Resolution have published their findings on the impact of economic abuse on Financial Remedy proceedings. Their report takes a detailed look into the relationship between the financially related aspects of domestic abuse and the division of finances on separation, divorce or dissolution.

The report brings together the thoughts of a working group Resolution assembled mid-way through 2023. The group was made up of family law solicitors and barristers, representatives from the Family Law Bar Association, academics, IFAs and domestic abuse charities. Their brief was to gain a better understanding of what impact reported incidences of domestic abuse – and more specifically economic abuse – is having on the outcomes from Financial Remedy proceedings.

The full version of ‘Domestic abuse in financial remedy proceedings (October 2024)’ can be read here.

What is economic abuse?

Economic abuse is a legally recognised form of domestic abuse defined by the Domestic Abuse Act 2021. It involves one partner taking control of their partner or ex-partner’s money, finances and purchases.

The Act describes economic abuse as:

“Any behaviour that has a substantial adverse effect on the [victim’s] ability to (a) acquire, use or maintain money or other property, or (b) obtain goods or services.”

Economic abuse can manifest itself within a range of financially related areas. Some strive to control over income, spending, bank accounts, bills, the purchase of food, clothing and luxuries or even borrowing. Others want to control the way money is spent on transport and technology in a bid to maintain control over how their partner socialises, works or communicates.

What is most worrying is that today this form of abuse – now a recognised form of coercive and controlling behaviour – is estimated to impact 1 in 5 women.

What did Resolution’s study into domestic abuse in Financial Remedy proceedings find?

The report does not make comfortable reading, not least as so much of the commentary comes directly from victim-survivors’ personal accounts of the abuse they suffered.

From a professional perspective, the key findings of the report are:

• 80% of those involved believe domestic abuse and, more specifically, economic abuse is not sufficiently taken into account in Financial Remedy proceedings.
• 85% said domestic/economic abuse is not sufficiently taken into account in Schedule 1 cases.
• 87% said it is not sufficiently taken into account if the parties have cohabited but were not married.

The key reasons those involved put forward to support their theories were insufficient access to legal aid, the failure of perpetrators to comply with both full and frank disclosure and Court Orders.

In their commentary, Resolution state they feel that the current approach of the Courts to s25(2)(g) of the Matrimonial Causes Act 1973 leads to unfair outcomes for some victim-survivors of domestic abuse. As a result, they recommend that:

• Amendments to the Family Procedure Rules should be considered to ensure to safeguard parties from ongoing domestic abuse.
• The law should make it clear that the duty of full and frank disclosure starts when the parties engage in non-court dispute resolution, not just when or even if court proceedings start.
• If there is ongoing economic abuse, non-court dispute resolution should not continue.
• Financial arbitration awards and agreements reached at private Financial Dispute Resolution hearings should be converted more quickly into binding Court Orders.
• Amendments should be made to the Financial Remedies Court Efficiency Statements so that financial remedy proceedings can no longer be used by perpetrators to prolong domestic abuse.
• Reviews of the law and procedures around interim financial remedy should be reviewed.
• The law regarding Legal Services Payment Orders should be reviewed to recognise ongoing economic abuse may prevent victim-survivors from being able to access resources to instruct a lawyer to help them satisfactorily resolve their financial situation.
• Financial thresholds and requirements for securing Legal Aid should be reviewed and Legal Aid rates for financial remedy work should be increased.
• The consequences for not complying with Financial Remedy Order should be stipulated at the time the Order is made.
• The recommendations the Law Commission made regarding extending existing methods of enforcement and introducing new methods of enforcement in 2016 should now be introduced.
• A new Practice Direction should be introduced setting out the approach that should be followed in cases involving domestic abuse.

Obviously, a huge amount of work and thought has gone into the production of ‘Domestic abuse in financial remedy proceedings (October 2024)’. It also seems as though the implementation of the supporting recommendations could go a long way to provide victim-survivors with greater clarity and more support as they strive to achieve the fairest financial position following separation. We look forward to seeing these begin to drive positive changes for the victims of domestic and economic abuse.

If you or a client are involved in a separation or divorce in which the financial outcome could be impacted by domestic or economic abuse (or you have any other questions relating to a family law matter), please contact our hugely experienced family barristers today.