Domestic Abuse in Financial Remedy Cases

Published: 06/07/2022 07:09

Introduction

While domestic abuse is one of the issues currently at the top of the family law agenda,1 it is not as prominent in financial remedy work as it is in children work and professional discussion is limited.2 The absence of a practice direction for financial proceedings equivalent to Family Procedure Rules 2010 (SI 2010/2955) (FPR) PD 12J in child arrangements cases and the perceived high threshold for ‘conduct’ under section 25(2)(g) of the Matrimonial Causes Act 1973 (MCA 1973) have meant that domestic abuse may not be routinely considered in financial cases. While there has been very little research on domestic abuse in financial proceedings in England and Wales (or, indeed, anywhere else), the research that does exist suggests that issues of domestic abuse may be present in a significant proportion of financial proceedings, with approximately one-third of contested cases and one-quarter of consent order cases containing some conduct which amounts to domestic abuse.3 Research has also found that financial proceedings may be used by an abusive spouse as part of an ongoing pattern of coercive control,4 and that the outcomes of financial proceedings may perpetuate economic abuse.5 A history of domestic abuse in the relationship is correlated with poorer financial outcomes for women, which in turn have long-term consequences for those women and their children.6

The aim of this article is to explore how family justice professionals working in the field of financial remedies can identify where domestic abuse may be present and the ways in which economic abuse and coercive and controlling behaviour may be relevant in such proceedings. In addition, we make a number of suggestions as to how family justice professionals should approach a financial remedies case when issues of domestic abuse might be raised. In light of recent developments primarily in the area of domestic abuse in private child cases, the article begins by considering the reforms introduced by the Domestic Abuse Act 2021 (DAA 2021), followed by discussion of some contextual issues.

Definition and scope of domestic abuse

DAA 2021, s 1 provides a statutory definition of domestic abuse. This has been incorporated into FPR PD 12J for child arrangements cases where domestic abuse is present. Section 1 provides a definition to be applied consistently in all areas of the law where the intention is to protect and support the victim. It covers a wide range of behaviours including physical or sexual abuse, violent or threatening behaviour, controlling or coercive behaviour and economic abuse (s 1(4)). While all forms of domestic abuse should be considered in financial remedy cases, coercive and controlling behaviour and economic abuse may be particularly relevant.

The DAA 2021 does not specifically define coercive or controlling behaviour, although it is further explained in FPR PD 12J, para 3:

‘“coercive behaviour” means an act or a pattern of acts of assault, threats, humiliation and intimidation or other abuse that is used to harm, punish, or frighten the victim;

“controlling behaviour” means an act or pattern of acts designed to make a person subordinate and/or dependent by isolating them from sources of support, exploiting their resources and capacities for personal gain, depriving them of the means needed for independence, resistance and escape and regulating their everyday behaviour.’

Economic abuse is further defined in DAA 2021, s 1(5), as ‘any behaviour that has a substantial effect on [the victim’s] ability to acquire, use or maintain money or other property, or obtain goods or services’. With economic abuse, abusers control their partner’s access to money and finances and thereby limit their freedom and autonomy. This can include the abuser:

  • Limiting the victim’s access to money or information on finances, for example by:
    • telling the victim that they have no rights in relation to the matrimonial home;
    • holding all the family assets in their sole name;
    • refusing to discuss household income and expenditure with the victim.
  • Having control of all household finances.
  • Not allowing the victim to work, train or study:
    • thereby preventing them from becoming financially independent and being able to accumulate a pension for financial security in later life;
    • this, of course, has significant consequences upon separation and divorce when considering the emphasis on the parties becoming self-sufficient and finally independent of each other.
  • Appropriating the victim’s wages:
    • this can also include the abuser restricting their access to other income including welfare benefits.
  • Controlling how money is spent:
    • including dictating what a partner can buy, closely examining their bank statements/receipts and requiring them to justify all purchases.
  • Making the victim personally liable for loans or debts, coercing them into taking out credit cards, adversely affecting their credit rating, depleting their financial resources:
    • conversely the abuser may also not have told the victim when taking out loans or other debt.
  • Refusing to pay bills leading to debt.
  • Refusing to pay child support, or minimising their own child support liability.

Background and context

Over the past 2 years, there have been legal, research and policy developments covering a range of domestic abuse related issues. While the DAA 2021 introduced the new statutory definition of domestic abuse which includes controlling or coercive behaviour and economic abuse, there is a need to remain cognisant of the difficulties associated with recognising and approaching a case where allegations of abuse are made. For example, this issue was reflected in the Private Law Working Group report, which highlighted concerns amongst consultees about there being a low level of understanding of abuse, particularly the issue of coercive control, by some family judges and magistrates.7 Limitations in the effectiveness of the family courts in identifying and responding to allegations of domestic abuse in private child cases were also identified by the Harm Panel in the Ministry of Justice’s 2020 report.8

Recent case law has also highlighted these limitations, alongside providing some helpful pointers as to how the Family Court should deal with allegations of domestic abuse. The case of Re H-N & Ors (Children) (Domestic Abuse: Finding of Fact Hearings) [2021] EWCA Civ 448, albeit not a financial remedies case, provided an opportunity for the Court of Appeal to give some guidance on the issue by reiterating a movement away from the emphasis on specific ‘incidents’ of abuse, to a focus on the wider context illustrated by patterns of behaviour. The Court of Appeal criticised the judge for accepting the father’s submission that the mother in this case had taken trivial incidents and blown them ‘out of all proportion’,9 noting that the judge had wrongly characterised a slap to a heavily pregnant woman as ‘trivial’ because she had remonstrated with him for opening her private mail. Rather than being ‘trivial’, these incidents taken together appear to be clear indicators of coercive and controlling behaviour on the part of the husband. Furthermore, as Adrienne Barnett has noted, this case resonates with the findings of the Harm Panel that ‘victims of domestic abuse are often judged according to idealised stereotypes of the “real” or blameless victim, which means that they are expected to behave in particular ways both in and outside the courtroom in order for their allegations to be taken seriously’.10

The difficulties for the judiciary in assessing the presence of coercive and controlling behaviour and potential issues of the ‘idealised stereotype’ of the ‘blameless’ victim, can be seen in the recent case of Traharne v Limb [2022] EWFC 27, where Cohen J considered the issue of coercive control in the context of a post-nuptial agreement. The court dismissed the wife’s allegation of coercive control in this case noting that the parties’ relationship was ‘at times tempestuous’ and the very different characters of the parties.11 However, in this case, Cohen J did note how the approach in Edgar v Edgar [1981] 2 FLR 19 has stood the test of time, and that coercive and controlling behaviour is ‘plainly an example of undue pressure, exploitation of a dominant position or of relevant conduct’ when it comes to considering whether an existing financial agreement can be vitiated.12

Although these recent developments appear to reflect the increasing willingness of policy-makers and the courts to recognise the existence of coercive and controlling behaviour, they also emphasise the difficulties for the court in assessing whether such abuse has taken place. Given that research has suggested that approximately one-third of contested financial remedy cases within the court will have a domestic abuse background, it is imperative that consideration is given to the potential relevance of domestic abuse in financial proceedings especially where it may clearly be affecting the parties’ positions and their ability or willingness to negotiate. In the sections that follow, we provide some suggestions as to how family justice professionals should approach and deal with this issue.

Identifying domestic abuse in financial remedy cases

In financial remedy cases, controlling or coercive behaviour may be manifested by the abuser’s refusal to comply with orders or reach agreement; by the abusive party’s refusal to engage with proceedings; a refusal by the abusive party to give disclosure, and/or deliberately prolonging the process of disclosing assets, or in the alternative, the abuser may appear to comply in proceedings but presents the victim as a liar or claims that they are exaggerating their situation.

Economic abuse may be manifested in efforts to exhaust the victim’s financial resources by engaging in protracted court proceedings, and/or by making repeated and unnecessary applications which have the effect of prolonging proceedings and negatively affecting the other party both economically and emotionally; one party having limited access to money or to information regarding the other party’s finances; one party being made solely liable for loans or debts.

In their initial and subsequent meetings with clients, family justice professionals should be alert to these potential flags. In the event that a legal representative becomes aware of any issue of domestic abuse of relevance to the case, but where they do not feel that the level of domestic abuse meets the threshold under MCA 1973, s 25(2)(g) to be raised separately as a serious ‘conduct’ allegation,13 then legal practitioners should be alive to the broad discretionary nature of s 25 and the statutory steer to ‘have regard to all the circumstances of the case’ in s 25(1). If a victim has been deprived of money or financial independence during the marriage, if they have been prevented from working or studying thereby preventing them from becoming financially independent, if their financial resources have been depleted, or if they have no or limited pension accrual due to economic abuse, then this speaks to their current circumstances and future financial needs.

The task for the judge is particularly tricky, given the reliance on paperwork only at the initial stages. At a first appointment hearing, the only papers the judge will have are the respective parties’ Form Es and, if the parties have complied with directions a statement of issues, chronology, questionnaire, and Forms H and G. Therefore, possible indicators of domestic abuse for the judiciary might include:

  • a mediation information and assessment meeting (MIAM) exemption due to domestic abuse;
  • a non-molestation order or undertakings in force and identified on the Form E as other proceedings;
  • allegations in filed material – statement of issues, questionnaires;
  • a party requesting special measures (now known as ‘participation directions’ under FPR PD 3AA);
  • one party being in receipt of public funding (although lack of public funding is not a contra-indication, given the low means threshold and the fact that not all victims will meet the evidential requirements for legal aid);
  • a request that a party’s address be kept confidential.

How to approach a financial remedies case when issues of domestic abuse might be raised – how proceedings should be conducted

If domestic abuse is of relevance or potential relevance, then the court should consider whether that may impact on the party’s ability to participate fully in the proceedings. FPR Part 3A and PD 3AA require the court to consider whether either of the parties is vulnerable.

FPR 3A.2A provides that where a party is, or is at risk of being, a victim of domestic abuse, they will be considered vulnerable and therefore automatically eligible for available measures in family proceedings. The court must then consider whether it is necessary to make a participation direction. It will, however, remain a matter for the court to decide which of the available measures are necessary in the particular circumstances of the case.

In considering this, attention should be given to the fact that domestic abuse may also exacerbate other forms of vulnerability (such as mental ill-health, disabilities, learning difficulties or lack of English language skills), but it is also a factor that may create vulnerability in and of itself. In particular, the traumatic effects of domestic abuse may mean that the victim is unable to attend a hearing in close proximity to their abuser without significant distress, and may have cognitive and/or physiological difficulty concentrating or speaking if a traumatic reaction is triggered. A party may also feel inhibited or be intimidated from putting their views to the court in the presence of their abuser.

Participation directions apply as soon as possible after the start of proceedings and continue until the resolution of the case. The directions the judge can make are set out in FPR 3A.8. In cases raising issues of domestic abuse, the relevant measures will be those which:

‘(a) Prevent a party or witness from seeing another party or witness

(b) Allow a party or witness to participate in hearings and give evidence by live link

(f) Do anything else which is set out in Practice Direction 3AA.’

The judge should consider making directions for screens or other measures such as video links or a hybrid hearing to ensure a party’s safety or to prevent intimidation and minimise distress during the proceedings. If a party is to give evidence, the judge should consider what measures might be necessary in accordance with FPR PD 3AA, para 5. In November 2020, the Family Justice Council (FJC) published guidance on the practical considerations to be adopted to ensure safety and protection from abuse in all family proceedings where remote and hybrid hearings are being considered.14 In particular, the FJC guidance provides an important checklist that should be used to decide upon the format of the hearing, including identifying any need for appropriate personal protection or additional measures.

A particular issue in financial proceedings, if both parties are in person and domestic abuse is present or considered as a risk, is how an effective Financial Dispute Resolution (FDR) hearing can take place. FPR 9.51(4) requires the court to refer a case to an FDR appointment unless: (1) there has been an effective FDR at the first appointment; or (2) there are exceptional reasons for making an FDR referral inappropriate. If the abused party or both parties are litigants in person, should they be expected to negotiate directly out of court in an FDR? Does this fall within the definition of exceptional reasons?

If the judge has already made a participation direction on the basis of a party’s vulnerability, it would not be reasonable to expect that party to engage in negotiation with the other party out of court. The judge may decide to keep both parties in court for reasons of safety and security, but it may still not be reasonable to expect that party to engage in negotiations directly with the other party, or the judge may need to give a particularly strong indication to try to ensure the fairness of any agreement and that it does not perpetuate domestic abuse.

The judge should also consider how to deal with a situation when the other party refuses to negotiate and places the vulnerable party in a situation where a final hearing is the only option available. If a vulnerable person is to give evidence at a final hearing, then FPR PD 3AA provides that a ground rules hearing must first be held to give directions for their participation at the hearing.

The final order

In considering either consent applications or a final order following contested proceedings, the judge should bear in mind that the experience of having survived an abusive relationship is likely to impact on the victim’s future needs. If a party has been deprived of money or financial independence during the marriage, if their financial resources have been depleted, if they have limited or no pension provision, then their future financial needs will be increased accordingly. There is also a significant gender element to this.

Research has found that outcomes in financial proceedings are gendered, with women more likely than men to ‘give up’ on a fair settlement in the interests of pragmatism, good relations, self-preservation or sacrifice (prioritising the maintenance of peace and not ‘provoking’ the abuser over their longer-term financial well-being).15 This has particular resonance when it comes to the issue of pensions. Victims of abuse may be reluctant to make a claim against their husband’s pension for fear of repercussions, and when considered alongside the low number of pension sharing orders,16 and the considerable wealth that may be placed in pensions, an awareness of the potential consequences of offsetting or being coerced into ignoring the pension for victims of abuse should be considered.

Concluding thoughts

Domestic abuse has the potential to affect all stages of financial remedy proceedings and pre-proceedings discussions with clients. Increased awareness of economic abuse and coercive control through, inter alia, the new statutory definition, should help family justice professionals to recognise where it has been a feature of the marriage and is ongoing during the divorce. This should hopefully enable practitioners to take steps to minimise the risk of financial remedy proceedings providing further opportunities for abuse.

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