Precedent
Precedent is used for interpreting law. Precedent consists of two rules, ratio
decidendi and stare decisis.
Ratio Decidendi
The first rule consists of the prior decision, the decision in the earlier case that
is a precedent. When interpreting law this rule says that one meaning rather
than any other meaning is the correct legal meaning of an ambiguous provision.
When making common law the rule says that there is now a new law and
proceeds to state its elements and consequences. This decision is called the
ratio decidendi of the case, or just ratio.
Under the analysis presented above of interpreting law, when the precedent is
first made it should be made by reference to policy. In other words, the ratio
impounds the policy by which the provision was interpreted.
Stare Decisis
The second rule is the requirement to follow this prior case in a later case by
applying the same rule or meaning, encapsulated in the ratio, in the later case as
in the earlier case. This is the fundamental rule that underlies precedent, the rule
of stare decisis. Since the ratio impounds the policy by which the provision
was interpreted, stare decisis transmits this policy from one case to the next.
This is how precedent is based on policy, and can be conceived as a
derivative of policy.
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Review of Precedent
At some stage a court might be asked to review a precedent for the
interpretation of a provision in a statute. In this event, the basis on which a
court should review the precedent is how accurately it incorporates the policy
by which the statute should be interpreted. If the precedent is wrong or faulty
in some way then the court should fix it. If it is neither wrong nor faulty, the
court should leave it alone.
Step 3: Decision
The third step in the model is the decision to choose one of the options:
(1)
The final decision of a legislature in the legislative process is the making
of a statute.
(2)
For a court, the final legislative decision is the making of a common law
rule. This becomes a precedent to be followed by future courts.
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For a more elaborate account see Christopher Enright Legal Reasoning
Chapter 23 Precedent
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