JP Morgan Chase Bank & Ors v Springwell Navigation Corporation

Similar fact evidence is legally admissible if, alone or with other evidence, it could render a fact in issue more probable. It need not prove that fact by itself.

Admissibility does not determine whether the evidence should be received. The court may exclude relevant evidence where collateral inquiries would disproportionately increase cost, delay and complexity or prevent the opposing party from answering it fairly. The overriding aim is a fair process which promotes the ends of justice.

Springwell Navigation Corporation alleged that JP Morgan Chase Bank and its affiliates had acted as investment advisers and caused substantial losses through investments in Russian and other emerging-market securities. Chase sought declarations that it bore no liability.

Springwell wished to rely on Chase’s dealings with other Greek shipping families as similar fact evidence of an advisory relationship and of advice to purchase Russian securities. Gloster J struck out the relevant paragraphs of the amended defence and counterclaim and excluded that evidence: [2005] EWHC 383 (Comm).

The issue on appeal was whether the evidence was potentially probative and, if so, whether its admission should nevertheless be refused through the court’s case-management powers.

1. Appeal dismissed. The judge’s order striking out the similar-fact pleas and excluding the proposed evidence was upheld, although the Court of Appeal differed from her reasoning on relevance.

2. The judge had set the relevance threshold too high by effectively requiring the evidence concerning other Greek families to prove, standing alone, the nature of the relationship between Springwell and Chase. Evidence is relevant where, either by itself or in conjunction with other facts, it proves or renders a fact in issue more probable. Similar fact evidence characteristically performs the latter function.

3. Depending on its content, evidence about Chase’s dealings with other Greek families could explain, illuminate or place in context otherwise ambiguous evidence about its relationship with Springwell. It was therefore potentially relevant and passed the first stage of the admissibility test. Its likely assistance was nevertheless limited because the parties’ own dealings were documented extensively. The proposed evidence would matter only if the primary evidence left the court in doubt and the evidence concerning other families yielded sufficiently clear and reliable conclusions.

4. Under the two-stage approach in O’Brien v Chief Constable of South Wales [2005] UKHL 26, potentially probative evidence is legally admissible, but the court may decline to receive it through its case-management powers. Relevant considerations include distortion of the trial by collateral issues, unfair prejudice, the burdens of disclosure and trial preparation, proportionality, expedition and procedural fairness.

5. The relationships between Chase and the other families were themselves likely to be controversial. Chase could not fairly be required to accept limited oral accounts of those relationships without examining the associated documents, recordings, investment histories and surrounding dealings. Springwell could restrict the evidence it advanced, but could not thereby deprive Chase of a proper opportunity to answer it.

6. Admission therefore threatened either to overburden the trial with two additional disputes or to prevent effective scrutiny of the collateral allegations. Neither course was acceptable. The proposed evidence was excluded and the judge’s order upheld.

1. Court of Appeal (Civil Division): The appeal was dismissed. The order excluding the similar fact evidence was upheld, although the court held that the evidence was potentially relevant.
2. High Court, Commercial Court: Gloster J struck out four paragraphs of the amended defence and counterclaim and excluded the proposed evidence under CPR 3.4(2) and the court’s inherent jurisdiction: [2005] EWHC 383 (Comm).