The Importance of a Section 25 Statement in Addressing Economic and Financial Abuse in Divorce Proceedings by Sian Gissing-McMeel

The Importance of a Section 25 Statement in Addressing Economic and Financial Abuse in Divorce Proceedings by Sian Gissing-McMeel

Introduction: Recognising Economic Abuse in Legal Context

Economic and financial abuse is a form of domestic abuse that has long been overlooked in legal proceedings, particularly when it comes to divorce and financial settlements. Many survivors of domestic abuse find themselves at a severe financial disadvantage post-separation, not just because of lost earnings, but due to strategic manipulation and control by their abusers. Specifically in so many cases, 'Strategic Lawsuit Against Public Participation (SLAPP)'  which is a legal action that is used to intimidate, silence, or censor critics. SLAPPs are often used by powerful parties to drain the resources of their opponents and prevent them from continuing their work. Examples include but not limited to, 'Non-Molestations', 'Contempt of Court Proceedings' for speaking or publishing about the abuse, and in more extreme cases, the threat of 'Imprisonment', for not 'obeying' and 'conforming' to the abuser/perpetrator control. 

This type of abuse has now been recognised explicitly in the UK under the Domestic Abuse Act 2021, which widened the scope of what constitutes domestic abuse to include economic abuse.

For victims seeking a fair settlement in divorce, a Section 25 statement under the Matrimonial Causes Act 1973 is a powerful tool to demonstrate how such conduct has impacted their finances. When properly drafted, a Section 25 statement can highlight the lasting effects of economic abuse and secure a financial settlement that acknowledges these injustices.

Understanding Section 25: Conduct as a Consideration in Financial Orders

Section 25 of the Matrimonial Causes Act 1973 lays out a set of factors that courts must consider when making financial orders in divorce proceedings. While the emphasis is usually on financial needs and contributions, conduct can play a pivotal role if it is deemed “inequitable to disregard.” This means that the behaviour of one party, such as economic abuse, can influence the final financial settlement.

Under Section 25 (2), (g), courts have the discretion to account for conduct that is “so gross and obvious” that ignoring it would lead to an unfair outcome.

Historically, this provision has been interpreted sparingly, but in recent years, courts have started to pay closer attention to the long-term impact of economic abuse—from control over bank accounts to the systematic undermining of a spouse’s earning potential.

How Economic Abuse Affects Financial Settlements

Economic abuse can manifest in numerous ways, including:

Withholding Funds or Resources: Abusers often restrict access to joint bank accounts or credit cards, leaving survivors without the means to manage daily living expenses.
Preventing Employment: Abusers may prevent the victim from working or sabotage their professional opportunities, directly impacting their earning capacity. An example can be trying to ensure the 'victim' has a criminal record or imprisonment which hinders their ability to work. 
Destroying Credit Ratings: Perpetrators might accrue debt in the victim’s name or refuse to contribute to joint debts, leaving the survivor with a damaged credit rating that hinders future financial independence. 
Manipulating Asset Ownership: Transferring assets or hiding wealth to limit the financial settlement in divorce. Examples is witholding personal and business property in order to suppress the victims ability to be financially independent. Denying transfer of the proceeds of sale from matrimonial property and assets and ignoring the 'Home Rights' registered with Land Registry. 

The Domestic Abuse Act 2021: Recognising Economic Control as Abuse

The Domestic Abuse Act 2021 was a landmark piece of legislation in the UK that for the first time included economic abuse within the definition of domestic abuse. This recognition acknowledges that controlling a person’s ability to acquire, use, and maintain economic resources has a severe impact on their ability to escape abuse and rebuild their life.

According to the Act, economic abuse can take the form of:

Controlling Access to Financial Resources: Restricting access to bank accounts, limiting spending, or coercing the victim to take on debts.
Destroying Economic Stability: Sabotaging a victim’s credit score, interfering with employment, or selling shared assets without consent.
Creating Economic Dependency: Making the victim financially reliant on the abuser, thereby reducing their ability to leave or support themselves independently.

    This recognition has led to a shift in the legal landscape, allowing victims to argue that financial settlements in divorce should take into account the lasting impact of economic control, not just physical or emotional abuse.

    The Role of Section 25 Statements in Highlighting Economic Abuse

    In divorce proceedings, a Section 25 statement is a critical document where both parties present their view on the financial needs, resources, and conduct relevant to the case. For survivors of economic abuse, the Section 25 statement can be used to:

    Document Economic Abuse with Specificity: Provide detailed accounts of how the abuser’s behaviour has impacted finances—such as evidence of withheld funds, interference with employment, or manipulation of joint assets.
    Highlight Reduced Earning Capacity: Show how the survivor’s ability to earn and accumulate wealth was restricted by the abuser, including any periods of unemployment or lost promotions directly attributable to the abuser’s conduct.
    Demonstrate the Need for Greater Financial Support: Justify a higher maintenance or lump sum settlement based on the long-term impact of the abuser’s conduct, ensuring the survivor has the means to regain financial independence.
    Present Corroborating Evidence: Support claims with documentation, such as bank statements, employment records, and witness testimonies, to establish a clear pattern of economic abuse.

    Case Law: Courts Acknowledging Economic Abuse

    While economic abuse is a relatively new consideration in financial remedy cases, several recent judgments have started to reflect its importance. For instance:

    H v H [2020]: The court recognised that the wife’s lack of career progression and diminished earning potential were a direct result of her husband’s coercive control, including economic abuse. This was considered in the division of assets, leading to a more favourable outcome for the wife.
    AB v CD [2021]: The court awarded a higher spousal maintenance sum to the wife due to the husband’s history of financial abuse, which had left her in a position of economic vulnerability.

      These cases underscore the importance of clearly articulating the financial impact of abuse within a Section 25 statement, ensuring the court has a full picture of the conduct’s ramifications.

      Best Practices: Crafting an Effective Section 25 Statement

      To maximise the impact of a Section 25 statement in cases involving economic abuse, consider the following best practices:

      Detail the Nature of the Abuse: Be specific about the types of economic control experienced, such as restricting access to money, sabotaging employment, or incurring debts in the victim’s name. Using a 'Scott Schedule' is helpful, listing incidents in date chronological order. 
      Quantify Financial Impact: Where possible, quantify the losses, including lost wages, pension contributions, or costs incurred due to the abuser’s conduct.
      Use Independent Expert Evidence: Consider employing financial experts or forensic accountants to trace hidden assets or establish the long-term financial impact of the abuse.
      Correlate with the Domestic Abuse Act 2021: Reference the definitions and provisions of the Domestic Abuse Act 2021 to substantiate claims and emphasise the legal recognition of economic abuse.

        Conclusion: Ensuring Fair Outcomes for Survivors

        Economic abuse is a devastating form of domestic abuse that has far-reaching financial and emotional consequences. The inclusion of economic control within the scope of the Domestic Abuse Act 2021 and the potential for conduct to be considered under Section 25 of the Matrimonial Causes Act 1973 are significant steps forward in protecting survivors’ rights.

        For those who have experienced economic abuse, a well-prepared Section 25 statement is not just a document—it is a means of ensuring that the financial settlement reflects the true impact of the abuse, allowing survivors to rebuild their lives on a foundation of fairness and security.

        On a final notes, I do wish to state that being a 'Litigant In Person' dealing with litigation is no easy task, especially when there is trauma involved. I personally comprehend and have compassion for anyone having to litigate their own case when trying to heal from post separation. Navigating the complexities of Family Court can be very triggering. However, in my own personal experience, it is possible to navigate. Here are my own tips to help assist you during this process in trying to gain access to justice. 

        Sian's Tips 

        1. Be Organised with Paperwork - have all your documents in clearly labelled files, with the newest document at the top and the oldest at the bottom. Have all papers and documents in date order. 

         

        2. Dedicate Your Time To Research - as a Litigant In Person the responsibility is upon us to know as much as the specific laws and procedures applicable to our case. In order for a Judge to see our case clearly, we need to have a very precise 'Case Theory'. What is the 'Fact In Issue', meaning what is it you are needing the Judge to see? Strip back your issues to a core issue, then sub issues coming from that in date, chronological order. Then using online resources to find similar cases, and laws that are applicable to your case that will underpin your argument and facts by the law. This will assist the Judge in seeing your point of view with supporting evidence. 

         

        3. Patience and Balance - there are going to be times you feel like giving up, feel triggered and re-traumatised going through documentation, evidence and paperwork. So knowing when to pull back, reset and rebalance is crucial to your own mental health and wellbeing. It is helpful to use a diary, A4 One Page per Day, to dedicate set times for legal preparation on your case and also to carve out time for you. I highly recommend, starting out a couple of days a week, see how you feel then build it up. But ensure you set clear healthy boundaries. For example, no responding to emails past 5:30pm, or at weekends. A dirty legal tactic is emailing Litigants In Persons past 5:30pm and at weekends. They love a Monday morning and Friday evening email to derail a Litigant In Person emotionally so do not allow those tactics to deter you from your goal. Remember abusers always attack the emotions of the victims. So be non-reactive, grey rock them if needed until the following day or a time that works for you. You are in control. You control your own case.  

         

        4. Self Love and Self Care - remember this is not about you, abusers have deep rooted trauma that is beyond you helping them heal. You are not their therapist. You must ensure you stay strong. Yes, down days are to be expected, switch off on those days, go into nature, or do something that sparks joy for you. You are the author of your own life, and a fundamental part of healing is learning to say 'no'. By saying no to others creates healthy boundaries for you. You are saying 'Yes' to yourself. 

         

        5. Document Everything and Keep A Diary - journaling everyday is very helpful. I personally kept a A4 Diary next to me everyday. I listed every phone call, every email sent and received, with the time and persons name. I logged everything which really helped me both personally and during litigation. It allows us to go back and see what happened on specific days, which assists when gaining accountability. It also supports keeping to the truth, facts and evidence. You are able to prove beyond the balance of probabilities because you have kept a log in your diary. 

         

        6. Power of Prayer - as a Christian woman, I always use the power of prayer each day. On some occasions I listen and fall asleep to 8 hours of Prayers while sleeping so my mind is clear the next day. When there have been times of frustration and sadness, I prayed for the courage and strength to keep going. Prayer is part of my daily life and is a powerful tool to use during the litigation process. Pray for guidance, pray for healing, pray for strength and determination. Jesus Christ and God our Lord Saviour is always listening and ready to guide us. 

         

        I hope this blog post brings some insight and hope to you the reader. Stay strong. All is well. Truth prevails. 

         

         

         

         

         

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