SIMILAR FACT EVIDENCE IN FRAUD CASES

By Tim Kevan, 1 Temple Gardens and Duncan McNair, Equity House Chambers)

1.  Introduction

To enhance allegations that a claim is fraudulent, a party may look beyond the specific incident or claim under review, and explore wider activity to which the current incident / claim can be connected, for example:

• Previous similar claims by the same claimant
• Identical claims presented by family / associates / of the claimant
• Claims following the same pattern with common connecting features

The key focus in any action will always remain on whether there is admissible evidence to support a contention that the claim under review is fraudulent.  However, if such additional matters can be linked then, to enhance the primary evidence, a court may also be invited to accept a hypothesis that if one or more of the claims following the same / similar pattern is fraudulent, then the others may be equally fraudulent.

This line of argument is often applied in relation to multiple connected claims, or fraud rings, where the volume and similarity of connected claims may potentially be as overwhelming as the direct evidence on each case itself.  In essence, the court is invited to consider similar fact evidence.

2.  Admissibility

The principles regarding the admissibility of similar fact evidence lie in both criminal and civil law. Those principles derive from common law and, having evolved relatively little for many years, have recently received fresh attention. Whilst the evolution of the law in this field is in itself complex, the rules themselves are relatively simple.

As a phenomenon of common law, there is no strict definition that can be applied to the civil arena of what will amount to similar fact evidence.  However, recent codification in the criminal arena via the Criminal Justice Act 2003 provides some guidance and in particular sections 101 and 103 which potential may be used by analogy.  However, in the absence of a strict statutory definition specifically applicable to the civil arena, it is necessary to look to the common law itself – which provides not only a definition but the circumstances in which similar fact evidence can be applied and the tests that the courts will apply when considering this issue.

Although it is criminal cases that have seen the primary evolution of the law relating to similar fact evidence, civil case law has evolved alongside it.  In Music Publishing Co Ltd –v- De Wolfe Ltd [1976] Ch 119, a breach of copyright claim involving the issue of whether evidence that the Defendant had in the past published music resembling material protected by copyright could was admissible as similar fact evidence, Lord Denning MR gave useful comment upon the ongoing applicability of similar fact evidence to civil proceedings :

" In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side: and also that the other side has fair notice of it and is able to deal with it."

This emphasises the requirement that the similar fact evidence be “logically probative” and that importance of the question of prejudice or oppression.

The most recent consideration by the civil courts of the issue of similar fact evidence, in O’Brien –v- Chief Constable of South Wales (2005) UKHL 26 saw the House of Lords give very detailed consideration to the issues and set out in a very detailed judgment the key principles relating to similar fact evidence in civil claims.  Not only did the House of Lords reconcile the criminal and civil evolution of this area of law, but provided very helpful guidance for use in civil claims, with Lord Phillips stating that :

 “The test of admissibility of similar facts against a defendant in criminal proceedings, as propounded in DPP v P and in the 2003 Act, requires an enhanced relevance or substantial probative value because, if the evidence is not cogent, the prejudice that it will cause to the defendant may render the proceedings unfair.

The test of admissibility builds in protection for the defendant in the interests of justice. It leads to the exclusion of evidence which is relevant on the ground that it is not sufficiently probative. So far as evidence of bad character that the defendant wishes to adduce against a police witness, the test of admissibility in both Edwards and section 100 of the 2003 Act requires an enhanced relevance in order to ensure that the ambit of the trial remains manageable.
I can see no warrant for the automatic application of either of these tests as a rule of law in a civil suit.

To do so would build into our civil procedure an inflexibility which is inappropriate and undesirable. I would simply apply the test of relevance as the test of admissibility of similar fact evidence in a civil suit. Such evidence is admissible if it is potentially probative of an issue in the action.”
The admissibility of similar fact evidence in a civil action will therefore be determined simply on whether that evidence is probative to an issue in the action.  If so then, subject to consideration of procedural and case management issues, it is likely that the similar fact evidence a party seeks to rely upon may will be deemed admissible.

With reference to fraudulent claims therefore, similar fact evidence relating to any of the scenarios detailed at the outset of this chapter would potentially be admissible as long as the similar facts themselves, and the evidence confirming those similar facts, is relevant and probative to the key points in issue in the claim under review.

3.  Weight

That said, the effectiveness of the similar fact evidence itself will depend entirely on the facts in question and it’s relevance to the key points in dispute. Realistically, as C Tapper states in Cross & Tapper on Evidence at page 345 :
“..it is only where there is a large number of incidents that the argument will succeed in the absence of close similarity of detail”

This indicates that the degree of similarity between individual events will be proportionate to the number of occurrences. In all probability the more occurrences of such similar facts / events, the less similarity of precise detail will be needed; whereas conversely  for small number of similar events / facts the similarity in detail will need to be much tighter.

4.  Case Management

As to the question of how the Court would manage the issue of a party seeking to rely upon similar fact evidence, Lord Phillips again provides very helpful guidance, and unsurprisingly suggests that the Criminal Justice Act can be used as a reference point in the case management of civil claims, suggesting that:
“This is not to say that the policy considerations that have given rise to the complex rules of criminal evidence that are now to be found in sections 100 to 106 of the 2003 Act have no part to play in the conduct of civil litigation. They are policy considerations which the judge who has the management of the litigation will wish to keep well in mind. CPR 1.2 requires the court to give effect to the overriding objective of dealing with cases justly. This includes dealing with the case in a way which is proportionate to what is involved in the case, and in a manner which is expeditious and fair. CPR 1.4 requires the court actively to manage the case in order to further the overriding objective. CPR 32.1 gives the court the power to control the evidence. This power expressly enables the court to exclude evidence that would otherwise be admissible and to limit cross-examination.

Equally, when considering whether to admit evidence, or permit cross-examination, on matters that are collateral to the central issues, the judge will have regard to the need for proportionality and expedition. He will consider whether the evidence in question is likely to be relatively uncontroversial, or whether its admission is likely to create side issues which will unbalance the trial and make it harder to see the wood from the trees”
On this basis, it would seem clear that the Court will seek to consider the impact of a party seeking to rely upon similar fact evidence at an early stage, and ensure that suitable case management directions are set to enable the trial judge to deal with trial expeditiously, fairly and proportionately.

5.  Use of witness statements for other purposes

One issue to bear in mind when considering the use of similar fact evidence is the effect of CPR 32.12 which provides under the heading ‘Use of witness statements for other purposes’:

 (1)      Except as provided by this rule, a witness statement may be used only for the purpose of the proceedings in which it is served.
(2)       Paragraph (1) does not apply if and to the extent that -
(a)       the witness gives consent in writing to some other use of it;
(b)       the court gives permission for some other use; or
(c)        the witness statement has been put in evidence at a hearing held in public.

6.  Conclusion

The recent guidance provided in O’Brien is welcome in this area.  With increasingly sophisticated investigations and use of data this issue is only likely to become more important.  In the meantime, any party seeking to rely upon similar fact evidence in civil proceedings should consider the issue at the earliest possible point in the preparation of their case.  Once proceedings follow, the party seeking to rely upon that evidence should aim to assist the procedural judge as much as possible in terms of case management to reflect the intended use of similar fact evidence at trial.