the doctrine of precedent and the role of courts in making common law, including binding and persuasive precedent

What this dot point is asking

QCAA wants you to explain how courts make and develop law through the doctrine of precedent: what stare decisis means, the difference between binding and persuasive precedent, how the court hierarchy makes precedent work, and how courts can avoid or change precedent. Expect a 3-5 mark short response in IA1.

The answer

Courts as law-makers

The common law (case law) is law made by judges through their decisions. Alongside statute law made by Parliament, the common law is one of the two main sources of Australian law. The judicial arm develops the common law incrementally, case by case, while Parliament can override the common law by statute.

The doctrine of precedent (stare decisis)

The doctrine of precedent (in Latin, stare decisis, "to stand by what has been decided") requires courts to follow the legal reasoning of higher courts in similar cases. It promotes:

• consistency, so like cases are treated alike;
• predictability, so people can order their affairs around settled law;
• fairness, by reducing arbitrary decision-making;
• efficiency, by settling questions of law authoritatively.

Binding and persuasive precedent

• A binding precedent must be followed. A precedent binds a court where it was set by a higher court in the same court hierarchy and the material facts are similar.
• A persuasive precedent does not have to be followed but may be considered and may influence a decision. Persuasive precedents include decisions of lower courts, courts in other hierarchies (for example courts in other states or overseas), and obiter dicta.

Ratio decidendi and obiter dicta

• The ratio decidendi ("the reason for the decision") is the legal principle on which the decision is based. The ratio is the part of a judgement that can be binding.
• Obiter dicta ("things said by the way") are observations not essential to the decision. Obiter is not binding but can be persuasive, especially where it comes from a senior court.

The court hierarchy makes precedent work

Precedent depends on a clear hierarchy of courts so that it is known which court binds which.

• The High Court of Australia is the ultimate court of appeal. Its decisions bind all Australian courts.
• The Supreme Court of Queensland (including the Court of Appeal) binds lower Queensland courts.
• The District Court and Magistrates Court of Queensland are bound by the courts above them.

A court is generally bound by courts above it in its own hierarchy, and not bound by courts at the same level or in other hierarchies (though those decisions can be persuasive).

How courts avoid or change precedent

Courts are not entirely locked in. They can:

• distinguish a precedent by showing the material facts differ, so the precedent does not apply;
• overrule a precedent, where a higher court decides an earlier decision was wrong;
• reverse a decision on appeal in the same case;
• disapprove a precedent, signalling it is doubtful without overruling it.

The High Court can depart from its own previous decisions, though it does so cautiously to protect stability.

Precedent and statute

Precedent and statute interact. Courts must interpret and apply statutes, and their interpretations become precedents. Parliament can abrogate (override) a common-law rule, or an unwelcome interpretation, by passing legislation. A famous example of judge-made law is Mabo v Queensland (No 2) (1992) 175 CLR 1, in which the High Court recognised native title at common law, after which Parliament enacted the Native Title Act 1993 (Cth).

Examples in context

Example 1. A District Court bound by the Court of Appeal. A judge in the District Court of Queensland is deciding a negligence question already settled by the Queensland Court of Appeal on similar facts. The Court of Appeal sits above the District Court in the same hierarchy, so its ratio decidendi is a binding precedent. The District Court judge must apply it, even if she personally disagrees.

Example 2. Distinguishing a precedent. A defendant relies on an earlier decision that a particular warning sign was adequate. The plaintiff argues the present case is different because the sign was obscured and the danger was hidden. If the court accepts that the material facts differ, it can distinguish the earlier precedent, so it does not apply, and reach a different result without overruling the earlier case.

Try this

Q1. Define stare decisis and explain why the court hierarchy is essential to it. [3 marks]

• Cue. Stare decisis means standing by decided cases; courts follow the reasoning of higher courts. The hierarchy establishes which courts bind which, so it is clear whose decisions must be followed.

Q2. Distinguish between ratio decidendi and obiter dicta and explain which can be binding. [3 marks]

• Cue. Ratio decidendi is the legal principle essential to the decision and can be binding. Obiter dicta are remarks not essential to the decision and are persuasive only.

Q3. Explain two ways a court can avoid being bound by an existing precedent. [4 marks]

• Cue. Distinguishing (showing the material facts differ so the precedent does not apply); overruling (a higher court declares the earlier precedent wrong). Also reversing on appeal in the same case.