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Recognising financial abuse in a relationship

The Telegraph has posted an interesting article on financial/economic abuse, and how to recognise when you are in such a relationship.

In England & Wales, such behaviour can result in criminal prosecutions. Under the Domestic Abuse Act 2021, domestic abuse includes economic abuse, which means any behaviour that has a substantial adverse effect on the other person’s ability to acquire, use or maintain money or other property, or obtain goods or services. The two people must be ‘personally connected’, which is widely defined and can include, as well as married couples and civil partners, any intimate personal relationship, and a parental relationship in relation to a child.

Where there are reasonable grounds for believing that there has been economic abuse, or risk of such abuse, and it is necessary to protect the individual, the police can give a Domestic Abuse Protection Notice to the abusive party. The notice may prevent the abuser from contacting the person or coming within a specific distance of any premises. This can be helpful for example in cases where the abuser does not allow the victim to go to work. If the economic abuse continues, it may be recognised as controlling or coercive behaviour, which is a criminal offence under the Serious Crime Act 2015.

Relevant behaviour in this context can include control of finances such as only giving the victim a punitive allowance, coercing them to take on debt, checking receipts, and controlling spending/bank accounts/investments/mortgages etc. It can also include preventing the victim from working and earning an income. Behaviour of this nature can result in a prison sentence.

Unfortunately Hong Kong does not have clear legislation on economic abuse which is equivalent to that in England & Wales, despite such abuse being a tactic frequently used in intimate partner violence, and which can lead to significant distress and mental health issues for the abused individual.

The Domestic and Cohabitation Relationships Violence Ordinance in Hong Kong requires some form of ‘molestation’. Although molestation has been widely interpreted by the courts to go beyond violence and threats of violence, and can include verbal abuse, and stalking/monitoring of movements and communications, there is not as yet any case-law where it has been applied in cases of economic abuse. Further, where injunctions are granted by the Court under this legislation, no authorisation of arrest can be attached unless the Court is satisfied that the person has caused, or is likely to cause, actual bodily harm (which may not apply in cases of economic abuse).

These types of cases are particularly difficult, especially for victims wishing to leave the abusive relationship. Whilst the perception may be that this sort of behaviour occurs more often in low-income families, that is not always the case.

There are  many cases where one party is earning a very significant income, but they are exerting financial control on the other spouse. This happens frequently upon the onset of divorce proceedings.

It is important in these cases to try to secure early legal advice. This is because the Hong Kong Court has the power to make orders for interim financial support, and legal fees funding if necessary for the benefit of the victim of such economic abuse. 

Another important factor is that the longer the financial control is allowed to continue, the harder it may be for the victim to demonstrate to the Court what their reasonable financial needs are (in the context of divorce proceedings). When putting together their ‘budget’ in the course of financial proceedings, the victim will have to show the Court what sum they require to meet their needs on a daily basis. If their spending has been severely curtailed over an extended period of time by the other spouse, it may prove difficult to find evidence of prior, normal, expenditure. In that case, there is a risk that any financial award to meet the needs of the victim will be less than it would have been without the economic abuse. 

Financial abuse can be wide-ranging, and can even include emptying joint bank accounts or refusing to keep up payments on a mortgage. If there is any such behaviour going on, it is a sign that things are not right. 

In addition to legal advice, it is essential to have support from an expert therapist or psychologist who can help the victim recognise and come to terms with what has happened, and help them move forwards free from the abusive relationship.

Vanessa Duff is a Family Partner in our Hong Kong Office. 

'Financial abuse can start gradually with seemingly appropriate requests for money or sensible suggestions to deal with the finances, before leading to a pattern of behaviour that’s difficult to see'.

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