Doctrine of Precedent: Court Cases and Binding Judicial Decisions

The Doctrine of Precedent

The common law doctrine of precedent is applied by courts to promote predictability and consistency of judicial decision-making.

The application of precedents is the main factor in the way the law is applied equally to all.

It means that the law is applied with a greater degree of certainty. The law also remains capable of organic change.

The doctrine of precedent is the basis of the common law judicial decision-making process. It's how precedents in law:

• become established as a result of a broadly consistent series of judicial decisions
• are followed by judges in later comparable cases which come before the courts, and
• binding precedents are replaced when they are no longer good law.

The doctrine of precedent achieves this because precedents are applied to later cases with a similar or comparable factual background.

The doctrine of precedent is also known as stare decisis: "to stand by things decided". It stems from the legal maxim stare decisis at non quieta movere which translates as “to stand by things decided and not disturb settled points”.

It means that the same legal issue or principle doesn’t need to be decided again. It is authoritative precedents and persuasive precedents which are used to decide later cases.

Stare Decisis and Judicial Precedent

Stare decisis means - in theory - that any lower court in a judicial hierarchy is bound by the point of law decided in a comparable case by a higher court.    

The law as stated will be applied to other comparable cases which come before courts in the future.

But then it is a relatively simple task for a court to distinguish its decision and not follow a precedent when it wishes to do so.

What is a Precedent in Law?

A judicial decision or a case of itself is not the precedent.

It is the reasons for reaching the decision in the case which constitutes the precedent.

Those reasons are known as the ratio decidendi. The ratio is the essential legal reasoning applied to arrive at the particular legal result in the case, with the legal consequences which follow.

It is the ratio decidendi that is followed, distinguished, applied or overruled in later judicial decisions.

The Making of a Legal Precedent

Legal principles in the common law legal systems become established as a result of the outcomes of broadly consistent or comparable cases.

A rule or principle of law may become established and binding:

1. by consensus when judges at the same level of the judiciary frequently cite a previous decision in their own decision. The decision is cited by judges at the same level of court in different cases with similar facts.
   The frequency of the citation of the previous decision makes it a persuasive authority.
2. authoritatively when a higher court in the judicial hierarchy - an appellate court - states what the law is, by reference to the ratio decidendi of their own decision in the case or the ratio a previous decision of a lower court.

In concept, it’s straightforward.

It can be tough to appreciate how the doctrine of precedent works without knowing how the legal process works.

Really tough. First and foremost, without deciding the facts of the case first, there can be no (correct) application of the correct precedent.

Facts of the Case

Courts are there to decide disputes. Those disputes are based on the facts of the case: what happened in the real world.

The law is not applied to alleged facts. Facts need to be proved.

Relevant facts need to be proved on the balance of probabilities. And that is done by with witness statements and where appropriate, affidavits.

Which Facts?

But it’s not any facts that must be proved to win a case to successfully defend a case, or:

• what a party might think the court should know about;
• how the party thinks they have been aggrieved or have been offended.

Much of that is usually irrelevant and at most peripheral to the facts that must be proved.

The Cause of Action

The centre point for and focus for winning a case are the facts required to be proved by the cause of action. A successful defence depends on proving that at least one of those required facts has not been proved by the claimant.

Without knowing what the decided facts are, there is not enough information to decide whether a specific precedent applies or not.

Deciding the Facts

So judges decide the facts of the case first, and then decide the legal principles.

Lord Diplock in Bahamas International Trust Co Ltd v Threadgold [1974] 3 All ER 881 said it like this:

It is for the judge to decide for himself what the law is, not to accept it from any or even all of the parties to the suit; having so decided it is his duty to apply it to the facts of the case. He would be acting contrary to his judicial oath if he were to determine the case by applying what the parties conceived to be the law, if in his own opinion it were erroneous.

Evidence

Findings of fact are based on evidence. Another judge said that:

a judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden.

Once the facts are decided on the evidence, the court is in a position to apply to apply the doctrine of precedent.

The application of the doctrine of precedent operates where the proved facts of current case are similar those decided in a previous case. That is, the instant case is on all fours with the facts in the precedent: ie the facts are strictly analogous. 

The doctrine of precedent works on two levels.

Application of Judicial Precedent at First Instance

The first is by the trial judge.

Having decided the facts of the case, the trial judge might:

• apply a case, which equates to following a binding precedent.
• follow a precedent (aka an authority).
  The judge follows the ratio decidendi of a previous case in the current case being decided.
  The judge might also decide to not follow a previous case.
• consider an authority. The case is considered for its ratio decidendi and/or obiter dicta, but is it not followed.
  When an authority is considered, the case reference is likely to be cited, so that readers of the judgment are able to follow the reasoning in the decision.
• distinguish an authority. The judge decides that a precedent does not apply to the current case.

There are many ways of distinguishing an authority. Some of the ways that might be done is covered further down.
Then, simply because a decision is distinguished does not mean that it is bad in law.
But then a bad case which is not consistent with the communis opinion doctorum (Latin: “learned common opinion.”) is likely to be distinguished out of existence. See what happened to Foakes v Beer below.

Decision-making process

Once the facts of the case are decided, trial judges usually look for authorities where the facts of the case are substantially the same on a conceptual level (ie are on all fours). If the facts are not sufficiently similar, the judge then finds previous cases with comparable facts and decides whether the legal reasoning in those cases can be compared and then applied to the case being decided.

If gaps exist in the decided law, legal reasoning is applied to arrive at a just result in the case.

If the law is going to be applied equally to all that come before courts, there really is no other sensible and coherent way to apply and develop the law.

Application of Judicial Precedent on Appeal

The second is on the appellate level.

Appellate courts have a different role to trial judges.

Appeal courts don’t rerun the trial and hear the case all over again. They don’t re-hear the cross-examination of witnesses, decide the facts all over again and hear the same arguments. That would be a hearing de novo.

That’s not what appeals are about.

Rather, appellate courts review the correctness of the decision of the court below.

In appeal courts, the function is not so much to ensure that the case decided below was decided in the way that the appeal court would have decided it.  It certainly isn’t to arrive at the same decision as the trial judge.

It’s more about whether the decision falls within a range of possible outcomes for the facts decided in the case in the court below.

It’s a review, and if necessary, a corrective process is applied. That may involve:

• applying the same law in the same precedent
• deciding that a different precedent should have been applied in the case
• applying a precedent from a higher court, or
• developing the law, and deciding the case on a different basis.

The more the superior the court, the wider they can make the ratio, so that it applies in a wider variety of circumstances. 

Powers of Appellate Courts

To enable the supervisory and review functions of appellate courts, courts of appeal have powers in addition to those of trial judges.

They have the power to:

1. to consider, apply, follow or not follow and distinguish binding precedents, which are the same as a trial judge.
2. approve a precedent (aka “an authority”)
3. overrule a point of law in a previous decision made by a lower court. The overruled point of law will no longer be binding on lower courts.
   The appeal court might decide that the lower court was bound by an authority of a higher court, such as the Supreme Court, and should have applied that.
4. affirm the judgment of the case being appealed, and the outcome of the case
5. reverse a decision, in that the decision of the lower court is set aside by the court of appeal, and/or
6. disapprove a previous precedent, but not overrule it in the current case.

Appeal courts do not exercise these powers readily or even easily. What’s more, permission is needed to have an appeal heard.

Appellate courts have other roles. They include:

• to provide guidance to lower courts
• provide discussion in decisions so that lower courts are better able to fit the ratio decidendi into a context as part of deciding future cases. Factors might be raised and considered, but then ruled out of forming part of the ratio decidendi.

Multiple Appellate Courts

In civil justice systems, there is usually more than one appellate court that litigants can appeal the decision made at trial. Decisions of appeal courts may be able to be appealed further to a higher court.

The supremacy of the court increases the further you work up the court hierarchy.

For instance, in a case which starts in the High Court:

1. the trial judge is the High Court Judge sitting alone and first hears and decides the case at the trial
2. the Court of Appeal hears the appeal; and
3. the Supreme Court hears the appeal from the Court of Appeal.

An appeal from the decision of a Master of the High Court usually lies to a High Court Judge.

If a trial takes place in the County Court, then the appeal path would usually be:

1. an appeal is to a single High Court Judge, who sits as the court of appeal;
2. the next appeal court would be the Court of Appeal, and then
3. the Supreme Court.

At each stage, permission is required to appeal a decision before a court will review the decision. In England, it’s known as permission to appeal.

Then there are leapfrog cases.

Leapfrog cases

After a trial in civil proceedings before a single High Court Judge, an appeal may be made permitted directly to the Supreme Court.  It’s known as a leapfrog appeal, or a leapfrog case.

Sections 12 to 19 of The Administration of Justice Act 1969 enable leapfrog appeals where “a point of law of general public importance is involved in that decision and that that point of law” has been fully argued at the trial and involves:

1. the legal interpretation of a statute or of a statutory instrument, or
2. a decision where the trial judge is bound by a decision of the Court of Appeal or the Supreme Court

It may also be a decision of general public importance and the result of the case is so significant that consideration by the Supreme Court outweigh the benefits of consideration by the Court of Appeal. The leapfrog appeal must be justified in the opinion of the High Court judge and the Supreme Court.

That’s quite a high bar to satisfy. Similarly, under section 57 of the Access to Justice Act 1999 appeals may be available from decisions made in the County Court directly to the Court of Appeal.

Binding Precedents

Binding precedents apply to a case when the facts of the case are on all fours with those in a precedent from a superior court. 

A binding precedent is not a persuasive authority. That is something different. It’s an authoritative precedent which is the binding precedent.

When the facts are similar in the case being heard and decided, there need to be unusual features to enable the case to fall outside the existing legal precedent. If it doesn’t, the judge has no choice but to apply the binding precedent.

Binding precedents require the judge to decide a case in a particular way, consistent with the authority. That may be contrary to the judge’s own belief; they may not agree with it on a personal level.  But they have no choice but to apply the authority.

When that happens, the judge in their reasons for the decision might say that the law is somehow unsuitable or out of date. That may be accompanied by a desire for the decision to be reversed on appeal.

Stare decisis means - theoretically - that any inferior court is bound by the point of law decided.

But then a decision might be distinguished.

Persuasive Authorities

A persuasive precedent has no true binding force.

It’s a case which the court might rely on to reach its own decision, but is not bound to do so.

That is especially the case when the facts of the instant case differ from those in a cited precedent.

Another persuasive precedent (or an authoritative precedent) may apply when it is more appropriate for the facts of the case.

A precedent may be persuasive for a number of reasons.

1. The case receives frequent judicial endorsement by judges at the same level of court in the judicial hierarchy.
   After the precedent is made, other judges rely on it in subsequent decision. As those instances increase, the decision becomes entrenched. That’s communis opinion doctorum in action.
   For example, a High Court Judge sitting alone is not bound by other first instance decisions of High Court Judges. Those judgments however will be persuasive when the factual matrix is close enough to the current case.
   And then decisions of County Court Judges don’t have precedential value. Their decisions carry no weight for the purposes of making binding precedents or persuasive precedents
2. Similar cases have been decided by courts in foreign countries.
   That’s one of the strengths of the common law system.
   English Courts might cite decisions from Australia, New Zealand, the United States or elsewhere. The decided principles in those countries are adopted to English law and incorporated into English law. Decisions of the Court of Appeal in Northern Ireland are especially persuasive, and given a special status. That’s because inconsistencies between the law of England and Northern Ireland is seen as undesirable
3. Decisions of the Privy Council are persuasive but not binding on courts in England. The Privy Council is the final court of appeal from countries that have retained the right of appeal to His Majesty in Council or to the Judicial Committee of the Privy Counsel, UK overseas territories and Crown dependencies
4. The content of textbooks authored by academics also may form the basis of a decision. For instance, Lord Burrows (formerly Professor Burrows) was an academic prior to his appointment to the Supreme Court in 2020. Professor Wadlow is often cited in respect of the law of passing off in English Courts.
5. Judges may write or give speeches ex-judicially. As an example, see the speech of Lord Sales of the Supreme Court below.
6. Obiter dicta in a decision made in a higher court may guide the decision for the current case. For example, dicta in cases in an appellate court might provide guidance for the case being heard in the lower court in the future

Persuasive precedents are also able to be considered and rejected, such as in Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72 at paragraph 31.  

Persuasive Weight

Then, persuasive precedents vary in the weight (or persuasive value) that other courts will attribute to them. This is especially important when assessing how a court might evaluate comments made obiter.

Qualitative factors to that assessment include:

• The status level of the court in the judicial hierarchy.
• The seniority of the judge (or judges) which decided the case.
  For instance, the decisions of Lord Hoffman almost always carry significant weight. When he was sitting, he was one of the best judges of the last 100 years
• Whether the decision was made as part of an application or at the trial. Even decisions made after an interim application can carry weight. For example, when a party is all the more vindicated when they successfully resist an application for summary judgment and then succeed at the trial

Distinguishing a Case

The law is not static. It develops over time.

Some legal principles are so fundamental that they are deeply entrenched in English law.

It’s well known than judges have a good deal of manoeuvrability in the way case law is applied.

Prior cases may be found to lead to undesirable results or injustice. When that happens, previous cases are prone to be distinguished.

The common law evolves by calling out material factual differences with prior cases and adjudicating whether the legal rule in question should apply in the case. When that happens, the reasons should be explained in the judgment. If not, it’s more likely to be appealed.

New Cases

Then, new cases raise new factual circumstances. Those factual circumstances will not always be dealt with adequately by existing authorities.

When new technologies are developed and used as a new method of doing business, there may be no cases decided that match the type of facts or events which take place in a new business model.

Unsuitable Law

It may be that the law is unsuitable for the findings of fact that come before a court.

When cases are Distinguished

A judge might distinguish the current case being considered and avoid applying a precedent in a variety of ways.

• The facts of the case:
  1. are sufficiently different to the previous case. The authorities are distinguishable because the material facts contained in the authority are missing or incomplete
  2. mean the earlier decision inapplicable to the case being decided
• A relevant authority:
  1. would lead to an unjust result. That’s because courts of law are also courts of justice.
  2. relies on standards in society which have changed since the authority was originally decided:
  3. is properly thought to be a persuasive authority only
  4. places significant weight on the existence of one type of fact or a combination of facts, and that weight does not exist in the current case

When a binding precedent case is consistently distinguished and not followed, over time the legal principle or decision is likely to be distinguished out of existence. It may never be formally overruled. Its authoritative weight ends up being consigned to history.

Overruling Precedents

Over time, most case law is superseded and replaced new precedents.

When a precedent is overruled, it’s no longer good law. It can also be said to be bad in law.

A common forerunner to that is that judges disapprove, distinguish and/or no longer follow the authority.

Alternately, the decision may be simply overruled by a court of appeal. That creates a new binding authority for inferior courts, overnight.

However, the judiciary has a general reluctance to overrule longstanding existing precedents. The older it is, the more likely a greater part of relevant parts of society have relied on it.

Age and Weight

That reluctance can diminish with the age and weight of the decision:

• The decision is only a few years old and is not consistent with the current orthodoxy
• The decision has only been applied at first instance (at a trial) and not been decided by the Court of Appeal
• It would cause an upheaval in the operation of the law.
  Courts recognise that businesses manage their affairs by reference to the law. Shifts in legal principles can cause serious - serious - problems.
  But it happens.
  For example, litigation funders did not see the decision of the Supreme Court in the Paccar Case It upended (and shook) practically the entire litigation funding industry.

Per Incuriam Decisions

The case was decided per incuriam (Latin: through a want of care), when there was some oversight in the law result in an error by the court.

• The law was not brought to the attention of the court, such as:
  1. a binding authority was not cited, or failed to be taken into account
  2. a statute which would have changed the result of the case was not cited.
• the judge was misinformed of the law.

A judgment per incuriam is not binding and has no authority under the principle of stare decisis.

Law has moved on

Long standing decisions are more likely to be overturned when it produces unjust results or work unsatisfactorily in the marketplace or society generally. It has fallen out of date.

Speaking ex-judicially, Lord Sales, a Supreme Court Judge made these points in Default Rules in the Common Law: Substantive Rules and Precedent (2023):

• A previous decision is more likely to be overruled if it impedes the development of the law, causes uncertainty, administrative difficulties or individual injustice
• A court is more likely to not to overrule a previous decision where it “risks retrospectively disturbing the basis on which contracts and other commercial transactions have been entered into”.
  That would cause a serious disturbance to an otherwise stable legal environment
• The change in law is complex or has wider social consequences. Those sorts of changes are more of the role for the legislature - Parliament - rather than courts

Courts Overturning their own Decisions

Courts generally have power to overturn their own decisions, provided they’re not bound by a decision of a higher court.

Court of Appeal

The Court of Appeal bound its own previous decisions in any case with substantially similar facts.

There are cases where the Court of Appeal is not bound to its own previous decisions, which include when:

1. the Court of Appeal has made conflicting decisions.
   The Court of Appeal decides which of its previous conflicting decisions it will follow
2. the Supreme Court as decided a case which conflicts with a previous decision of the Court of Appeal, even when it is not expressly overruled
3. where the previous decision was per incuriam.

Supreme Court

The Supreme Court has power to disapprove its own decisions where:

too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law: Practice Statement (Judicial Precedent) [1966] 1 WLR 1234.

The default rule however favours the status quo. The court will be “very circumspect” before accepting an invitation to invoke the Practice Statement.

General Principles of the Doctrine of Precedent

The sometimes not so obvious background to the operation of the doctrine of precedent includes:

• A case is only authority for what it actually decides: Lord Halsbury in LC Quinn v Leathem [1901] UKHL 2
  A case is not authority for corollaries which may seem apparent or logical

• The application of a precedent is limited to the particular facts of the case on which it was decided
• If the decision made at trial is wrong and never appealed or can’t be appealed, it remains wrongly decided.
  Courts hearing subsequent cases will realise that the case has no value and not follow it
• The age of an authority will tend to weaken its authority, unless it is affirmed and followed in more recent cases
• Legal principles do not necessarily need to be stated in the decision. It is enough that the rule or principle underlies the decision and forms part of the ratio decidendi.
  For example, see the decision in Topalsson GmbH v Rolls-Royce Motor Cars Ltd [2023] EWHC 1765. In that case, Mrs Justice O’Farrell DBE cited authorities in 8 paragraphs of a 400 paragraph judgment. Paragraph 170 cited the relevant law and moves on, quickly, because the relevant law is so well known.

• The law as stated in binding precedents are applied to cases at the time judgment is handed down by the court.
  For example, the law that applies to a contract is the law as it exists when judgment is handed down. Courts are not restricted to what the law was thought to be at the date of the contract if it has been subsequently developed.
  Likewise, the law that applies in copyright cases is the law as it exists when judgment is handed down.

The doctrine of precedent does not apply to obiter dicta, but dicta can have persuasive weight.

Obiter Dicta and Precedents

Obiter dicta stands in contrast to ratio decidendi. It is sometimes abbreviated to obiter or dictum (the singular), and is “a statement by the way”.

Comments made obiter do not form part of the reasoning for the decision. It will not constitute part of the precedent and is not binding.

Obiter dicta includes:

• observations by a judge on a legal question in case before them, but not arising in a so as to require the point of law to be decided.
  The comments and observations may however carry great weight. But they are not conclusive authority.
• statements of past decisions to:
  • set the context for the current case being decided
  • set out the movement of the law to explain the rationale for a new authority
  • explain the scope of the ratio, and set out its boundaries of application
• comments which may set the law in a new direction in future cases

An opinion not necessary to a judgment and therefore not binding as a precedent. it does form part of the ratio. They’re comments which are not necessary for the purpose of deciding the case on its facts.

Advantages of Doctrine of Precedent

The advantages of the doctrine of precedent include:

1. the desirability of promoting certainty in the application of the law
2. consistency of judicial decision-making. It establishes a common and stable approach to solving legal problems
3. the stable and predictable system of law which results from consistency of outcomes from similar cases.
   It results in stable societies. The antithesis to the doctrine of precedent results in what is sometimes referred to as palm-tree justice and banana republics
4. appellate courts provide practical guidance to judges in courts lower in the legal system for future cases. That guidance can smooth the road in advance of future decisions by other judges
5. judges are more able to assign legal weight to incommensurable values.
6. the predictability accommodates foreign investment and the certainty incentivises international trade and commerce
7. members of society have a better idea of where they stand viz-a-viz the law

It also means that members of society are able to take legal advice and obtain a view on whether it is likely to be worthwhile (or not) going to court to enforce a legal right.

More on that below.

Disadvantages and Limitations of Stare Decisis

The disadvantages and limitations of the doctrine of precedent include:

• The benefit of predictability of the law comes at the price of speed. The law moves slowly forward. Changes to the common law are incremental. It may take several cases for the law to move to a satisfactory state.
  That can be mitigated by enactment of legislation by Parliament.  But that does not cure the problem.
• It takes cases to come before courts for judge-made law to develop.
  Firstly, cases need to come before courts.
  Cases attract legal fees for the skillsets of the solicitors and barristers to conduct those cases. It’s expensive.
  That means those disenfranchised by the law do not have access to justice. That unsatisfactory position has been publicly recognised and acknowledged for over well over 30 years.

That leads to the proposition that legal rights are more in the nature of privileges to be paid for.

• When areas of common law mature, the state of the law on any particular factual matrix can breakdown through the complexity of the law.
  It becomes more difficult to ascertain the state of the law which would apply to the specific set of facts. Predictability of the likely outcome becomes more uncertain.
  Also, those cases tend to be more time consuming and as a result, more expensive.
• Over time, the greater the detail in the relevant area of law, the more specialist the legal advice, which leads to greater costs for legal advice. The law moves out of reach of the majority of member of the public (and it has). That in turn leads to an absence of access to justice.
  The courts themselves since at least 2001 imposed a limit to the number of citations and authorities which may be referred to courts at hearings. See Practice Direction (Judgments: Form and Citation) 2001 1 WLR 194. The current requirements are set out in Practice Direction: Citation of Authorities (2012).

• The legal system relies on advanced and ever more timely law reporting and indexing of decisions. Without it, decisions relevant new cases cannot be found.
  That in turn:
  • requires dedicated and specialist legal information service providers
  • leads to expense for the legal professionals to stay up to date with the law
  • leads to greater legal costs for litigants
  • leads to a lessening of access to justice
• Parliament passes swathes of laws in the legislative programme in parliamentary term.
  See Lord Burrows in his lecture, Statutory Interpretation in the Courts Today (2022).
  Parliament is the supreme law-making body in common law systems. Courts that interpret what legislation:
  • ultimately means, in terms of its legal effect, and
  • whether it was lawfully made.

Judicial Precedent Examples

Judicial decisions state substantive rules of law.  

The judicial reasoning is usually drawn out in the original precedent. Then the precedent is cited in later cases by name, usually with a paragraph reference, an extract, direct quotation, or summary of the legal principle.

What follows are the well-established principles of English law.

Law of Damages

One of the oldest frequently cited cases in the law of damages is Robinson v Harmen [1848] EngR 135.  It is one of the seminal authorities on damages.

It sets up the underlying basis for the calculation of awards of damages in contract and tort cases.

The ratio decidendi runs like this:

The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect of damages, as if the contract had been performed.

The facts of the case are no longer relevant.

It has been reaffirmed frequently since it was made and constantly cited in cases in damages cases. The House of Lords reaffirmed it in The Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] UKHL 12 (paragraph 29) and it "remains as valid now as it was then”.

Likewise, the Supreme Court reaffirmed the principle in Morris-Garner v One Step (Support) Ltd [2018] UKSC 20 at paragraph 35.

Precedent: The Rule in Foakes v Beer

And then there’s Foakes v Beer from 1884. It is the judicial precedent for the proposition that payment of a lesser sum of money (of itself) is not accord and satisfaction for discharge a larger debt. Some further consideration is required, such as “the gift of a horse, hawk, or robe” to do so.

In the case, the House of Lords approved an even older case, the original precedent, Pinnel's Case (1602) 5 Co Rep 117.

In Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24 (paragraph 18), the Supreme Court refused to overrule Foakes v Beer. That was despite it having a history of being distinguished.  Despite its age and criticism, it is still applied. See for example, in Integral Petroleum SA & Ors v Dun [2022] EWHC 659.

Contract Law

And then for an account of how different judges in superior courts influence the judicial precedents (and how contracts are interpreted), see paragraph 17 of Contractual Interpretation: Do judges sometimes say one thing and do another? by the Chancellor of the High Court, Sir Geoffrey Vos.

The Doctrine the Precedent and Legal Advice

Another advantage of the doctrine is precedent is that members of society are able to obtain legal advice to forecast the outcome of their own cases. They can get an idea whether they’re likely to be successful, or not, in the context of legal claims.

If you’ve read what appears above, you’ll know that there is no basis for the doctrine of precedent to operate or be applied without the facts of the case.

The process of providing legal advice roughly follows the same process that courts follow.

The facts come first, and then the law is applied to those facts.

The Process of Litigation

In disputes, parties make allegations of fact which conflict with one another. Both versions of the facts can’t right.

Also, a defendant might say that on an agreed set of facts, they are not liable.

That’s part and parcel of the process of resolution of disputes.

Judges decide the facts, and they do in in a specific way.

How Facts are Decided

To apply the doctrine of precedent, judges must first decide the facts of the case, and then apply the law to those facts to arrive at the result of the case.

Facts are decided by judges after the trial.

That is, after:

1. disclosure has been given
2. witnesses in the case have filed and served their witness statements
3. the witnesses have been cross-examined on their witness statements (ie the evidence) in open court
4. each party has told the judge why their version of the facts - based on the evidence - should be preferred and not their opponents.

After the trial, the judge will assess the arguments, all of the evidence presented against the credibility of the witnesses.

Then, the judge will decide which facts are proven, and facts which are not proven. The evidence will prove – or disprove – each alleged fact.

And with that, the judge has arrived at the factual matrix of the case.

It is at this point that the judge applies relevant precedents (ie the law) to the facts decided.

Examples

Personal Guarantee Cases

Contracts of guarantee are designed to establish liability for repayment of a loan by a guarantor.

Here’s a typical case where a creditor looks to enforce a personal guarantee:

A business enters into a loan agreement.
The lender/creditor obtains a personal guarantee for security to repay the loan.
Money is advanced by the lender to the borrower.
The loan is not repaid.

If the contract is going to say anything, it will say that the loan needs to be repaid. It’s unlikely that a contract will release a guarantor of liability without the debt being paid.

That would defeat the purpose of having a personal guarantee.

Terms of the Personal Guarantee

One can’t tell whether the guarantor can escape liability from the contract alone.

That would be looking that the legally binding obligations in a vacuum. The law does not operate in a vacuum. The law applies to facts.

The Facts

One of the ways to get out of a contract of guarantee depends on the behaviour of the lender and its agents.

The fact that a guarantor was misled prior to agreeing to the guarantee will not usually appear in a contract. When a guarantor is misled, it happens in the real world: where the background facts happened.

If the client say they were misled, the facts (and the evidence to prove it) surrounding that event need to be identified.

Once they are identified, a series of questions can be raised in the context of those facts and the terms of the contract of guarantee to see if it might be set aside.

They might include questions being asked, such as:

On the facts of this case, has there been a misrepresentation by the creditor and/or its agent before the guarantee was signed?

If so, what is the evidence avaiable to prove the misrepresentation was made before the guarantee was signed?

Was the misrepresentation relied on by the guarantor?

What is the evidence available to prove that the misrepresentation was made at that point in time, to substantiate the claim?

Without the facts, and the evidence to prove those alleged facts, it is anyone’s guess whether the personal guarantee can be set aside.

If the alleged facts establish and match a legal principle in a precedent which justifies a guarantor getting out of the contract, the precedent is a candidate to be relied on to get out of the contract.

Passing Off Cases

The law of passing off is also known as the law of unregistered trade marks.

Here’s a typical case of passing off:

A business creates its logo and branding.

It starts trading. It uses the logo and branding to promote its business.

It trades for 3 months.

It then discovers that another business has copied its business name, and wants to stop it.

The authoritative precedent usually cited by judges to recite the requirements of passing off is Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491. That precedent says the 3 elements which must be proved to win a passing off case are:

1. goodwill;
2. misrepresentation; and
3. a likelihood of damage.

If the claimant proves facts which show those elements, they win. If the claimant can’t prove those facts, it can’t succeed.

So the claimant must prove the facts which establish goodwill: that’s relevant trading activity.

If the business cannot show a solicitor evidence that goodwill exists, the solicitor will almost certainly advise the business that a passing off case can’t succeed.

The Legal Advice

That’s an application of the law of precedent as part of legal advice. One of the elements of the tort of passing off can’t be satisfied. The legal advice would be that the client cannot succeed to prevent the competing business using the law of passing off.

Contracts: Can I get out of this contract?

Contracts are legally binding agreements.

Whether a party can get out of a contract early depends on what the contract says, and what has happened since the contract was agreed.

Just by looking at the contract, you can’t tell what happened in the real world. That would be reading the contract in a factual vacuum.

Common Questions

Common examples of questions involved in breach of contract cases include:

1. Does the contract remain in force or has it already ended?
2. What has the other party done that might justify terminating the contract?
3. If they have done something, what did my client do in response, if anything?
4. What is the state of affairs now? That might include asking questions such as:
   1. Have the parties varied the terms of the contract since it was made?
   2. Has either party waived their rights or affirmed the contract?

It’s the events that happened in the real world that will tell you whether there are grounds to terminate a contract. Without knowing what happened in the real world, you can’t tell whether the party can escape the contract. 

That’s an application of the process to obtain facts which are relevant to establish the prerequisites of a precedent which could apply in the case.

The doctrine of precedent applies the law to the facts of the case. It applies to the terms of the contract which was agreed, as much as how the parties have performed since it was agreed.

Conclusion

The application of the law of precedent serves to minimise instances of courts deciding the same legal points again..

The application of the law in subsequent decisions are less likely to vary with judges’ proclivities, private sentiments or subjective views from case to case.

It is also a peer review system. Legal decisions are published. Other judges review them for their own cases. Decisions of courts are reviewable by higher courts.

Later decisions identify relevant cases and are applied when they need to be. They may be distinguish when they are unsuitable to be applied to the facts of the case or lead to unfair result.

The value of the doctrine of precedent is that the rule of law is more dependable in its certainty and predictability.

Coherent judicial reasoning would not be possible without it. The law is applied more predictably than what would other be the case.

Courts higher in the court hierarchy are not tied to precedents in the same way as trial judges.

Judges at all levels may not follow precedents in a particular case where injustice would be caused. Courts at first instance have far less discretion to do so.

Business Solicitors

Finding and interpreting the law is a fundamental part of the justice systems. The facts and the evidence that support it make or break every case. Findings of fact rely on the court accepting the evidence presented by parties to prove the version of events claimed to win court cases.

For business legal advice on applicable precedents in business disputes, making out your case and make the most of the evidence to prove your case, reach us at contact@hallellis.co.uk.