COURT PROCESS

Definition of Terms

Before examining the operation of precedent it is important that you understand the following terms:
Res Judicata: a decision handed down by the court is conclusive as between the parties to a case unless it is reversed on appeal. The decision binds the parties and the case and the case cannot be re-opened. The policy behind this rule is that there should be finality in litigation. Res Judicata applies even if fresh and relevant evidence comes to light after the case has been decided. One exception to this rule is that certain criminal matters may be re-opened by the way of appeal by the accused if that person can produce new evidence.
Ratio Decidendi: means ‘the reason for deciding’ or the principle or statement of law (not statement of fact) upon which the decision in a particular case is based. We shall look in greater detail in this concept later in this unit.
Obiter Dictum: means a saying by the way. It is a principle or statement of law (not statement of fact) said in a judgment, which statement of law is not necessary to decide any issue of fact or to decide any question presented for decision in the case. (Obiter dictum singular, obiter dicta plural.)

Reversing: occurs when a higher court on appeal reverses the decision of a lower court. Reversing affects the res judicata, ie the order or judgment of the lower court.


Overruling: occurs when a higher court decides that a proposition of law expounded by a lower court was wrong. The higher court overrules the lower court and thereby affects the ratio decidenti of the lower court decision. The higher court may send the case back to the lower court for the case to be re-tried in light of the new ruling on law.

The Operation of Precedent

You have already been introduced to precedent and to its place in the common law. You will recall that as a principle of law, courts are in some circumstances bound to follow the decision of other courts. This principle is often referred to as stare decisis which means let the decision stand.
You will no doubt realize that the use of precedent is not confined to the courts. There is pressure to use precedent in our day to day existence to ensure fairness and equality: ‘if John Smith was treated in a certain way yesterday then Jill Jones in a similar case ought to be treated in the same way’.

The fact that the notion of precedent affects our daily decisions is borne out by the expression: ‘we would like to grant your application but that would be creating a precedent’.

The need for certainty is another pressure in support the use of precedent. As Lord Justice Scrutton stated:
[I]n my view, liberty to decide each case as you think right without any regard to principles laid down in previous similar cases would only result in a completely uncertain law in which no citizen would know his rights or liabilities until he knew before what judge his case would come and could guess what view that judge would take on a consideration of the matter without any regard to previous decisions.

How to Approach the Study of Precedent

There are two central enquiries: i. Which decisions of which courts in a legal system bind other courts? ii. What part of the decision is binding? What part of a particular decision is the ratio decidenti (called the ‘ratio’) and which part is obiter dictum (if any)? How is a precedent case applied?


Court Practices Regarding Precedent To deal with the first of these enquiries you need to know in some detail the Federal and State court structure (see unit 3). In particular you need to know how courts rank in relation to each other.You then need to know what practices the courts have adopted regarding precedent. The most important of these practices are:

1.  each court is bound by decisions of courts higher in the same hierarchy, eg the Supreme Court of Nigeria binds the the Court of Appeal, High Courts – that is, a binding precedent; 
2. most courts (including the High Court and the Supreme Court) are not bound to follow their own decisions;
3.  courts are not bound to follow decisions of courts outside their own hierarchy but they may find the decision of the other court quite persuasive. For example a judge in the High Court would treat a decision of the House of Lords (the highest court in England) or of the PCJC as very persuasive in reaching a decision on a case before him or her. These are examples of non-binding precedent or persuasive precedents; 
4.  a court even if it is not strictly bound by its own previous will refuse to follow its own decisions in clear cases of error; and 
5.  the fact that a precedent is old does not necessarily weaken its authority. Courts frequently rely on early 19th century cases. Obviously, though, in some circumstances because of changed social conditions the effect of a precedent may be weakened. 

Finding the Ratio

As noted in the introduction to this unit, the process of finding the ratio of a case can be quite elusive. It is a skill acquired over many years of practice and is greatly assisted by having a good knowledge of substantive law. Space does not permit such a study in this course and you are only expected to gain a basic understanding of the process. In reality it is unlikely that a non-lawyer will be confronted with a court decision afresh and will have to decide what is the ratio. Instead you will usually be able to draw on the views of legal authors and possibly later court decisions to assist you.
To try to illustrate the operation of precedent let us consider the famous case of Donoghue v Stevenson [1932] AC 562.

Facts

The plaintiff was with a friend who purchased a bottle of ginger beer for her. The shop keeper opened the bottle of beer and poured a tumbler of ginger beer for the plaintiff. When she had drunk some of this her friend poured the remainder of the contents of the ginger beer into the tumbler and a decomposed snail floated out of the bottle. The result of this, and of the impurities in the ginger beer which she had already drunk, was that the plaintiff suffered shock and severe gastro-enteritis (Vermeesch & Lindgren 1992, p 77).

Issue

The basic question for determination by the House of Lords was whether the manufacturer, the defendant, who had no contractual relationship with the plaintiff, owed her a duty of care under that branch of the law of tort which deals with liability for negligence.

Decision

The House of Lords (by a majority) held that such a duty was owed. It should be realized that this case was regarded as a significant expansion of the law because up until that time it was practically impossible for a consumer (such as the plaintiff in this case) to recover damages from the maker of defective products unless there was a contract between them. Here the plaintiff did not buy the bottle of beer from the retailer, let alone from the manufacturer.
In allowing the plaintiff to recover, what was critical to the court was the fact that the ginger beer, upon being made by the manufacturer, reached the consumer in exactly the same form as it left the factory. Furthermore, given the opaque nature of the bottle there was no chance of seeing the impurity or defect before it was opened. The circumstances therefore placed the consumer and maker of the beer in quite a close legal relationship. The ratio of the case can be taken from the words of Lord Atkin:

…a manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumer’s life or property, owes a duty to the consumer to take reasonable care;

Facts and Law

In the definitions given earlier of ratio decidendi and obiter dictum, statements of law were distinguished from statements of fact. The difference is important. When a judge hears a case the first step is to establish what the facts are. As part of that process the judge will make certain findings of fact. To a large extent these findings are conclusive and will be accepted by any higher court.

In Donoghue v Stevenson the judge who heard the case for the first time (sometimes called the final or primary judge) would have made findings that the plaintiff did drink ginger beer, that it contained a snail, that the bottle was opaque and that as a result of drinking the contents of the bottle the plaintiff became ill.
Statements of law are not so easy to identify because they will contain reference to facts (for a story) and it may be hard for a novice to determine what ‘law’ is. Perhaps the best guide is that statements of law indicate legal relationships, rights or duties and possibly also the consequences of failure to comply with those duties. In Donoghue v Stevenson the statement of law is clearly indicated by the words of Lord Atkin ‘…owes a duty to the consumer to take reasonable care’.

From the Particular to the General

While a judge must make findings of fact, the relevance or materiality of those facts will depend upon how the decision is viewed subsequently. The facts which are material to the res judicata will be different to the ratiodecidendi.Remembering that since the res judicata principle binds the parties to the particular case, the very specific facts of the case are most relevant here. Those facts will be the names of the parties, the date the incident in question occurred, the loss or damage sustained and so on. These are all the facts that will be important if either party wanted to re-open the case (which they are not allowed to do under res judicata). These are the particular facts which may be unique to that case.

The material facts for the ratio decidindi however are quite different. None of the facts referred to above will be relevant. Rather it is the basic story. In Donoghue v Stevenson the material facts (so far as the ratio is concerned) would be:
i. manufacturer of a product designed for consumption;
ii. product reaches consumer in same form as leaves manufacturer;
iii. no reasonable possibility of inspection before consumption;
iv. product negligently manufactured; and
v. causes injury.

You can see here that it is not likely to even be material, that it was ginger beer or that it was a snail that caused the problem. What has been extracted for the ratio are the generalized facts which may subsequently apply to another case although it relates to, say for example, a chocolate bar and not a bottle of ginger beer.

The Ratio as Seen by Later Courts

While one can attempt to decipher the ratio of a case immediately it is handed down, the crucial issue is how is the precedent case treated by later courts. This treatment occurs through the process of distinguishing or extending the ratio.

Distinguishing

Distinguishing happens when a later court refuses to follow the precedent case because it says the precedent case contains relevant facts which are different from the case before it. This is quite a legitimate part of the judicial process. For example, a court in applying Donoghue v Stevenson may say that a material fact in that case was that a product was consumed internally and therefore the precedent is different to where, for example, a product is used, such as a power tool, or is worn such as a garment.
If that was the interpretation placed on the Donoghue v Stevenson ratio then it quite severely limits its impact. Remember that the pivotal point is identifying the material facts. What a later court might regard as material may be different to what the court deciding the precedent case

seemed to think was material. Accordingly, the ratio of the precedent case (which is in essence the material facts plus the decision) will vary according to how it is treated by later court.

Two factors are likely to be crucial in determining whether a later court distinguishes the precedent. They are logic and policy. In viewing a precedent case the later court will ask: is there any logical reason why some limit should be placed on the material facts. To use the Donoghue v Stevenson example given above, is there any logical difference between consuming something internally or using it or wearing it. Probably not and in fact that is what later courts have decided.
The impact of policy is almost certainly harder to identify. This is because quite frequently courts do not spell out what policy factors they have taken into account, if any at all. One reason why there is such reluctance is because courts may not be very well equipped to decide issues to policy. What is policy? It is a collection of reasons why a case should be decided a particular way which goes outside the formal legal process of applying precedent. Policy factors could be economic, social justice, bringing the law up to date, or a desire to introduce certainty or stability. Two policy considerations weighed heavily on the High Court when reaching its decision in the Mabo case.
They were the desire to bring Australian common law into step with international law and the desire to eliminate racial discrimination as a basis for determining land right claims.

Extending the Ratio

The opposite of distinguishing a ratio is where a court extends it. Here the second court might accept that there are differences between the precedent case and the facts before it but they regard the differences as insufficient to distinguish the precedent. Instead, the later court extends the ratio to cover the new situation. This is how the law changes. As with the process of distinguishing, the court is guided by logic and policy.
An Example of Judicial Process

Generally, Donoghue v Stevenson has been well received by later courts and the ratio of the case has been extended to cover a much wider range of situations than the snail in the ginger beer bottle. For example, the case has been extended to include liability for garments negligently produced (in that case underwear had a chemical substance which caused dermatitis) and to repairers.
One area where the courts have hesitated before extending the ratio is into the area of economic or financial loss. Between 1932 and 1964 the courts rejected claims for negligence where the injury suffered by the plaintiff was financial only. They said a material fact in Donoghue v Stevenson was that the injury caused to the plaintiff was physical and that any financial loss (eg medical expenses and loss of wages) stemmed from the physical injury. The courts were concerned that if the duty of care arose where a financial loss only was incurred then too many claims might arise and it would be unfair on the defendant. Such a case would be where an auditor negligently audited the accounts of a company. The financial loss suffered by all those who used the accounts could be vast.
Complex Factors

The important point to note is that the whole process of finding and applying ratios is quite a complex and a variable one. A lot may turn on whether the precedent case is considered solid and well based or whether later courts think it is too expansive (or restrictive). The process is not purely based on logic or some precisely defined legal process and may come down to the personality of the judges involved. In one case, Lord Denning (a famous English judge) stated that the fact that an action was novel did not appeal to him. He noted that in many of the important cases the judges were divided in their opinions. He went on, ‘On the one side there were the timorous souls who were fearful of allowing a new cause of action. On the other side there were the bold spirits who were ready to allow it if justice so required. It was fortunate for the common law that the progressive view prevailed.’ Candler v Crane Christmas (1951) 1 All ER.

SELF ASSESSMENT

1. In what ways are the following terms significant in the doctrine of precedent: Court hierarchy, and ratio decidendi 
2.  How does the doctrine of precedent provide certainty with flexibility? 
3. What are some of the factors that might influence the application of precedent?