One of the questions I am asked most frequently is "Surely the judge will take their behaviour into account?"
For many people, it feels instinctively unfair that a spouse who has behaved badly should receive the same financial outcome as someone who has acted honestly and responsibly. The reality is rather different.
A recent decision in WK v HN [2026] EWFC 169 (B) provides an excellent illustration of where the law on conduct currently stands—and why conduct arguments continue to face a very high hurdle.
The Allegations
The case involved a lengthy list of allegations against the husband. The wife argued that he had:
- dissipated business assets;
- diverted company money;
- made improper payments;
- manipulated company accounts; and
- reduced the value of the matrimonial assets.
The allegations were substantial and required a five-day hearing to determine them. Yet, after hearing all of the evidence, the court rejected the central conduct allegations. The assets were ultimately divided on an equal basis.
Suspicion Is Not Enough
One of the striking features of the judgment is the distinction the court drew between suspicion and proof. There were undoubtedly unusual transactions. Money had moved between companies. Large sums had been spent. Invoices appeared inconsistent. Third parties had played significant roles. The judge accepted that aspects of the evidence raised legitimate questions. However, questions are not the same as proof.
For example, although invoices appeared different and some transactions looked unusual, the evidence ultimately pointed towards a trusted third party rather than deliberate misconduct by the husband. Likewise, what appeared at first sight to be questionable transfers between businesses were accepted as properly accounted-for intercompany loans. The husband may, in the judge's words, have been naïve in placing too much trust in others, but naïveté is not the same as dishonesty.
Conduct Is More Than Bad Behaviour
The decision reflects the increasingly settled approach adopted by the Family Court over recent years. Judges have repeatedly emphasised that conduct arguments are exceptional.
As Peel J explained in Tsvetkov v Khayrova, a party alleging conduct must establish three things:
- the facts relied upon;
- that those facts meet the exceptionally high statutory threshold; and
- an identifiable financial consequence caused by that conduct.
The Court of Appeal reinforced in Goddard-Watts v Goddard-Watts that financial remedy proceedings are not designed to punish bad behaviour. Except in unusual cases, litigation misconduct is addressed through costs orders, while financial conduct generally requires a measurable financial impact before it will affect the substantive award.
More recently, Cusworth J in LP v MP drew together these authorities, together with Mostyn J's analysis in OG v AG, emphasising that conduct falls into different categories—personal misconduct, economic misconduct, add-back, litigation conduct and adverse inferences—and that it is important not to blur them. Each has its own legal consequences and not every allegation will affect the financial outcome.
Taken together, these authorities show that the courts remain firmly focused on fairness rather than punishment.
Not Every Poor Business Decision Is Misconduct
Another useful lesson from WK v HN is that business mistakes are not automatically conduct. The husband had delegated significant responsibility for one of the pharmacies to a trusted friend. With hindsight, the arrangement proved problematic.
The judge described the husband as having been naïve in allowing his friend so much autonomy. However, poor management, misplaced trust or commercial misjudgment are not necessarily evidence of wanton and reckless dissipation.
This distinction is important, particularly where family businesses are involved. Divorce judges are not there to second-guess every commercial decision made during a marriage.
The Cost of Conduct Allegations
The judgment also raises a practical question. Conduct cases are expensive. Here, the court devoted five days to hearing allegations which ultimately failed. Clients considering conduct allegations should therefore ask not only "Can I prove it?" but also "Will proving it actually change the financial outcome?" Increasingly, those are two very different questions.
Final Thoughts
The law on conduct has become much clearer over the past few years. While the courts remain willing to take truly exceptional conduct into account, the threshold remains deliberately high.
WK v HN reinforces an important message. Suspicion, poor business decisions or even unusual financial transactions will not, without more, justify a departure from the ordinary principles governing financial remedy cases.
For anyone considering raising conduct allegations, careful legal advice at an early stage is essential. The strongest cases are those supported by clear evidence, a demonstrable financial consequence and a realistic assessment of whether the allegations are likely to affect the ultimate award.
As this case demonstrates, conduct may be one of the most talked-about aspects of financial remedy law—but it remains one of the hardest to prove successfully.
