Chapter 5 Case Law as a source of law Flashcards
5.2 The Nature of Judge-made law
Case law covers two types of judge made rules. First judges may state a rule of common law or equity (depending on the case). The second is the role of judges as interpreters of legislation. Case law is a source of law in two ways: where the law is not laid down by legislation and where judges interpret legislation. Statements by judges are declaratory, they declare what the law is and always has been.
There is no common law of taxation, case law operates only in the judge explaining the meaning of tax legislation. A decision on the meaning of a word or phrase in a statute is a point of law.
5.3 The Doctrine of precedent
Case law as a source of law operates in accordance with the doctrine of precedent (or stare decisis). When a judge is deciding the case before them (the instant case) they must do so by following the reasoning process that was used by a judge in deciding an earlier case that is similar to the instant case.
The doctrine provides certainty in a common law system. In order for the doctrine to operate efficiently there needs to be a hierarchy of courts, an efficient way of reporting cases and their judgements, a way of discovering the law laid down in an earlier decision (ratio decidendi) and a clear description as to the application of the doctrine.
5.4 The court hierarchy - supreme court, court of appeal and upper tribunal
Revenue law: court hierarchy (court hierarchy may differ in different jurisdictions).
• The first-tier tribunal (tax chamber) – court of first instance
• The upper tribunal (tax and chancery chamber) – hears appeals from the first-tier tribunal and complex cases at first instance
• The court of appeal civil divisions – hears appeals from the upper tribunal
• The Supreme Court – hears appeals from the court of appeal and in exceptional circumstances direct from the upper tribunal.
The UK Supreme Court – this is the final court of appeal in the UK for tax matters. It hears appeals only on points of law of public interest. Usually 5 judges will hear the appeals. Permission must be obtained in order to appeal before the Supreme Court. The Supreme Court took over the judicial functions of the House of Lords from 1 October 2009.
The Court of Appeal/ Inner House of the Court of Session – hear appeals from the English and Northern Ireland Courts only on points of law. In England and Wales the court is divided into the criminal and the civil division. Tax is in the civil section. The most senior judge in the civil division is called the Master of the Rolls. 3 judges usually hear appeals. Permission must be granted in order to pursue an appeal before the court.
In Scotland there is no court of appeals as such, inner house of the court of session is in its place. The most senior judge is the Lord President.
The Upper Tribunal – is a court of record with jurisdiction throughout the UK. Mainly hears appeals on points of law but in exceptional cases it may be a court of first instance. Judicial reviews are also undertaken by this court. The court is divided into 3 chambers, the tax chancery chamber deals with tax matters, the most senior judge is called the President. One judge hears appeals. Permission must be granted to purse an appeal in the court. The UT took over the appellate jurisdiction of the High Court from 1 October 2009.
5.4 The court hierarchy - FTT
The first-tier tribunal – only a court of first instance unless in exceptional circumstances where the dispute is first heard at the Upper Tribunal. Complex cases require lengthy or complex evidence or a lengthy hearing involving a complex issue or large financial sum. The FTT established the facts of the dispute and makes a decision around it. An appeal of the decision lies with the upper tribunal. The FTT has 11 specialist chambers, the Tax chamber deals with tax matters. The FTT (unlike the other courts) is not a court of record, this means decisions do not form precedent. The FTT deals with all tax disputes that prior to October 2009 was dealt with by the Commissioners for the General purposes of Income Tax, commissioners for the special purposes of income tax and the VAT tribunal.
The appellate committee of the privy council and the court of justice of the EU – these courts are not part of the domestic UK courts. Certain commonwealth countries use the Judicial committee of the Privy council as their final court of appeal. UK supreme Court judges sit as appeal judges in the privy council.
The court of Justice of the EU is a court of reference that can be used by domestic UK courts to decide the meaning of EU law. Their decisions can overrule a decision of the UK Supreme Court. There is also a European Court of Human Rights which can appeal UK Supreme Court decisions.
5.5 Application of the Doctrine of Precedent - Supreme Court, court of appeal and UT
According to the doctrine, when a judge makes a decision, they must follow the reasoning process of a judge before them in a similar case to the instant case. Before following the precedent, the judge must consider whether the precedent forms a binding precedent (they must follow it) or a persuasive precedent (don’t necessarily have to follow it, but normally they should follow it). Whether a precedent is binding depends on which court set the precedent. They can be viewed vertical (between courts with superior/inferior ranking) and horizontally (courts of equal standing).
Supreme Court – decisions are binding for all courts below it. Horizontally the supreme court is not bound by its previous decisions, however they only depart from their decisions in exceptional circumstances.
Court of Appeal – they are bound by the decisions of the Supreme Court. Its own decisions are binding for all the courts below it. Horizontally they are bound by their previous decisions except in three circumstances. Where there are two conflicting decisions, they may choose which to follow, when a ruling does not stand with a later ruling of the House of Lords and where it is satisfied the earlier decision was wrongly decided.
Upper Tribunal - bound by the decisions of the courts above them but the FTT is bound by their decisions. Horizontally they are not bound by their previous decisions. However normally previous decisions are followed.
5.5 Application of the Doctrine of Precedent - FTT and persuasive precedent
First-tier Tribunal – they are bound by the decisions of all the courts above them and its own decisions do not create precedent. The FTT has lots of differently constituted tribunals which may reach independent decisions, this leads to conflicting decisions.
Persuasive precedent – where a court is not bound by another, the first court may regard the decision of the other court as being persuasive. The factors a judge takes when deciding whether a precedent is persuasive is the seniority of the court, the standing of the judge and the length of time the court took to make the decision. The following are key examples of persuasive precedent:
• All obiter dicta – statements of a judge that are not central to the case before them and that are made in passing
• The rationes decidendi of lower courts in the UK hierarchy via-a-vis a court of higher ranking
• Rationes decidendi of courts in other common law systems in the commonwealth and decisions of the privy council
• Dissenting judgements – cases where more than one judge is sitting, the judgement of the judge who disagrees with the outcome of the case
• Minority judgements – cases with more than one judge, the judgement of the judge who agrees with the outcome but does so for different reasons to the other judges
• Writings of authors of repute
• Reports of law reform bodies – such as the Law Commission
Maintaining flexibility in the legal system – a binding precedent must be followed, but there is flexibility to maintain the development of law:
• Precedents may be overruled by Parliament if they pass an Act amending the law the precedent was based on
• Senior courts can overrule the rationes decidendi of lower courts, the decision of the lower court is deemed to have never existed. But old cases are not reopened, this only impacts future cases.
A binding precedent must be followed only where the facts of the instant case are substantially similar of the precedent case. Where the material facts are different, the precedent need not be followed. The precedent case is said to be distinguished from the instant case.
5.7 Case Law of the EU
Judgements from the European Court of Justice have a direct application on UK domestic law. The UK courts must interpret domestic legislation in accordance with EU law and disapply domestic law if they find it to be inconsistent with EU law (precedent set by the 1991 Factortame Case). Following the repeal of the ECA 1992 by the EU withdrawal act 2018, the mechanism for the flow of EU law into UK law has ended, no provision of EU law has effect and the supremacy of EU law has ended. But the EUWA 2018 did convert all existing EU law that had effect in the UK before exit day into domestic law.
