Bilta (UK) Ltd & Ors v SVS Securities PLC & Ors

When deciding whether similar-fact or collateral evidence should be admitted, the court must first ask whether it is potentially probative of an issue. If so, the court must then consider whether case-management factors justify excluding it. Relevant factors include the risk of distorting the trial, unfair prejudice, proportionality, expedition, and the burden of disclosure and investigation.

Amendments may be permitted where later conduct could materially illuminate the central issue and the resulting burden is proportionate. However, pleadings should not create a fishing expedition or widen disclosure beyond the evidence supporting the pleaded case.

The claimants sought permission to amend their particulars of claim and an order for disclosure in proceedings concerning alleged dishonest participation in VAT fraud involving European Union Emissions Trading Scheme allowances. They relied principally on later trading between SVS and Deutsche Bank, including trading connected with Germany, as evidence of dishonesty during earlier United Kingdom trading.

The court considered whether the proposed amendments had sufficient probative value to justify their cost and procedural consequences, whether references to a German criminal judgment were permissible, and whether further disclosure should be ordered before standard disclosure.

1. Similar-fact evidence and case management. The court applied the two-stage approach described in JP Morgan Chase Bank v Springwell Navigation Corporation [2005] EWCA Civ 1602. The proposed material had first to be potentially probative of an issue. If it passed that threshold, the court retained a case-management discretion, informed by trial distortion, unfair prejudice, proportionality, expedition, and the burden of disclosure and investigation.
2. Permission to amend. Permission was granted for allegations concerning German trading in August and September 2009. The material was potentially capable of casting light on Deutsche Bank’s honesty during the earlier United Kingdom trading, and confining the period materially reduced the risk of disproportionate disclosure and trial disruption. A comparable allegation against Mr Virk and Mr Fox was also permitted.
3. Limits on the amendments. References to the German criminal judgment were excluded. The judgment could at most be a source of evidence and should not itself be pleaded as substantive evidence. The opening words of paragraph 58A had to be narrowed to the specific matters supported by the pleaded sub-paragraphs. Sub-paragraphs (9) onwards were excluded because their evidential significance was limited while their later dates could substantially enlarge disclosure and distract the trial.
4. Disclosure. No order was made on the disclosure application. Standard disclosure was to proceed on the basis of the amended pleadings, with any remaining disclosure issues to be addressed afterwards. The court emphasised that neither an overburdened trial nor inadequate scrutiny of the allegations was acceptable.