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The most of outstanding characteristic of anglo american law is that it is largely judge made. That is, the bulk of common law and equity has not been enacted by Parliament, but has been developed through the centuries by the judges applying established or customary rules of law to new situations and cases. The principle behind the doctrine of Precedent is that in each case the judges apply existing principles of law. that is, they follow the example or precedent of earlier decisions.
The doctrine of precedent began to develop in the royal courts after the reign of Henry II, and in the equity courts rather later. But it did not become firmly established until the eighteenth century, though it had been widely adhered to before then. It did not take its modern form, however,
until a hierarchy of courts was established by the Judicature Acts 1873-1875.
The general rules governing the standing of judicial decisions is that a decision made by a higher court must be followed by a lower court. Thus; The House of Lords(H.L.) binds all lower courts. Until 1966, H.L. was bound by its own previous decisions. The Court of Appeal(C.A.) is bound by H.L. It also binds itself(since 1944) subject to the following exceptions; ① the
C.A.may choose either of two previous decisions which conflicts with one another. ② the C.A. must follow a H.L. decision, where that conflicts with its previous decision. ③ the C.A. may decline to follow a previous C.A. decision if that was made per incuriam. The High Court is bound by the H.L. and C.A., as well as by decisions of its own divisional courts. High court
decisions bind inferior courts.
When a judge delivers his judgment, he will normally begin by giving a resume of the facts of the case, and then go on to give his decision and the reason for his decision(ratio decidendi). It is ratio decidendi of a judgment, which creates a precedent for the future. Any general comments on law made by the way(obiter dicta) in the course of a judgment, are disregarded in considering what part of the judgment, constitutes the precedent.
If it would lead to injustice in the particular case before him, a judge may refuse to apply an earlier precedent. If the precedent is one laid down by an inferior court he overrule it. But if it was laid down by a superior court he will have to evade the precedent by distinguishing between the case he is deciding and the one in which the precedent was laid down.