Can you get back what your partner has spent on drugs, alcohol or gambling? We explore ‘add back’ and when it may apply.
‘Add Back’ is the method used by the Court in financial proceedings to compensate parties for loss caused by the other party’s financial misconduct.
The Court will only do this in instances where it believes there has been a “wanton dissipation of assets”, which was stated in Vaughan v Vaughan  EWCA Civ 1085
Further case law has explained the position and we examine MAP v MFP  EWHC 627 (Fam) to find out more:
The husband and wife in this case had been married for forty years. Together they had built up a successful business worth circa £23m. The husband was managing director and the wife was credit controller and company secretary.
The husband was addicted both cocaine and alcohol but had attended multiple rehabilitation programmes. The wife alleged that he spent £6,000 a week on cocaine and alcohol alone, as well as significant sums on prostitution.
After separating the husband sacked the wife from the company. This left her without a salary, without payment of dividends and now ineligible for entrepreneur’s relief on her shareholding.
The wife sought 50% of the assets and argued for an ‘add back’ of £1.5m which would mean that the pot would be £1.5m greater than previously specified. When dividing the assets, the husband would be deemed to have already had the £1.5m. She claimed the money spent by the husband on drugs, alcohol and prostitutes was “reckless and wanton expenditure”.
The wife succeeded in securing payments for entrepreneurial relief she would have been entitled to had she not been sacked, the dividend her husband had unreasonably withheld and a settlement for any potential unfair dismissal claim she may have under employment law.
However, she failed in her add-back argument regarding the money spent on the husband’s addictions. The judge did not add back the spent £230,000 on drugs therapy as the husband was addicted and this was for his treatment; or the c.£250,000 the husband had spent on drugs and prostitutes.
The judge, Justice Moor, stated that a spouse must take their partner as they find them:
“it would be wrong to allow the wife to take advantage of the husband’s great abilities that enabled him to make such a success of the company while not taking the financial hit from his personality flaw that led to his cocaine addiction… It may have been morally culpable. Overall, it was irresponsible. But I find that this was not deliberate or wanton dissipation”.
This case is a reminder that ‘add back’ claims only succeed in exceptional cases, where it can be demonstrated the financial misconduct was ‘wanton’. Clients should be advised that any such claim could be costly litigation without guaranteed success.
Financial remedies – Add-back – Conduct of the husband – Husband had drug and alcohol addictions – Wife dismissed from family company