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A major difficulty with the common law is its uncertainty. This is produced by different courts reaching different interpretations of the law in similar cases or judges reaching the same conclusion for different reasons or different judges reaching different conclusions in the same case. In the latter instances, it will be the opinion of the majority of judges which will decide the outcome of the case. Uncertainty is unavoidable in a rapidly changing society. Although it means unpredictability and surprises, it is the price that has to be paid for maintaining the adaptability and fairness of the law.

Judges try to avoid uncertainty in the law by adhering to the doctrine of precedent. The doctrine of precedent says that judges should follow legal rulings from previously decided cases. Thus, where identical facts occur in two cases, the judge should follow the decision in the earlier case. That case is said to create a ‘precedent’. Of course, it is very rare for cases to have identical facts. This means that if a judge believes that a difference between facts is more important than a similarity, the judge can ‘distinguish’ between the old and new decisions. The precedent will not be followed and a new precedent will be created, but both will be influential. A court should always give reasons for its decision. In this way the courts will try and avoid unpredictability in the law by developing a consistent body of law.

Some of the rules associated with the doctrine of precedent are as follows.

  • A court's decision in each case is binding on the parties to that case.
  • If there is an avenue of appeal or review against a decision, and it is not made within the time limit, the case is settled and cannot be re-opened.
  • If either side appeals to a higher court within the time limit, the higher court can affirm or overrule the lower court's decision.
  • There may be an avenue of appeal to a higher court still and in this case that higher court can affirm or overrule the original court's decision. The decision of the highest court is final.
  • Lower courts must follow decisions of higher courts, but only if they are in the same hierarchy. This means that a decision of a Supreme Court in one State will not be binding on the decisions of a lower court or a Supreme Court in another State. Such decisions will only be ‘persuasive’, that is, they can be used to guide the decision of a court in another State. The same applies to decisions of courts outside Australia. If a case is unusual or difficult, Australian courts may look to overseas decisions in England, New Zealand, Canada and the United States or even the European Union for guidance in deciding a case.
  • The decisions of the High Court of Australia are binding on all Australian courts and tribunals.
  • Courts are not bound to follow their own previous decisions but will usually do so in the interests of achieving consistency. Only if a court comes to the view that a previous decision is clearly wrong will it come to a different decision. The most frequent reason will be that a previous decision is an old one and circumstances have changed.

Courts have also developed a specialised set of rules for interpreting legislation. Sometimes where the Court’s interpretation of legislation causes problems, parliament will intervene by passing legislation to ‘clarify’ the law. Parliament will sometimes also pass legislation to bypass politically unwelcome consequences of judicial decisions.

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