Chapter 5. The Doctrine of Precedent

Vertical Vs Horizontal Binding Effect

The legal system of England and Wales is partly based on the doctrine of stare decisis, which ensures that legal decisions remain consistent over time by applying precedents from previous cases.

1.1 Vertical Binding Effect

Precedents are generally binding from higher courts to lower courts, ensuring that the decisions of the Supreme Court and the Court of Appeal guide the rulings of inferior courts.

1.2 Horizontal Binding Effect

The principle of horizontal binding refers to the extent to which courts are bound by their own previous decisions.

The Supreme Court is not bound by its own previous rulings, allowing for legal flexibility.

In the Court of Appeal's civil division, decisions are generally binding, while in the criminal division, the court can depart from its previous rulings if they are believed to be incorrect and adherence would cause injustice.

High Court decisions are binding in future High Court cases if they were made in an appellate capacity.

Lower courts' decisions, such as those from the County Court, do not have binding effect on co-ordinate or higher courts.

These principles of binding precedent maintain the balance between legal certainty and the ability to adapt to new circumstances or correct past errors.

When Is A Decision Binding?

The relevance of a prior decision to a current case is paramount in determining whether it is binding. The decision must involve analogous facts and laws to be considered a valid precedent.

Let's say a small business owner is sued for breach of contract for not delivering goods on a specified date.

In a similar past case, the court may have established that if the contract contains a "time is of the essence" clause, then failure to deliver by the specified date constitutes a breach.

This decision would be relevant and binding in the current case if the contract in question also contained a similar clause.

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In contrast, consider a case where a homeowner is sued for not completing the sale of their house by the agreed date.

Although this involves a breach of contract, the specifics of property law and the usual contractual provisions in real estate transactions differ significantly from those in the sale of goods.

Therefore, the decision in the small business owner's case would not bind the court in the homeowner’s case, even though both involve breaches of contract.61

Elements Of A Judicial Decision

3.1 What Part of a Judicial Decision Is Binding?

The binding element of a judicial decision, the ratio decidendi, is composed of the key facts, applicable laws, and the court's interpretation of these laws that form the basis of the court’s decision.

In a case of defamation, if a journalist publishes an article with false information about a politician, the court's decision on whether the publication constituted defamation will be based on the specific facts of the case, the established defamation laws, and how the court interprets these laws to determine liability.

The court's reasoning for why the publication was defamatory constitutes the ratio decidendi.

3.2. Obiter Dictum

Obiter dicta are comments made by a judge that, while not crucial to the decision, provide insight into the judge’s reasoning and may indicate how the court might rule under different circumstances.

In a case involving a car accident where the driver was found liable for negligence resulting in injury, the judge's statement that liability might not have been established if the weather conditions had been severe, altering the standard of care expected, would be considered obiter dictum.

This hypothetical situation does not form part of the ratio but offers guidance for future cases.

3.3 Which Types of Opinions Are Binding?

In cases with multiple judges, the collective decision of the majority forms the binding precedent. If there is no clear majority, the view supported by the highest number of judges becomes the ratio.

Dissenting opinions, while not binding, may be cited for their persuasive value in future cases.

In a landmark case addressing privacy laws, three judges may find for the claimant based on one legal principle, while two other judges also find for the claimant but base their decisions on an entirely different legal principle.

The majority's legal reasoning becomes the binding ratio decidendi.

The dissenting judges' opinions, although not prevailing, can be persuasive in subsequent cases that address similar legal questions.