Conduct arguments in financial remedy cases are famously hard to win. The bar is high, the principles are narrow, and the courts are cautious. But two recent decisions—MRU v ECR [2025] EWFC 218 (B) and Y v Z [2025] EWFC 221—help clarify the parameters of what counts, when conduct should be pleaded, and how a court might be persuaded that it should make a difference.
Case 1: MRU v ECR — Imprisonment and its Aftermath
In MRU v ECR, the wife had served a prison sentence for attempting to interfere with a judicial process in earlier Children Act proceedings. At final hearing, the husband sought to rely on this as conduct within section 25(2)(g) of the Matrimonial Causes Act 1973. The judge found that the wife’s actions had caused significant disruption and anxiety to the family and could not be ignored when considering the fair division of assets.
Although the case did not result in a punitive financial order, it did result in the husband keeping the former matrimonial home and the parties' pensions being equalised, reflecting his increased needs and financial vulnerability post-incident.
Key point: Serious criminal conduct, especially when linked to the family breakdown, can be relevant even in low-asset cases—particularly if it affects the other party's ability to rebuild financially or psychologically.
Case 2: Y v Z — Conduct vs. Nuptial Agreements
In contrast, Y v Z involved a dispute over how to interpret a pre-nuptial agreement (PNA) in light of the husband's alleged financial misconduct. The wife claimed he had taken millions from her accounts without consent and even doctored emails to hide it. But the question for Mr Justice Cusworth was procedural: should this be pleaded formally as conduct under section 25(2)(g), even though it was about how the PNA should be implemented?
The court held that yes, the wife should be allowed to amend her pleadings to include conduct, but that this was not a radical change—she had always intended to argue that fairness required a deduction from the husband's entitlement due to his financial behaviour. Still, the judgment highlights the fine lines between:
- Unfair behaviour affecting what’s "owed" under an agreement; and
- Gross or obvious conduct justifying a punitive financial adjustment.
Key point: If you're alleging dishonest or improper financial conduct, plead it properly under s.25(2)(g)—but courts may still consider fairness outside that framework if behaviour undermines the structure of an agreement or the division of assets.
Lessons for Practitioners: How to Succeed With a Conduct Case
Conduct will only bite financially in limited circumstances—but where it does, it must be:
- Particularised with clarity (dates, figures, documents);
- Linked to a financial consequence (loss, cost, waste); and
- Pled early and explicitly under the correct statutory route.
You can’t smuggle in a conduct case “by the back door.” As Peel J warned in Tsvetkov v Khayrova [2023] EWFC 130:
“It is wholly inappropriate to advance matters at final hearing as being part of the general circumstances of the case which do not meet the high threshold for conduct...”
But Y v Z also reminds us that:
“There have hitherto been a number of situations where a question of how a party has behaved may well have been relevant...without either party invoking the conduct provisions.”
That nuance matters. Courts are mindful that bad behaviour may affect the fair implementation of pre-nups or entitlement to share—but that’s not the same as punishing it under s.25(2)(g).
Final Word
Together, MRU v ECR and Y v Z show us both ends of the conduct spectrum—from clearcut wrongdoing with real-world fallout, to sophisticated financial gamesmanship that might affect entitlement but not necessarily trigger punishment.
If you’re going to plead conduct, do it early, do it properly, and make sure you can prove both what happened and why it matters financially. If you’re opposing it, challenge its scope and the causal link to the outcome. The courts will listen—but only if the case is made carefully, not emotionally.
