An Introduction To Corporate
Regulation and Standardization

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Precedent

The principle of judicial precedent is that the courts must follow earlier decisions of courts in respect of the law unless they can distinguish from that earlier decision on the facts of the cases. There are other exceptions as set out below. The aim is to create a degree of legal certainty but the exceptions are necessary to allow flexibility and prevent the law from stagnating e.g. after a change in social attitudes.

The basis of a decision is known as the ratio decidendi.

It is this that is binding. In addition the courts may make statements in respect of the law that do not form the basis of the decision but may be persuasive when considered by another Court.

These are known as obiter dicta.

They may take the form of dissenting judgments (where a decision is made by a panel of judges and one or more disagrees with the majority). Another example of obiter dicta is where the case is disposed of on one issue but the Court still stated the law on another issue that arose. The Court may also consider the law in the context of a hypothetical set of facts that may have occurred rather than the facts that did occur.

European Court of Justice
House of Lords
Court of Appeal
High Court
Judicial Review



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An Introduction to Corporate Regulation and Standardization