Where there are allegations of domestic abuse in financial remedies proceedings, there is tension between the court’s approach and Resolution’s recommendations.
In the last 18 months, the court has made its approach to conduct in financial remedies proceedings very clear; there are very few cases where conduct will be a live issue. Resolution is pushing back on this approach where there are allegations of domestic abuse. There is a simpler way to address both the judiciary’s and Resolution’s concerns without overloading the system with fact-finds.
Changes in Financial Remedies Court Arena
In the last 18 months, there have been significant changes in the financial remedies court (FRC) arena. We have seen the introduction of new rules and judicial guidance on conduct.
New rules
Under the new rules (29 April 2024) the court has a duty to consider non-court dispute resolution (NCDR) and encourage it.
Domestic abuse is a valid exemption to a MIAM under FPR 3.8(1). However, the party seeking to rely on an exemption must prove their entitlement. Practice Direction 3A para 20 sets out how domestic abuse can be proved; inevitably, to get the proof, the victim must have reported the abuse. Lack of evidence of abuse makes it hard to prove the entitlement to the exemption. If the perpetrator is ‘really good’ in asserting control either via physical or coercive control, the victim will not have reported it to anyone.
There are no exceptions to post-issue NCDR. The court can order an adjournment of proceedings to allow NCDR to take place without the parties’ consent (see FPR, 3.4(1A)(b)). NCDR options are broader than mediation and can adapt to provide NCDR that protects victims of domestic abuse. For the NCDR process to be fair to victims of domestic abuse, it needs lawyers/professionals on both sides. Lawyers/professionals stop direct contact, they provide a layer of protection and neutralise the power imbalance.
Lawyers cost money, and although a victim of domestic abuse may qualify for legal aid, the perpetrator will not. The victim is exposed to the risk of contact with the perpetrator. The Family Court can provide qualified legal representatives (QLRs) to stop a perpetrator cross-examining victims. QLRs are not available for NCDR. Leaving a victim exposed to their perpetrator in the NCDR process.
The rules push parties to use NCDR. NCDR exposes victims of domestic abuse to a risk of an unfair outcome as they are exposed to contact with their perpetrator. On a practical level, parties using NCDR are more likely to be represented and have more assets, leaving a disproportionally higher number of unrepresented parties with fewer assets in the court system.
Judicial guidance case managing conduct
Mr Justice Peel’s decision in Tsvetkov v Khayrova [2023] EWFC 130, which was confirmed by him in N v J [2024] EWFC 184, set very clear limits on when conduct will be considered in the financial remedy courts. In a very short summary, the key points in Tsvetkov v Khayrova [2023] are i) conduct remains a very high bar to reach, ii) you must plead it as soon as possible, iii) there must be a causative link between the conduct and the financial consequence.
Mr Justice Peel considered that in the great majority of cases, the impact on the alleged victim can and will be taken into account by reference to the conventional MCA 1973 s25 criteria. In his view:
- it was doubtful that domestic abuse would have a material impact on the vast majority of cases, such that it needs to be litigated.
- It was not the job of the FRC to impose a fine, a penalty, or damages upon a party for conduct.
- Nor was it for the FRC to moralise or apportion blame for how the parties behaved towards each other during their time together.
- Courts should not expose an alleged victim of domestic abuse to a remorseless investigation into that very domestic abuse.
- Courts should look forward and not back, and where possible, set the parties on the road to financial independence.
Mr Justice Peel’s view is that if financial remedy courts are to determine allegations of domestic abuse, the implications on the system would be profound.
Pulling it all together. The rule changes have/will result in a disproportionately higher number of unrepresented parties in the court. Unrepresented parties are less likely to be able to navigate Tsvetkov v Khayrova two-stage test and the guidance on pleading conduct. Courts will be spending more time on case management, but given that the national lead judge in the financial remedy court has stated it is doubtful that domestic abuse would have a material impact on the vast majority of cases, conduct issues are likely to be barred at the FDA stage. Barring the argument does not help the court get the relevant information.
Resolution’s research paper
On 08 October 2024, Resolution published its ‘Domestic Abuse in Financial Remedy Proceedings’ research paper. The research looks at the connection between domestic abuse and the treatment of finances on separation and divorce/dissolution and how domestic abuse is addressed in financial proceedings.
Resolution is right to the impact of domestic abuse on the outcome in the financial remedies proceedings. The Office for National Statistics records for the YE March 2024 an estimated prevalence rate of 16.3% in the category ‘Any partner abuse (non-physical abuse, threats, force, sexual assault or stalking)’.[1]
Resolution’s report contains recommendations, one of which is a recommendation for a new practice direction[2]. There are three suggestions for the practice direction:
- provide clarification that all forms of domestic abuse can cross the statutory threshold of conduct that it is inequitable to disregard …
- confirm, perhaps by examples, what domestic abuse would cross the threshold either by reference to the abuse itself or by reference to the long-term impact;
iii. set out how conduct that it is inequitable to disregard could impact on the outcome of needs and/or sharing cases;
vii. set out that the court should take into account that:
- perpetrators should not be able to achieve a better financial outcome because of previous domestic abuse, or ongoing abuse in the proceedings;
Assuming Resolution’s recommendations gain traction and there is a new practice direction (which would supersede the Tsvetkov v Khayrova’s process) the courts are going to be faced with a disproportionately high number of unrepresented parties who slow down the system, trying to navigate their way through domestic abuse fact-finding hearings. This can only result in further strain on the family justice system.
How to address both the judiciary’s and Resolution’s concerns without overloading the system with fact-finds
Perhaps a quicker and less damaging approach is for a party whose earning potential has been reduced through domestic abuse to produce a report on earning capacity and earning potential or disclose a DWP work assessment. In the case of non-disclosure, it is likely quicker to make the most of the powers that already exist.
If we look at the key financial remedies areas, we can see there are ways and means to use what already exists (or tweak it) so the parties and the FRC can get the information they need.
Disclosure to ascertain the matrimonial assets and financial resources
Financial information already exists within the CMS and DWP. This could be leveraged in the financial remedies court. Courts already have the power to make third-party disclosure orders; perhaps it would be more efficient if the FRC had the power to authorise one party to contact any institution where the other party may have a financial or property interest and get the information needed.
On its face, this appears intrusive. However, when we balance the needs of domestic abuse victims, the needs of the judicial system, and the privacy of the non-discloser against the fact that the non-discloser has a duty to disclose, the scales tip in favour of leveraging and tweaking what we have to get the FRC gets the information it needs, with the least amount of costs. Using what we already have or tweaking TPDO powers so they are more akin to a letter of authority would, in reality, be presumptive enforcement, not intrusion.
Income needs
A return to work/work assessment could provide the court with the key information on a person’s health, ability to work, and earning potential. It would be a more cost-effective solution, which would provide faster solutions than fact-finds, to push for a change in legislation to give the FRC the power to get the information the DWP already has or give it the power to order a return to work report. Return-to-work reports could be paid for through specific funding in the domestic abuse context.
Housing needs
At a simple level, we are talking about how many rooms a party needs and where they need to live. Where domestic abuse creates a need which affects housing, e.g. a disability, it is already reflected in the physical housing need, e.g. additional room for a carer, a budget for adaptations or retaining the adapted family home. This often means a departure from equality in favour of the victim.
Conclusion
Mr Justice Peel is right that the FRC should not get into compensating/penalising based on unquantifiable conduct, nor can the system cope with the additional strain of fact-finding conduct. Resolution is right; steps should be taken so that victims of domestic abuse get a fair outcome, and or perpetrators do not get a better outcome due to their abuse.
If we use what already exists, tweak or strengthen it, then the FRC can i) get the information it needs, ii) avoid breaking the system by asking judges in the Family Court to compensate/punish for would-be criminal offences on the balance of probabilities, and iii) protect and meet the needs of the victims of domestic abuse.
[1] https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/articles/domesticabuseprevalenceandtrendsenglandandwales/yearendingmarch2024
[2] Resolution Report. Domestic Abuse in Financial Remedy Proceedings. October 2024. Page 31
Elizabeth Bowden, Barrister, College Chambers
