John Szepietowski considers what is economic abuse in financial remedy proceedings?
Many clients have little or no detailed knowledge of their financial situation. One in 6 women in the UK, has experienced economic abuse by a current or former partner. Most clients know nothing other than the spending allowance they’re given by their spouse.
Definition of economic abuse:
Economic abuse is legally recognized as a form of domestic violence and is defined in the Domestic Abuse Act 2021. Economic abuse means any behavior that has a substantial adverse effect on another person’s ability to acquire money, property, goods and services.
For example, if person ‘A’ prevents person ‘B’ from having access to any bank accounts or monetary income and only provides a spending allowance. The abuse can take a variety of forms but usually includes restricting a party’s access to financial information and controlling how those financial resources are utilized. Additionally, economic abuse rarely happens in isolation and usually occurs alongside other forms of abuse, including physical, sexual, and psychological abuse. This type of abuse creates financial instability and makes one partner economically dependent.
An abuser might do the following:
- Prevent you from being in education and employment.
- Take your pay.
- Dictate what you buy.
- Check your receipts.
- Take children’s savings or birthday money.
How does economic abuse impact divorce?
Where economic abuse is a factor, getting financial disclosure from the opposing party may prove to be a battle as they will often continue to conceal and control assets. Also, the victim of the abuse may find it challenging to obtain financial information as the abuser will have control over bank accounts.
There are some legal tools to challenge inadequate disclosure, for example by raising a questionnaire, instructing experts, and obtaining third-party disclosure.
Notable case involving economic abuse: DP v EP [2023] EWFC 6
An important factor of the case is that the husband was illiterate and for the entirety of the marriage depended on the wife to manage the accounts for their benefit. The husband’s position was that the wife exploited his illiteracy by transferring funds which belonged to him.
The husband invited the judge:
- To add back certain items, he alleged his wife has recklessly dissipated.
- To draw negative inferences towards the wife for concealing assets
- To find that the wife’s conduct amounted to economic abuse.
It was found that the wife’s conduct amounted to economic abuse under the Domestic Abuse Act 2021.
For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email admin@audleychaucer.com or visit our Linkedin page.
This information was correct as of October 2023