Analysing legal responses to coerced debt

Abstract

This paper analyses legal responses to the problem of debt taken out due to coercion within an intimate relationship. Coerced debt differs from other forms of domestic abuse, as it involves a contractual relationship between the victim and a third-party lender. Legal responses must consider whether the victim should be released from her contractual obligation. The paper employs a theoretical lens of vulnerability and relationality, examining lenders’ duties to combat coerced debt, as well as contractual doctrines of undue influence and duress, which allow victims to have transactions set aside under certain circumstances. The paper argues that victims are being failed by an inadequate legal response. The law views vulnerability as an exceptional state and relationality as a constraint, rather than inherent features of the human condition. Through the social construct of the ‘free market’, lenders are consistently favoured by the law, with little obligation to ensure that transactions are free from coercion. The paper concludes with a call for the state to take greater responsibility for coerced debt and to allocate the risk differently than it currently does. This will promote higher levels of resilience for victims and allow them to escape abusive relational contexts.