Business Law 1Business Law 1

Case LawCase Law The hierarchy of the courtsThe hierarchy of the courts

Case Law refers to the creation Case Law refers to the creation and refinement of law in the and refinement of law in the course of judicial decisionscourse of judicial decisions

House of Lords

Court of Appeal

CivilDivision

CriminalDivision

High Court

Queen’s Bench DivisionFamily DivisionChancery Division

Crown Court

County court

Including Small Claims Procedure

Magistrate’s court

Civil Criminal

PrecedentPrecedent

The doctrine of the binding precedent, or The doctrine of the binding precedent, or stare stare decisisdecisis, refers to the fact, that within the , refers to the fact, that within the hierarchical structure of the English courts, a hierarchical structure of the English courts, a decision of a higher court will be binding on a decision of a higher court will be binding on a court lower than it. If the precedent was set up court lower than it. If the precedent was set up by a court of higher or equal status to the by a court of higher or equal status to the court deciding the new case, then the judge in court deciding the new case, then the judge in the present case should review the rule of law the present case should review the rule of law established in the earlier case. Where the established in the earlier case. Where the precedent is from a lower hierarchical court, precedent is from a lower hierarchical court, the judge in the new case, may not follow, but the judge in the new case, may not follow, but certainly will consider it.certainly will consider it.

House of LordsHouse of Lords

Stands at the top of the English Stands at the top of the English court structure and its decisions court structure and its decisions are binding on all courts below it.are binding on all courts below it.

Regards itself as bound by its Regards itself as bound by its previous decisions. previous decisions.

Court of AppealCourt of Appeal

It is also bound by its own previous It is also bound by its own previous decisions and by the decisions of the decisions and by the decisions of the House of Lords in civil cases, but there House of Lords in civil cases, but there are some exceptions. Along with them, are some exceptions. Along with them, there is also a possibility that the Court there is also a possibility that the Court of Appeal can ignore a previous of Appeal can ignore a previous decision of its own which is inconsistent decision of its own which is inconsistent with Community law or with a later with Community law or with a later decision of the European Court.decision of the European Court.

Those exceptions arise when:Those exceptions arise when:

There is a conflict between two previous There is a conflict between two previous decisions of the Court of Appeal. In this decisions of the Court of Appeal. In this situation, the later court must decide which situation, the later court must decide which decision to follow and which to overrule.decision to follow and which to overrule.

A previous decision of the Court of Appeal A previous decision of the Court of Appeal has been overruled by the House of Lords. has been overruled by the House of Lords. Here, the court of Appeal is required to Here, the court of Appeal is required to follow the decision of the House of Lords.follow the decision of the House of Lords.

The previous decision was given The previous decision was given per per incuriam incuriam (ignored) and led to different (ignored) and led to different conclusions. In this situation, the later court conclusions. In this situation, the later court can also ignore the previous decision in can also ignore the previous decision in question.question.

Civil DivisionCivil Division

Civil actions are between Civil actions are between individuals. The state merely individuals. The state merely provides the legal framework provides the legal framework within which they determine and within which they determine and seek to enforce their mutual seek to enforce their mutual rights and obligations.rights and obligations.

Criminal DivisionCriminal Division

Courts in criminal division are not bound Courts in criminal division are not bound to follow their own previous decisions to follow their own previous decisions which they consider to have been based which they consider to have been based on either a misunderstanding or a on either a misunderstanding or a misapplication of the law. The reason misapplication of the law. The reason for this is that the criminal courts deal for this is that the criminal courts deal with matters involving individual liberty with matters involving individual liberty and therefore require discretion to and therefore require discretion to prevent justice.prevent justice.

High CourtHigh Court

Hear appeals from Hear appeals from courts and tribunalscourts and tribunals below them in the hierarchy;below them in the hierarchy;

Bound by the doctrine of Bound by the doctrine of stare decisisstare decisis and and must follow the decisions of the House of must follow the decisions of the House of Lords and Court of Appeal;Lords and Court of Appeal;

These decisions are binding on courts These decisions are binding on courts inferior in the hierarchy, but not on other inferior in the hierarchy, but not on other High Court judges although they are of High Court judges although they are of strong persuasive authority and tend to strong persuasive authority and tend to be followed in practice.be followed in practice.

Crown CourtCrown Court

They can not create precedent and They can not create precedent and their decisions can never amount to their decisions can never amount to more than persuasive authority.more than persuasive authority.

County and Magistrate’s courtsCounty and Magistrate’s courts

can not create precedents.can not create precedents.

Binding precedentBinding precedent

The contents of a report can be divided into The contents of a report can be divided into two categories:two categories:

Ratio decidendiRatio decidendi – it is understood as the – it is understood as the statement of the law applied on deciding statement of the law applied on deciding the legal problem raised by the concrete the legal problem raised by the concrete facts of the case.facts of the case.

Obiter dictumObiter dictum – is any statement of law – is any statement of law that is not an essential part of the that is not an essential part of the ratio ratio decidendidecidendi and they have persuasive and they have persuasive authority.authority.

EvaluationEvaluation

The division of cases into these The division of cases into these two distinct parts is a theoretical two distinct parts is a theoretical procedure. Unfortunately, judges procedure. Unfortunately, judges do not actually separate their do not actually separate their judgments into the two clearly judgments into the two clearly defined categories and it is up to defined categories and it is up to the person reading a case to the person reading a case to determine what the ratio is.determine what the ratio is.

Advantages of Case Advantages of Case LawLaw ConsistencyConsistency

CertaintyCertainty

EfficiencyEfficiency

FlexibilityFlexibility

Advantages of Case Advantages of Case LawLaw

The main mechanisms for judges to The main mechanisms for judges to alter or avoid precedents are:alter or avoid precedents are:

OverrulingOverruling

DistinguishingDistinguishing

Disadvantages of Case Disadvantages of Case LawLaw UncertaintyUncertainty FixityFixity UnconstitutionalityUnconstitutionality InnovationInnovation ReformReform