Sources of law - Development of case law: the doctrine of pr...

Learning Outcomes

This article explains the doctrine of precedent in English law, focusing on how judicial decisions create binding rules that guide the courts and other actors in the legal system. It covers the principle of stare decisis, the hierarchy of judicial authority across different courts, and the careful distinction between binding ratio decidendi and persuasive obiter dicta. You will also be able to distinguish between binding and persuasive precedents, understand how precedent applies within the appellate structure and at first instance, and describe the principal mechanisms by which courts can distinguish, overrule, or otherwise modify established authority. The interrelationship between case law and legislation, and the special status of EU law and retained EU law, are explored to illustrate how precedent operates in the dynamic context of English law.

Key areas addressed include:

• The way case law forms a key source of law in England and Wales, both historically and in current practice
• How the hierarchy of the courts determines which precedents are binding and upon whom
• The doctrinal basis (including stare decisis) and their rationales: certainty, consistency, efficiency, and fairness in legal decision-making
• The techniques used by courts to respond to change while preserving continuity in the law, especially distinguishing and overruling
• The practical application of precedent in both civil and criminal contexts, including worked examples and scenarios to illustrate how the doctrine operates in real disputes
• The influence of recent constitutional changes, devolution, and the development of retained EU law on the system of precedent in the UK

SQE1 Syllabus

• the doctrine of precedent and the principle of stare decisis
• the difference between binding and persuasive precedent
• the roles of ratio decidendi and obiter dicta in judgments
• how precedent operates within the court hierarchy
• circumstances in which courts may distinguish or overrule previous decisions
• how consistency and legal development are maintained within the doctrine of precedent
• recognition of precedent’s relevance post-Brexit
• operation of precedent in relation to retained EU law and the hierarchy of legal sources

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the principle of stare decisis and why is it important in English law?
2. Which part of a judgment is binding on future cases: ratio decidendi or obiter dicta?
3. Can the Court of Appeal depart from its own previous decisions? If so, in what circumstances?
4. What is the difference between binding and persuasive precedent?

Introduction

The development of case law through judicial decisions is central to the English legal system. The doctrine of precedent (or stare decisis) requires judges to apply the reasoning and legal rules of earlier decisions to new cases with similar facts. This principle plays a fundamental role in maintaining consistency and predictability in law, allowing individuals, businesses, and public bodies to understand their rights and obligations and to order their affairs accordingly.

Precedent enables the law to change over time, balancing the need for stability with the capacity for legal development and reform. Even where Parliament is the supreme law-making authority, case law fills gaps, interprets legislation, and responds to new situations until and unless displaced by statutory intervention. The doctrine of precedent not only serves as a source of law in its own right, but also ensures the coherent application of judicial, legislative, and—more recently—retained European Union law within the broader legal system of England and Wales.

The Principle of Stare Decisis

Key Term: stare decisis
Stare decisis is the principle that courts must follow previous decisions when the same legal point arises, ensuring consistency in the law.

The principle of stare decisis ("to stand by things decided") is central to the doctrine of precedent. It ensures that like cases are treated alike, promoting certainty, equality before the law, rule of law values, and confidence that legal outcomes will not be arbitrary. The doctrine mandates that when a higher court has decided a point of law in a previous case, lower courts—and often the same level of court—are expected to follow that legal reasoning in subsequent cases where the facts are materially similar.

Stare decisis operates in both vertical and horizontal dimensions:

• Vertical stare decisis requires lower courts to follow the decisions of higher courts in the hierarchy. For example, the High Court must follow the precedents of the Supreme Court.
• Horizontal stare decisis involves courts adhering to their own previous decisions. Some courts (notably the Supreme Court) may depart from their own decisions only in limited circumstances; others, like divisions of the High Court sitting alone, treat previous decisions as persuasive rather than binding.

This approach allows the law to develop predictably, but it is not so rigid as to stifle all change. On rare occasions, especially at the highest level, the interests of justice, changes in social understanding, or recognition of error allow established precedents to be revisited and overruled.

Judges have expressed the principle thus: “use of precedent is an indispensable basis upon which to decide what is the law.” Certainty and predictability are balanced with fairness and the need for legal adaptability.

Binding and Persuasive Precedent

Key Term: binding precedent
A binding precedent is a previous decision that a court must follow because it was set by a higher court or, in some cases, by the same court.

Not every previous decision is binding. For a precedent to be binding:

• The earlier case must have been decided by a court whose decisions are authoritative for the present court.
• The decision must form part of the reason for the decision in the earlier case (ratio decidendi).
• The material facts of the earlier and later cases must be sufficiently similar to require like treatment.

Binding precedents must be applied by all lower courts and by courts at the same level—subject to key exceptions where courts are permitted to depart from their previous decisions (e.g., the Supreme Court’s 1966 Practice Statement; exceptions for the Court of Appeal under Young v Bristol Aeroplane). In criminal matters, concern for individual liberty further broadens the scope for departure in the Court of Appeal (Criminal Division).

Key Term: persuasive precedent
A persuasive precedent is a previous decision that a court may consider but is not obliged to follow, such as decisions from lower courts or courts in other jurisdictions.

Persuasive precedents are legal authorities that are not strictly binding but may be taken into account because of their persuasive reasoning, their source, or their status in another legal system. Such authorities may include:

• Decisions by lower courts or courts in parallel jurisdictions.
• Obiter dicta from higher courts.
• Decisions from other common law jurisdictions (such as the Supreme Court of Canada, the High Court of Australia, or the Supreme Court of Ireland).
• Judgments from the Privy Council (especially when the panel includes Supreme Court justices from the UK).
• Academic writings and opinions, especially by leading judges or textbook writers.

The flexibility present in the doctrine of persuasive precedent is important. When no binding decision exists, or when persuasive reasoning from another source better fits the needs of changing law or contemporary social expectations, courts may adopt such authorities.

Ratio Decidendi and Obiter Dicta

Identifying what part of a judgment creates binding precedent is essential to understanding case law. Legal judgments may contain the court’s legal reasoning, statements of law, fact-finding, and statements not essential to the decision.

Key Term: ratio decidendi
The ratio decidendi is the legal reasoning or principle that forms the basis of a court's decision and is binding in future similar cases.

The ratio decidendi ("reason for the decision") is the rule of law or legal principle that decides the outcome of a case. It is only this part of the decision that constitutes binding precedent. The ratio is identified by examining:

• What legal issues were material and necessary to decide given the facts?
• What principle or rule did the court treat as decisive in resolving those issues?

In multi-member appellate courts, the ratio is drawn from the majority reasoning or, where reasons differ but overlap, from the lowest common denominator of the decisive judgments. The ratio is not always immediately apparent; subsequent courts often clarify or narrow the ratio found in earlier judgments.

Key Term: obiter dicta
Obiter dicta are comments or observations made by a judge that are not essential to the decision. They are not binding but may be persuasive.

Obiter dicta ("things said by the way") are incidental statements within judgments that do not form part of the necessary reasoning. They may include hypothetical arguments, illustrations, or alternative approaches suggested by judges. While not binding, such statements can be highly persuasive, particularly if they demonstrate sound reasoning or are made by senior judges.

Careful legal analysis is required to distinguish between ratio and obiter. The binding effect of a precedent depends on this distinction.

The Court Hierarchy and Precedent

The operation of precedent is inseparable from the hierarchy of courts in England and Wales. The doctrine of precedent is only effective if the authority of earlier decisions is related to the position of the deciding court in the court structure. The primary courts, from highest to lowest, are as follows:

• Supreme Court
• Court of Appeal (Civil Division and Criminal Division)
• High Court (three divisions: Queen’s Bench, Chancery, Family)
• Crown Court, County Court, Magistrates’ Court

The Supreme Court

The Supreme Court is the final court of appeal for all civil cases and most criminal cases in the UK, save for Scottish criminal appeals. Its judgments are binding on all lower courts. While the Supreme Court (and formerly the House of Lords) is generally bound by its own previous decisions for reasons of legal certainty and continuity, it may depart from its own earlier rulings if it considers it right to do so. This power was formally acknowledged in the 1966 Practice Statement (Judicial Precedent), allowing the House of Lords to depart from precedent “when it appears right to do so.” The Supreme Court exercises this discretion sparingly, prioritising certainty but allowing for development when following precedent would cause injustice, perpetuate error, or inhibit needed legal reform.

The Supreme Court also provides the final word in devolution cases and constitutional questions, resolving legal conflicts arising from acts of the devolved legislatures or governments.

The Court of Appeal

The Court of Appeal is divided into the Civil Division and the Criminal Division. Decisions of the Court of Appeal are binding on:

• The High Court and all subordinate courts
• Themselves, with exceptions as set out in Young v Bristol Aeroplane Co Ltd [1944] KB 718 (CA):
  • Where two previous Court of Appeal decisions conflict, the court may choose which one to follow.
  • Where a previous decision of the Court of Appeal has been overruled by the Supreme Court, it must follow the higher court.
  • Where an earlier Court of Appeal decision was given per incuriam (“through lack of care” or in ignorance of a relevant authority or statute).

In the Criminal Division, further flexibility exists. Concern for protecting liberty means that the court may depart from previous decisions if the law has been misapplied or misunderstood, even if none of the Young v Bristol Aeroplane exceptions strictly apply. This additional discretion reflects the gravity of criminal law and the risk to the liberty of the individual.

High Court

The High Court is both a court of first instance (trial court) and an appellate court. When sitting as a Divisional Court (hearing appeals), its decisions are binding on lower courts and normally on itself, unless an established exception applies. When sitting at first instance, individual High Court judges are not technically bound by their own or other single-judge decisions but often follow them for consistency.

Lower Courts

The Crown Court, County Court, Magistrates’ Court, and Family Court are considered inferior courts for precedent purposes. These courts are bound by superior courts but do not generate binding precedent. Their decisions are fact-specific and rarely cited for their legal reasoning, although on rare occasions a decision gains importance and is cited as persuasive authority.

Key Term: court hierarchy
The system that determines which courts are bound to follow which decisions.

Worked Example 1.1

A High Court judge is deciding a contract law case. There is a previous Court of Appeal decision on the same legal point. Must the High Court judge follow it?

Answer:
Yes. The High Court is bound by decisions of the Court of Appeal on the same legal issue.

European and International Courts

English courts must "take into account" the decisions of the European Court of Human Rights under section 2 of the Human Rights Act 1998, but are not bound by them. Since Brexit, pre-Brexit Court of Justice of the European Union (CJEU) decisions form part of retained EU law and are binding unless and until overruled by the Supreme Court or (in limited circumstances) the Court of Appeal. New post-Brexit CJEU case law is persuasive only.

The Privy Council

The Judicial Committee of the Privy Council, although not a domestic appellate court for England and Wales, is highly regarded. Its decisions are not binding in the UK but are often followed, particularly when the appeal panel includes current Supreme Court justices.

Distinguishing and Overruling Precedent

Precedent is not a straitjacket. The legal system incorporates several mechanisms allowing departure from past decisions in appropriate circumstances, thereby enabling the law to change sensibly and incrementally.

Distinguishing

Key Term: distinguishing
Distinguishing is when a court decides not to follow a precedent because the facts of the current case are sufficiently different from the earlier case.

If a court concludes that material differences exist between the facts of the current case and those in an earlier decision, it may distinguish the current case and decline to follow the earlier authority. The earlier precedent remains valid for cases on similar facts, but is not applied. The process of distinguishing allows necessary flexibility to avoid injustice, accommodate new developments, and respond to changes in values, technology, or social context.

Overruling

Key Term: overruling
Overruling is when a higher court decides that a previous legal principle established in an earlier case is incorrect and replaces it with a new principle.

A court may overrule a previous decision if it decides that earlier reasoning is unsound, outdated, or incompatible with modern values or higher authority. For example, the Supreme Court may overrule one of its own decisions or that of a lower court; the Court of Appeal may overrule a High Court decision. Overruling is only possible within the same jurisdiction or hierarchy; a lower court cannot overrule a higher court.

Overruling can be retrospective or, in rare cases, have prospective effect only (meaning it applies only to future cases).

Worked Example 1.2

The Supreme Court decides that a previous House of Lords decision on criminal liability was wrong. What is the effect?

Answer:
The Supreme Court overrules the earlier decision. The new legal principle is now binding on all lower courts.

Other Judicial Techniques

• Reversing: When a higher court on appeal in the same case changes the outcome by finding differently on the law than the lower court did.
• Applying: The court follows and applies the rule from an earlier case.
• Approving: The court endorses the reasoning in an earlier case, lending additional persuasive force.
• Obiter dictum adoption: Sometimes, a point made obiter in one case is subsequently applied as part of the ratio in a later case, thus becoming binding.

Applying Precedent in Practice

The practical application of precedent requires judges to:

• Identify any potentially binding decisions relevant to the issue.
• Analyse the factual similarities and differences between cases.
• Distinguish where material differences exist, or apply precedent where the facts match.
• Assess the status of a prior authority (binding, persuasive, or otherwise).
• Consider any exception or rule allowing them to depart from prior precedent.

If no binding precedent exists, the judge may decide the case as a matter of first impression, potentially creating new precedent for future guidance.

Key Term: follow
To apply the legal rule from a previous case as binding authority for a decision on similar facts.

Key Term: reverse
To overturn a lower court’s decision in the same case, often as a result of an appeal.

Key Term: overrule
To declare a previous judicial decision no longer good law, replacing it with a new rule.

Key Term: affirm
To confirm the correctness of a lower court’s decision.

Worked Example 1.3

A County Court judge is deciding a negligence case. There is a previous High Court decision on a similar issue, but the facts are not identical. What should the judge do?

Answer:
The County Court judge must follow the High Court decision unless the case can be distinguished on its facts.

Role of Precedent in Different Types of Law

Precedent supports the development of law in all fields—contract, tort, property, family, criminal, public, and administrative law. The importance and frequency of precedent vary; some areas, such as criminal law and tort, rely heavily on case law due to the range of factual situations that arise. In statutory interpretation, precedent governs how legislative terms are interpreted and ensures consistency in the application of statutes.

In public law, the courts’ role in reviewing administrative action (judicial review) has expanded, and precedents establish the principles controlling the legality of governmental acts.

Special attention is needed in areas affected by devolved legislatures, where UK Supreme Court guidance defines the constitutional parameters and the relationship between UK and devolved law.

Precedent and Legal Change

Precedent provides both certainty for individuals and the flexibility necessary for the law to respond to societal change. The technique of distinguishing allows for adjustment and development without the instability of wholesale destruction of earlier rules. Overruling, whether by high courts or by legislative reversal, ensures that errors or outdated doctrines can be corrected.

Legislation frequently interacts with precedent. Courts are bound to interpret and apply statutes over earlier common law, but when statutory language is unclear, judge-made precedent fills gaps and interprets ambiguities. Parliament may also reverse, codify, or clarify judge-made rules through statutory intervention.

The rise of judicial review, the incorporation of human rights law through the Human Rights Act 1998, and devolution have all given the courts new roles in developing and interpreting legal principles through precedent, particularly regarding constitutional and public authority questions.

Precedent after Brexit

The UK's withdrawal from the EU has substantially altered the effect of EU law and decisions of the Court of Justice of the European Union (CJEU) in the English legal system.

• Retained EU law refers to EU law which was in force in the UK at the end of the transition period. Under the European Union (Withdrawal) Act 2018, this body of law was carried over into domestic law.
• Decisions of the CJEU made before exit day are now part of retained EU case law and, for most courts, are binding authority in the same way as Supreme Court or Court of Appeal decisions would be.
• The Supreme Court and, in some cases, the Court of Appeal (and equivalent courts) have statutory power to depart from retained EU case law "when it appears right to do so." This power is similar to—but not identical with—that recognised in the 1966 Practice Statement.
• Decisions of the CJEU made after the transition period are not binding but may be treated as persuasive authority if relevant.

Where retained EU law or retained EU case law is in play, lawyers and courts must determine the hierarchy of related domestic and CJEU-derived authorities and apply the appropriate rules of precedent, including the potential for departure at the highest levels under statutory standards. In cases where UK law has diverged from EU law following Brexit, older CJEU authority may be of limited persuasive value.

Key Term: retained EU law
Retained EU law refers to the body of EU law which continued to have effect in the UK after Brexit under the European Union (Withdrawal) Act 2018, including relevant CJEU case law as it stood at the end of the transition period.

Exam Warning

The rules on when UK courts may depart from retained EU case law are complex and subject to statutory modification. For SQE1, focus on the primary rule: only the Supreme Court (and, for certain categories of retained EU law, the Court of Appeal and some other higher courts) may depart from retained EU case law, and then only where there are good reasons to do so. Lower courts must treat retained EU case law as binding unless and until overruled.

Key Point Checklist

This article has covered the following key knowledge points:

• The doctrine of precedent requires courts to follow previous decisions on the same legal issue.
• Stare decisis is the principle central to the doctrine of precedent, ensuring legal certainty and consistency.
• Binding precedent must be followed; persuasive precedent may be considered but is not obligatory.
• Ratio decidendi is the binding legal reasoning in a judgment; obiter dicta are non-binding comments.
• The court hierarchy determines which precedents are binding on which courts.
• Mechanisms allow for the law to change: courts may distinguish cases on their facts or, in higher courts, overrule previous decisions.
• The doctrine ensures both legal certainty and the capacity for legal development in response to new issues or societal change.
• The post-Brexit status of CJEU decisions is that pre-Brexit CJEU case law is binding as "retained EU case law" unless and until overruled, primarily by the Supreme Court or, in certain circumstances, the Court of Appeal.
• Interaction with legislation: precedent is subject to statutory rules, and Parliament may reverse, modify, or codify principles established by case law when needed.

Key Terms and Concepts

• stare decisis
• binding precedent
• persuasive precedent
• ratio decidendi
• obiter dicta
• distinguishing
• overruling
• court hierarchy
• follow
• reverse
• overrule
• affirm
• retained EU law