This is a guest post from Femi Ogunlende. Femi is a barrister at No5 Chambers.
This post discusses the current approach to domestic abuse in financial remedy proceedings. For those short on time and unable to read the post in full, the key conclusions you need to be aware of are; the recent decision of Mr. Justice Peel in N v J [2024] EWFC 184 is important and says if you want the court to consider domestic abuse as part of your case you will need to follow the procedure in Tsvetkov v Khayrova [2023] EWFC 130; it also says that domestic abuse will only potentially be taken into account by the court if it is exceptional and has had a negative financial impact on the alleged victim.
For those wishing to understand the current approach of the financial remedies court to domestic abuse in more detail, please read on……
Domestic abuse and the Financial Remedies Court
In the recent case of N v J [2024] EWFC 184, Mr. Justice Peel (the National Lead Judge of the Financial Remedies Court) considered the issue of domestic abuse in financial remedies proceedings and how domestic abuse interacts with the concept of ‘conduct’ for married couples and civil partners who are divorcing or dissolving their civil partnership.
The term ‘conduct’ is used to mean the process by which the court takes the bad behaviour of at least one of the parties into account when making its decision about their finances. Both Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 say that when the court is deciding how to divide a couple’s assets it can take the conduct (i.e. bad behaviour) of the other party into account when deciding how the assets should be divided, but only if it would be inequitable for the court not to take the bad behaviour into account. The practical consequence of the court taking ‘conduct’ into account when it says how the assets should be divided is that it will award the victim of the ‘conduct’ more of the assets than it otherwise would have done.
Why the interest in this case?
The issue of how the Financial Remedies Court takes domestic abuse into account is one that has a significant amount of professional interest from family lawyers, who have day to day experience of the difficulties with the current approach. The issue is also likely to interest the many litigants who have been impacted by domestic abuse and are involved, or are about to be involved, in financial remedy proceedings. The question has increasingly been asked: Can domestic abuse be taken into account under the heading of ‘conduct’?
Domestic abuse and the current approach to it by the Financial Remedies Court is currently being considered by Resolution (an organisation consisting of family law professionals). Resolution has set up a working party to consider domestic abuse in financial remedy proceedings and to make recommendations for change. The working party’s report is due to be published in October 2024 and will provide invaluable insight into family lawyers experience of how this issue is currently being dealt with by the courts and how the current approach can be improved to ensure victims are able to get a fairer resolution in financial remedies proceedings.
It is in this context that Mr. Justice Peel’s decision in N v J [2024] EWFC 184 has been read with interest by family lawyers to see if the National Lead Judge of the Financial Remedies Court is willing to signpost a change of direction form the court’s current approach. However, before looking at the details of Mr. Justice Peel’s decision we first need to consider the basic facts of the case.
The facts
The relevant facts are:
- The parties stated living together in either 2006 or 2009, entered into a civil partnership in 2012 and separated in July 2023. They were therefore in a relationship for at least 14 years;
- N was the party alleging he was the victim of domestic abuse and J was the alleged perpetrator;
- N wanted the court to take J’s alleged conduct into account when dividing the assets;
- N had mental health issues, including a diagnosis of bipolar affective disorder before the relationship started. His mental health deteriorated from mid 2012, and got worse from 2016, allegedly because of J’s conduct;
- N was hospitalised, spent time in rehabilitation and attempted suicide on two occasions;
- The asset in the case were about £32 million net;
The ‘conduct’ allegations made by N were that J had lied about his cheating and infidelity. J admitted in August 2021 that he had paid men for sex from 2011 onwards. N said J’s behaviour (i.e. denying he was cheating on N and making N think it was all in his head) resulted in the increasing need for N to obtain treatment for his mental health, including hospitalisation, rehabilitation, medication and electroconvulsive treatment. These treatments were allegedly based on false assumptions that N was paranoid, delusional and psychotic when J was in fact cheating on N and N’s fears were justified.
The court’s decision
The specific question the court was considering was whether the domestic abuse alleged by N was potentially relevant in the financial remedy litigation (and N should, therefore, be allowed to continue to make the allegations at the final hearing) or whether N should be prevented from arguing the issue of the domestic abuse and its effects at the final hearing.
Mr. Justice Peel concluded that the domestic abuse allegations made by N were not potentially relevant and N’s domestic abuse allegations would not be considered by the court at the final hearing.
The judge gave several reasons, 10 in total, why N’s allegations should not be considered at the final hearing. The most important of these reasons are:
- N’s allegations were not exceptional enough. The judge concluded that the existing case law required the behaviour of the other party to be exceptional before it could amount to ‘conduct’
- He was not satisfied that the bad behaviour N complained of caused the decline in his mental health;
- The conduct alleged by N did not ‘leap off the page’ as a factor to be considered by the court;
- The only direct financial consequence was N’s increased medical costs, which the court was anyway required to take into account (both the Matrimonial Causes Act 1973 and the Civil Partnership Act require the court to take the parties health needs into account).
- The conduct alleged by N did not add anything to his case and would not increase the assets the court would award him.
- Allowing N to argue conduct at the final hearing would be disproportionate. It would increase the length of final hearing and the parties’ legal costs for no purpose.
How significant is the decision?
In attempting to understand how important Mr. Justice Peel’s decision is, there are two questions that should be asked. Firstly, what is the wider impact of the decision made by the court based on the specific form of domestic abuse that was alleged? Secondly, are there any points of general principle that can be taken away and applied to other cases involving domestic abuse more generally?
Before answering both of these questions the role of precedent in our legal system needs to be briefly explained. Put at its simplest, the system of legal precedent means the decisions of the higher courts (the Supreme Court, the Court of Appeal and the High Court) are binding on all lower courts (including the Family Court, where most decisions about financial remedies are made) and they have to be followed by the lower court when the facts are substantially the same or the case involves the same principle of law. The decisions of the same level of higher courts will usually be followed when the facts are the same and involve the same principle of law.
This mean that the decision of Mr. Justice Peel (as a High Court judge) will have to be followed by all lower courts (for example a District Judge in the Financial Remedies Court) when the facts of the case are the same or similar and involve the same legal principle, but it also means that Mr. Justice Peel is bound by decisions of the Court of Appeal and the Supreme Court when making any decision involving the same facts or legal principles. This latter point is relevant to his decision in N v J.
What is the impact of this decision based on its specific facts?
This case was essentially about whether N’s allegation that he was deliberately lied to by J, the alleged lie being that he (J) was not cheating on N, and the effect this alleged lie had on N’s mental health could amount to ‘conduct’.
The allegation of domestic abuse made by N was a classic example of gaslighting. Therefore, on the face of it, the impact of this decision is that anyone seeking to ask the court to take domestic abuse allegations into account, which are limited to gaslighting allegations, is likely to have that request refused on the basis of N v J. If Mr Justice Peel was not persuaded that allegations of gaslighting that resulted in hospitalisation of the alleged victim were not exceptional enough, it is difficult to see in what circumstances gaslighting would be considered to reach the level of exceptionality Mr. Justice Peel says is required to amount to conduct. Therefore, it seems likely that District Judges will consider themselves unable to allow domestic abuse, based on gaslighting alone, to be argued at a final hearing and will likely prevent such argument from going forward after the First Appointment hearing.
However, there are two arguments against concluding that N v J shuts the door completely on arguing that domestic abuse allegations based on gaslighting alone can amount to ‘conduct’. Firstly, despite contradicting what I have said above, you could say that the decision in N v J concluded that gaslighting alone cannot amount to ‘conduct’ (Mr. Justice Peel does not even mention the term ‘gaslighting’), but that the decision was based on the fact that N was unable to either show there was any financial consequence of J’s actions and N was not able to show that J’s alleged conduct in fact caused his mental health decline, N having pre-existing mental health conditions. Therefore, if it can be shown that the domestic abuse is serious enough, regardless of whether it involves gaslighting behaviour or not, has caused a negative financial impact, then it should be able to be relied on as ‘conduct’
The second argument is that this was a case with significant assets of about £32 million and there appears to have been no significant dispute that there was enough money for N’s needs, however they were assessed by the court, to be met. Therefore, Mr. Justice Peel’s conclusion that including ‘conduct’ would make no difference to the assets that N would have been awarded was the main rationale for his decision and his comments about domestic abuse did not lay down any principle to be followed by the lower courts.
Mr. Justice Peel appears to accept this a potential argument when he says that he thinks that “in the vast majority of cases” the impact on the alleged victim can be taken into account by the court considering that party’s needs or if the assets are large enough by sharing the assets. This implicitly accepts that there will be a minority of cases where the impact of domestic abuse cannot be adequately reflected by taking that party’s needs into account and the court may need to consider if the domestic abuse alleged amounts to ‘conduct’.
What are the wider implications of this case?
The potential wider implications of this case are significant. It is the legal principles that Mr. Justice Peel seeks to either clarify or establish (depending on how you view it) that could have a significant impact on a victim’s ability to argue that domestic abuse as ‘conduct’ should be considered by the court.
The first important take away from N v J for anyone involved in a case where ‘conduct’ is an issue is that Mr. Justice Peel has repeated the importance of the procedure that any party wanting to allege conduct must usually follow. This procedure was first set out in an earlier decision of his in Tsvetkov v Khayrova [2023] EWFC 130 . In summary, what Tsvetkov says is the person wishing to rely on conduct must make this clear at the earliest opportunity (which will usually be in the Form E), they must specify what allegations they are making, identify the financial impact of that allegation, and then the court will consider at the First Appointment hearing if the allegations should proceed bearing in mind the exceptionality threshold Mr. Justice Peel says needs to be shown.
Therefore, if you are involved in financial proceedings, or you are about to start financial proceedings, and want to rely on conduct, as matters currently stand, the court is likely to expect you to follow this process.
The second important take away from N v J is what Mr. Justice Peel has to say about the extent to which the Domestic Abuse Act 2021 and Practice Direction 12J of the Family Procedure Rules 2010 (which provides comprehensive guidance on how the court should approach domestic abuse in private law cases) apply in financial remedy proceedings. Mr. Justice Peel states that neither the Domestic Abuse Act nor Practice Direction 12J amends the definition of conduct in financial remedy proceedings but says both provisions are “plainly contextually important and relevant to all family proceedings, including financial remedies”
It is not clear exactly what status or role Mr. Justice Peel views both provisions as having in financial remedies proceedings. However, as he appears to accept that both provisions have a role, there does not appear to be any reason why anyone asking the court to consider domestic abuse in financial remedies proceedings should not argue they both apply.
It is important to note that nothing that is said by Mr. Justice Peel distracts from or should discourage victims of domestic of abuse from taking advantage of the protection on giving evidence and participating in family proceedings as a vulnerable party under Practice Direction 3AA of the Family Procedure Rules and the prohibitions on cross examination between the alleged victim and perpetrator set out in the Domestic Abuse Act 2021 also apply to financial proceedings.
The third important take away from N v J is the extent to which an alleged victim of domestic abuse will need to show that the abuse has had a direct financial consequence or impact on him or her. Mr. Justice Peel accepts that neither the Matrimonial Causes Act nor the Civil Partnership Act says conduct must have a financial consequence before it can be taken into account. However, while recognising this very important (and arguably decisive) factor, Mr. Justice Peel then goes on to go through, in detail, several cases which he determines show the need for the victim of the alleged bad behaviour to show a financial impact of that behaviour.
One of the cases Mr. Justice Peel discusses is the Court of Appeal case of Goddard-Watts v Goddard-Wats [2023] EWCA Civ 115 where the Court of Appeal took conduct into account even though it had no financial consequence. Under the precedent system, Mr. Justice Peel was bound to follow this decision and accept that there is not an absolute requirement to show that the alleged conduct had a financial impact, whether he agreed with it or not. However, based on what is said to be a lack of clarity of the court’s reasoning, Mr. Justice Peel expressed the view that Goddard-Watts does not in fact depart from the traditional view that conduct must have a financial consequence, if it is to be successfully relied on.
The practical consequence of this part of the decision means that anyone wishing to pursue ‘conduct’ will have to show that there has been some financial impact or consequence as a result of the alleged behaviour of the other person, unless they can persuade the District Judge hearing their case that Mr. Justice Peel’s interpretation of the decision in Goddard-Watts should not be followed and the court should instead rely on its own reading of the case.
Conclusion
In summary, regardless of the view you take about the reasoning of Mr. Justice Peel and his conclusions, his decision in N v J is an important one that is likely to shape how District Judges and Circuit Judges approach allegations of domestic abuse in financial remedy cases, at least until the Court of Appeal is able to consider this issue further. When considering domestic abuse, the court’s focus is very likely to be on the financial impact or consequence of the abuse. It is important to be aware that the court will not be willing to punish any alleged bad behaviour by reducing the size of the financial award it makes to the person that has behaved badly.
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