a surplus of resource.

159. Although I have found there is nothing to choose between the parties in terms of their needs, other than the difference in their mortgage capacity, in my view my findings in respect of conduct justify W’s award falling towards the lower end of the bracket. In other words, my decision will mean that her needs will still be met, but at a more modest level than would have been the outcome in the absence of the conduct findings. The principles of “needs” and “sharing” will still take centre stage, but instead of absolute equality, which is where those principles would otherwise lead me, there will be a small shift in H’s favour.

160. In my judgement, a fair outcome in this case is represented by a percentage split of 53:47 in H’s favour…. H may, depending on the choices each party makes in respect of a mortgage, be able to re-house at a slightly higher level.

161. The shift away from equality in H’s favour does not involve double-counting, because I have already adjusted the asset schedule to reflect those aspects of W’s conduct that have had direct financial consequences. This is intended as a further limited adjustment in respect of W’s conduct generally, because in my view the adjustments made to the asset schedule in respect of non-visible assets and add-back do not in this case give sufficient weight to MCA 1973, s25(g). It is, however, a modest departure and one that certainly does not depress W’s award below the bottom of her “needs” bracket.” [My underlining]


So, where does this leave us? 

In my view DP v EP is worth careful study as an example of exceptionality. W’s economic abuse of this particularly vulnerable H was deliberate, and meted out over time resulting in the significant depletion of the joint capital assets. It was also pleaded, disputed and then evidenced and proven at a contested Final Hearing. And after all that [and after reattribution and add-back], it lead to a shift from a 50:50 split, which was otherwise indicated, to a 53:47 split. When compared with the shifts from capital equality that we regularly see [60:40 or more?] to meet children’s or non-earning spouse’s housing needs, it puts this case into perspective.

Tsektov v Kharova [2023] EWFC 130

Also, in order to even be able to consider raising economic abuse as a relevant factor in the case, we have to comply with Peel J’s procedural requirements:

“A party who seeks to rely upon the other's iniquitous behaviour must say so at the earliest opportunity [that is Form E Qu 4.4 and then raise at FDA so that specific conduct statements can be directed], and in so doing should;

(a) state with particularised specificity the allegations, 

(b) state how the allegations meet the threshold criteria [exceptionality] for a conduct claim, and 

(c) identify the financial impact caused by the alleged conduct. 

The author of the alleged misconduct is entitled to know with precision what case he/she must meet.”

Peel J acknowledges that wanton dissipation can occur post-FDA, and asking the Court to draw inferences as to the existence of assets from a party's conduct in failing to give full and frank disclosure usually arises post-FDA [also note that litigation misconduct still does not need to be pleaded], but the general tenor of FRC case law guidance appears to be that unless you have raised, particularised and explained the impact of your conduct allegations at the first opportunity, and in doing so, convinced the FDA Judge that they are ‘exceptional’, you will not be able to rely upon them going forward in proceedings.

Claire Athis Schofield


Claire athis schofield