Judicial Precedent

Think of a cricket umpire who gives a batsman out leg before wicket on a particular set of facts. If the next umpire, faced with exactly the same facts, gives the opposite decision, the game becomes a lottery and nobody knows how to play. The common law works the same way. A court that decides a case does more than settle a dispute between two parties: it lays down a principle that will govern the like cases that come after. That principle is precedent, and the discipline of following it is stare decisis. It gives the law certainty and equality: like cases are decided alike, and people can know in advance how the courts will rule.

Figure: The anatomy of a precedent: material facts, issue, ratio decidendi, obiter dicta and order, with what a later court may do with a precedent

1. Meaning of Precedent and Stare Decisis

In ordinary language a precedent is anything done or said that serves as an example for later conduct. In law it has a narrower meaning: a decided case that furnishes a rule for the decision of a later case on similar facts. The full Latin maxim is stare decisis et non quieta movere: to stand by things decided and not to disturb what is settled. The doctrine rests on three ideas. The law should be certain and consistent; like cases should be treated alike; and a litigant should not win or lose merely because his case came before a different judge.

2. The Kinds of Precedent

Authoritative (binding) and persuasive precedents

The first division is between authoritative and persuasive precedents. Textbooks sometimes list 'binding and persuasive' as a second pair, but it is the same distinction under another name. An authoritative or binding precedent is one the later court must follow, whether or not it approves of it; it is a legal source of law. A persuasive precedent is one the court may follow if it is convinced by its reasoning, but is not bound to; it is only a historical source. Decisions of higher courts in the same hierarchy are authoritative; foreign decisions, decisions of other High Courts and (in England) the obiter of higher courts are persuasive. Privy Council decisions, once binding in India, are now only persuasive.

Salmond: absolute and conditional authority

Salmond divided authoritative precedents into two kinds. An absolutely authoritative precedent must be followed even if the later court thinks it plainly wrong; the only remedy is for a higher court or the legislature to change it. A lower court's duty to follow the decision of a higher court is of this kind. A conditionally authoritative precedent binds in the ordinary course, but the later court may disregard it in special circumstances, as where it is clearly wrong in law or plainly unreasonable, or was given without the relevant law being considered.

Original and declaratory precedents

An original precedent creates and applies a new rule of law, one that did not exist before; a declaratory precedent merely applies an existing rule. The first makes law; the second states it. Declaratory precedents are far more numerous, but it is the original ones that develop the law.

3. Do Judges Make Law or Declare It?

The declaratory theory, associated with Hale and Blackstone, holds that judges do not make law; they only discover and declare a law that already exists. Blackstone called the judges the 'living oracles' of the law, bound to maintain and expound the old law rather than pronounce a new one. On this theory an overruled decision was never law at all; it was simply a mistaken statement of the law, and that is why overruling ordinarily operates retrospectively.

The law-making theory answers that judges plainly do make law, especially in original precedents. Bentham attacked judge-made law as 'dog law', made after the event like beating a dog for something it could not have known was forbidden. Austin called the declaratory theory a childish fiction. Gray and the American realists went further and treated the judges as the true lawmakers. In the twentieth century Lord Reid famously dismissed the declaratory theory as a fairy tale in which nobody any longer believes. The modern view is that judges make law, but interstitially, within the limits of statute and precedent. Prospective overruling (Section 8) is the clearest admission that judges make law, for one can only make a rule operate from a future date if one is creating it.

4. Ratio Decidendi and Obiter Dicta

The most important idea in the subject is that not everything in a judgment is binding. What binds is the ratio decidendi, the reason for the decision: the principle of law on which the decision is based, the rule necessary to reach the result on the material facts. Everything else is obiter dicta, things said by the way: observations on law not necessary to the decision, hypothetical illustrations, and statements on points not truly in issue. The order itself (who wins) binds only the parties, under the separate doctrine of res judicata.

The Indian position on obiter is stronger than the English. In England a dictum, however eminent, never strictly binds. The Supreme Court of India has held that even its obiter dicta are binding on the High Courts and subordinate courts, because Article 141 speaks of the 'law declared' and not merely the law decided. But this does not extend to mere casual observations or passing remarks made without any real consideration of the point. The test is whether the Supreme Court considered and pronounced upon the question, even if it was not strictly necessary to the result.

5. Finding the Ratio: Goodhart and Wambaugh

A judgment does not label its ratio. Two classic tests help. Goodhart, in 'Determining the Ratio Decidendi of a Case' (1930), proposed the material facts test: the ratio is found by taking the facts treated by the judge as material and his decision based on them. The principle is the rule that connects those material facts to that result. A later case on the same material facts must reach the same result; if a fact the judge treated as material is absent, the precedent can be distinguished.

Wambaugh, the American writer (The Study of Cases), proposed the inversion test. Take the proposition of law said to be the ratio and invert (reverse) it. Then ask whether the decision would still have been the same. If reversing the proposition would have changed the result, the proposition was part of the ratio. If the decision would have stood anyway, the proposition was obiter. The test fails where a court gives two independent reasons, since inverting either leaves the decision standing on the other; English courts treat each such reason as part of the ratio.

6. The English Hierarchy of Precedent

English law is the parent of the Indian doctrine and is examined in its own right. In London Street Tramways v London County Council (House of Lords, 1898) the House of Lords held that it was bound by its own decisions; only Parliament could correct its mistakes. This lasted until the Practice Statement of 1966 (Lord Gardiner LC), in which the Lords announced that while they would normally treat their former decisions as binding, they would depart from a previous decision when it appears right to do so, bearing in mind the danger of disturbing contracts, property settlements and fiscal arrangements, and the special need for certainty in criminal law. Since 2009 the Supreme Court of the United Kingdom has replaced the House of Lords as the final court and has continued the same practice.

The Court of Appeal is bound by the House of Lords (now the UK Supreme Court) and, in civil cases, by its own previous decisions. In Young v Bristol Aeroplane Co (Court of Appeal, 1944) it recognised three exceptions: (1) where two of its own decisions conflict, it must choose which to follow; (2) it must not follow its own decision that cannot stand with a later decision of the House of Lords; and (3) it need not follow its own decision given per incuriam.

7. The Indian Hierarchy and the Constitution

In India precedent has a constitutional footing. Article 141 provides that the law declared by the Supreme Court shall be binding on all courts within the territory of India. Article 142 empowers the Court to pass any decree or order necessary for doing complete justice in any cause before it. Article 144 requires all authorities, civil and judicial, to act in aid of the Supreme Court. Together they make the Court's declarations the law of the land. A High Court's decision binds the courts and tribunals subordinate to it within the State, but a High Court's decision is only persuasive for another High Court.

8. Prospective Overruling

Under the declaratory theory an overruling decision operates retrospectively, because the court only declares what the law always was. That causes hardship when a long-settled rule is overturned. Prospective overruling meets the problem: the court declares the old rule wrong, but directs that the new rule will apply only to future cases (or from a stated date), leaving past transactions undisturbed. The doctrine was developed in the United States. In Great Northern Railway v Sunburst Oil and Refining Co (US Supreme Court, 1932), Cardozo J held that a State court may choose to make its overruling operate prospectively without violating the federal Constitution.

9. Escaping and Destroying Precedents

10. Merits and Demerits of Precedent

11. Frequently Asked Questions

Q. Is the obiter dictum of the Supreme Court binding on High Courts?
A. Yes, in India a considered obiter of the Supreme Court binds the High Courts and subordinate courts, because Article 141 makes the 'law declared' by the Court binding. A mere casual observation made without consideration of the point does not bind. In England obiter never strictly binds.

Q. What is the difference between overruling, reversing and distinguishing?
A. Overruling is a higher court or larger bench declaring the rule of an earlier decision in another case wrong. Reversing is an appellate court setting aside the decision below in the same case. Distinguishing is showing that the material facts differ, so that the precedent does not apply.

Q. What is prospective overruling, and who may use it in India?
A. It is the technique of overruling an earlier rule but applying the new rule only to future cases. It came from Sunburst Oil (US, 1932) and was adopted in Golak Nath (1967), which confined it to the Supreme Court and, at first, to constitutional matters.

See also: Note 22 (sources of law), Note 23 (legislation), Note 25 (custom), Note 43 (legal reasoning), Note 15 (realist school).