Precedent is a judicial decision that serves as an authority for courts when deciding subsequent identical or similar cases. Fundamental to common law legal systems, precedent operates under the principle of stare decisis ("to stand by things decided"), where past judicial decisions serve as case law to guide future rulings, thus promoting consistency and predictability. Precedent is a defining feature that sets common law systems apart from civil law systems. In common law, precedent can either be something courts must follow (binding) or something they can consider but do not have to follow (persuasive). Civil law systems, in contrast, are characterized by comprehensive codes and detailed statutes, with little emphasis on precedent (see jurisprudence constante), and where judges primarily focus on fact-finding and applying the codified law. Courts in common law systems rely heavily on case law, which refers to the collection of precedents and legal principles established by previous judicial decisions on specific issues or topics. The development of case law depends on the systematic publication and indexing of these decisions in law reports, making them accessible to lawyers, courts, and the general public. Generally speaking, a legal precedent may be:
applied (if precedent is binding) / adopted (if precedent is persuasive), if the principles underpinning the previous decision are accordingly used to evaluate the issues of the subsequent case; distinguished, if the principles underpinning the previous decision are found specific to, or premised upon, certain factual scenarios, and not applied to the subsequent case because of the absence or material difference in the latter's facts; modified, if the same court on determination of the same case on order from a higher court modified one or more parts of the previous decision; or overruled, if the same or higher courts on appeal or determination of subsequent cases found the principles underpinning the previous decision erroneous in law or overtaken by new legislation or developments.
Principles
Stare decisis Stare decisis () is a judicial doctrine under which courts follow the principles, rules, or standards established in their prior decisions (or those of higher courts) when deciding cases involving the same or closely related issues. The term originates from the Latin phrase stare decisis et non quieta movere, meaning to "stand by the thing decided and do not disturb the calm." The doctrine operates both horizontally and vertically. Vertical stare decisis binds lower courts to strictly follow the decisions of higher courts within the same jurisdiction. The Seventh Circuit Court of Appeals applying a precedent set by the U.S. Supreme Court is an example of vertical stare decisis. Horizontal stare decisis refers the principle that a court adheres to its own previous rulings. In the modern era, the U.S. Supreme Court adheres to its prior decisions unless there is a special justification to overrule precedent. By taking this approach, the Court has rejected a strict view of stare decisis that would require it to uphold past rulings regardless of their merits or the practical consequences of maintaining or overturning them.
Ratio decidendi and obiter dicta Ratio decidendi ("the reason for the decision") refers to the key factual element or line of reasoning in a case that forms the basis for the court's final judgment. It forms the basis for a court decision and creates binding precedent. This distinguishes it from other parts of a judicial opinion, such as obiter dicta (non-binding observations or comments). In contrast, obiter dicta ("something said in passing") refers to comments, suggestions, or observations made by a judge in an opinion that are not necessary to resolve the case at hand. While not legally binding on other courts, such statements may be cited as persuasive authority in subsequent litigation.
Hierarchy of courts
Federalism and parallel state and federal courts In federal systems the division between federal and state law may result in complex interactions. In the United States, state courts are not considered inferior to federal courts but rather constitute a parallel court system.
When a federal court rules on an issue of state law, the federal court must follow the precedent of the state courts, under the Erie doctrine. If an issue of state law arises during a case in federal court, and there is no decision on point from the highest court of the state, the federal court must either attempt to predict how the state courts would resolve the issue by looking at decisions from state appellate courts, or, if allowed by the constitution of the relevant state, submit the question to the state's courts. On the other hand, when a state court rules on an issue of federal law, the state court is bound only by rulings of the Supreme Court, but not by decisions of federal district or circuit courts of appeals. However, some states have adopted a practice of considering themselves bound by rulings of the court of appeals embracing their states, as a matter of comity rather than constitutional obligation. In practice, however, judges in one system will almost always choose to follow relevant case law in the other system to prevent divergent results and to minimize forum shopping.
Types of precedent
Binding precedent Binding precedent, based on the legal principle of stare decisis, requires lower courts to follow the decisions of appellate courts in the same jurisdiction. In other words, when an appellate court resolves a question of law, its determination, or "holding," serves as precedent that lower courts are bound to apply in cases involving similar facts or legal issues. For example, in the United States, decisions of the U.S. Supreme Court, as the nation's highest court, are binding on all other courts nationwide.
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