The Doctrine Of Precedent, The Courts And ADR

Objectives:

1. To enable students to explain the meaning of binding precedent;
2. To enable students to illustrate the roles of binding precedent as a source of English law;
3. To enable students to describe the role of courts, jurisdiction and hierarchy of courts; and
4. To enable students to describe each of alternate dispute resolutions.

When people usually think of “the law”, this often conjures up images of people going to court to seek resolution of a dispute they may have with another. Certainly, the courts play a vital role in the arena of law, being not only places where cases are heard, but also where some law may be created.

Further, the courts are central to the creation of some law by the mechanism known as “binding precedent”

1. Case Law – The Doctrine Of Precedent

The Meaning Of Precedent

Judicial precedent is the process whereby judges follow previously decided cases where the facts or point of law are sufficiently similar. It involves the following principles:

1. 1. stare decisis, which means to stand by the decided, whereby lower courts are bound to apply the legal principles set down by superior courts in earlier cases. For example, the High Court must follow decisions of the Court of Appeal, which must follow decisions of the House of Lords.

2. 2. the binding part of a previous decision is the ratio decidendi (reason for the decision) and it must be followed by judges in later cases.

Precedent thus provides consistency and predictability in the law.

Example:-

Donoghue V Stevenson (1932)

The decomposing snail in the bottle of ginger beer case. The HoL held that a manufacturer owed a duty of care to the consumer that products are safe.

“Products” have since been held by later courts to include not only food and drink but also: underpants, motor cars, hair dye, lifts and chemicals.

Grant V Australian Knitting Mills

(1936)

The claimant bought some underwear but the material contained a chemical which caused dermatitis. Compensation was awarded based on the precedent set by Donoghue v Stevenson.

Clearly, underpants are not the same as ginger beer! But, both cases contain the identical factor of manufacturers producing a product/service that is harmful to consumers. Therefore, it is appropriate for the case of Grant to follow the precedent set in Donoghue.

2. The Courts

Hierarchy Of The Courts And Setting Of Precedent

The concept of stare decisis requires a consideration of the effect of precedent in individual courts. All courts stand in a definite relationship to one another. A court is bound by decisions of a court above itself in the hierarchy, and often by a court of equal standing.

Classification Of Courts

The present-day system of courts and tribunals can be classified in a number of different ways:

• Civil and criminal courts
• Some courts deal exclusively with either civil or criminal matters, but the majority hear both civil and criminal cases.

• First instance and appeal courts
  • A court which hears a case for the first time is known as a court of first instance or a court of original jurisdiction, eg magistrates’ courts.
  • A court can make mistakes, so there is provision for appeal to an appeal court. Some courts hear cases both at first instance and on appeal, eg High Court.
• Courts and tribunals
  • • In addition to ordinary courts, Parliament has created a large number of special courts and tribunals to administer various aspects of social and welfare legislation, eg the Lands Tribunal.

• Setting Of Precedent

  European Court of Justice – Under s3 (1) of the European Communities Act 1972, decisions of the ECJ are binding, in matters of Community law, on all English courts

  It is not bound by its own previous decisions, but in order to achieve consistency, will follow them where possible.

  House of Lords – not bound by its own previous decisions until the case of London Street Tramways v London County County Council (1898) when it bound itself in the interests of certainty. Then the Practice Statement (1966), issued by the LC, stated that although the House of Lords would treat its decisions as normally binding it would depart from these when it appeared right to do so.

  Court of Appeal – bound by decisions of the House of Lords even if it considers them to be wrong.

  In Young v Bristol Aeroplane Co Ltd [1944] KB 718, the Court of Appeal (civil division) held that it was bound by its own previous decisions subject to the following three exceptions:

  • • * Where there are two conflicting decisions, the CA must decide which to follow and which to reject.
    • * Where a decision of its own has been overruled by the House of Lords.
    • * The previous decision was given per incuriam (by carelessness or mistake).

  In the criminal division, in addition to the Young exceptions, precedent is not followed as rigidly because a person’s liberty may be at stake. In R v Taylor [1950] 2 KB 368 the Court of Appeal held that if ‘the law has either been misapplied or misunderstood’ then it must reconsider the earlier decision.

  Divisional Courts – bound by the House of Lords and the Court of Appeal and normally follows a previous decision of another Divisional Court but has similar exceptions to the CA.

  High Court – bound by the Court of Appeal and the House of Lords but is not bound by other High Court decisions. However, they are of strong persuasive authority in the High Court and are usually followed. Decisions of individual High Court judges are binding on the county courts.

  Crown Courts – Decisions made on points of law by judges sitting at the Crown Court are not binding, though they are of persuasive authority.

  County Courts and Magistrates’ Courts – decisions of these courts are not binding, but the majority of cases are heard in these lower courts.

  Whilst the most important cases (i.e. those which set a precedent) are heard in the higher courts such as the Court of Appeal or House of Lords, the majority of legal actions take place in the lower courts. However taking action in these lower courts can be a daunting and possibly costly affair for small to medium size businesses.

  Tribunals

  Administrative Tribunals

  What are they?

  The work of ordinary courts is supplemented by a large number of tribunals set up by an Act of Parliament to hear and decide disputes in specialised areas.

  The number of tribunals and the number of cases dealt with rises annually (approximately 250,000 cases a year). This is partially due to the increasing number of statutes which place the resolution of disputes in the hands of tribunals. Well-known statutes that call for the resolution of disputes by a tribunal include the Sex Discrimination Act 1975 and the Employment Rights Act 1996

  The Employment Tribunal

  One of the best known and most common tribunals is the employment tribunal (formerly called the industrial tribunal). When it was established in 1964 it had a very limited jurisdiction, but is now one of the busiest tribunals.

  It sits locally to hear complaints by employees about contracts of employment, unfair dismissal, redundancy, sex and race discrimination in employment and equal pay.

  The tribunal is made up of a legally qualified chairman helped by two lay members, one representing employers and the other representing employees.

  The proceedings are fairly informal, especially as the strict rules of evidence are relaxed. Employees are not entitled to legal aid for a tribunal hearing, but they can be represented by a trade union official or a friend.

  The tribunal’s powers include being able to make awards of compensation. An appeal lies to the Employment Appeal Tribunal, and from there to the Court of Appeal.

  3. Alternate Dispute Resolution (ADR)

  What Is It?

  As the name suggests, an alternative means of solving legal disputes, without resorting to litigation before courts.

  Alternative dispute resolution (‘ADR’) is a term for describing the processes of resolving disputes in place of litigation and includes mediation, conciliation, expert determination, and early neutral evaluation.

  ADR is a suitable alternative to litigation for many disputes.

  The use of ADR in place of litigation is promoted by the Civil Procedure Rules, the courts, and the government.

  The Civil Procedure Rules contain a procedural code with the objective of enabling the court to deal with cases justly.

  The court must further the objective by actively managing cases, and this includes encouraging the parties to use an ADR procedure if the court considers that appropriate, and facilitating the use of such a procedure.

  Failure by the parties to do so may place the party who refuses to consider ADR at risk of adverse consequences in costs.

  Types Of Alternative Dispute Resolution (ADR)

  1. Arbitration

  2. Negotiation

  3. Conciliation/Mediation

  4. Others…

  1. Arbitration

  Arbitration is a step away from formal litigation, but shares with it an essentially adversarial process and the fact that the ultimate decision (made by a third party) is binding. It has been around for several hundred years, and is common in public international law and international trade, but arbitration may be an option in domestic law too. Its distinguishing feature is that the parties in dispute agree to accept as binding the decision of an independent third party. However if there are serious flaws in the arbitrator’s decision, or they have acted contrary to the rules in the Arbitration Act 1996, an appeal may be made to the High Court.

  Most types of arbitration have the following in common:

  • Parties both agree to use the process
  • It is private
  • The decision is made by a third party, not the people involved
  • The process is final and legally binding
  • There are limited grounds for challenging the decision
  • Hearings are often less formal than court hearings. (Note, however, that some forms of arbitration do not involve hearings but are decided on the basis of documents only)

  For employment disputes, the Advisory, Conciliation and Arbitration Service (Acas arbitration) provides arbitration for collective disputes involving groups of employees and now offers an arbitration scheme to handle individual unfair dismissal claims and claims related to flexible working requests.

  Arbitration clauses are now common in contracts, particularly in consumer contracts. Generally such clauses require the parties to the contract to use arbitration for any dispute that arises. In consumer disputes below the small claims limit, however, such clauses are not binding on the consumer.

  The Chartered Institute of Arbitrators (CIArb), an independent body, provides arbitration for consumer and large-scale business disputes.

  How It Works

  Arbitration takes place under strict rules but the process and basis for decision are not as rigidly defined as in court. For example, rules of evidence are not as strict, and parties can usually have a say in how they want the hearing to be conducted. Note that many consumer arbitration schemes are based on documents submitted by the parties and do not involve a hearing.

  Once the parties have decided to use arbitration and the process has begun, they usually give up their right to seek a resolution of the matter elsewhere, such as in court or tribunal. Some providers offer an internet-based arbitration service for money and consumer claims. Others, such as The Association of British Travel Agents (ABTA) make their arbitration service available online, so that all documents can be submitted electronically, e.g. by e-mail.

  Cost

  The cost of arbitration varies. Acas arbitration is free to employers and employees. CIArb schemes sponsored by trade associations or professional bodies, such as ABTA, are subsidised by the sponsoring body’s members and are either free to the consumer or require a registration fee based on the amount of the claim. Online arbitration in most cases requires a fee, often based on the claim value. The fees for private arbitration tend to be higher.

  2. Negotiation

  Virtually all civil disputes are actually settled without ever going anywhere near a court. Even among those cases in which legal proceedings are begun by the issue of a claim form, over 95% are settled before the case comes to trial or arbitration. Parties are encouraged to settle outside court if at all possible.

  There is no set procedure, but successful negotiation typically involves each party in turn stating its position, giving a little ground each time, until they reach a compromise each is prepared to accept. If both sides approach the negotiations with an open mind, concentrating on the problem rather than the personalities, and on real interests rather than entrenched positions, this can provide the best solution for everyone.

  Negotiation can take many forms;

  • Self help
  • By solicitors
  • At the door of the court

  Most cases settle before coming to court or other forms of dispute resolution.

  Self Help

  Often disputes are resolved by the parties themselves. For example faulty goods will usually be exchanged without argument.

  e.g., Neighbours can resolve differences over boundaries, or noise.

  Conducted Initially By Solicitors

  A claimant’s solicitor will contact the defendant’s solicitor and attempt to resolve a dispute without the need for court action, or other forms of ADR.

  At “The Door Of The Court”

  Much court time is saved by barrister’s negotiating a deal immediately before proceedings start.  This is not always a technique of lawyers, sometimes parties get “cold feet” and will grasp a deal if it is offered.

  3. Mediation/Conciliation

  Mediation is widespread in domestic disputes (e.g. divorce and custody cases), but operates in other fields too. An impartial third party acts as mediator, not imposing any decision but encouraging the parties to discuss their differences and to reach their own agreed solution. Mediation is often much quicker than litigation – a £½ million commercial mediation might take just a day or two – and judges often encourage the parties to try mediation before going to court as a last resort. Apart from anything else, it has the advantage of allowing the parties to vent their non-legal grievances, free from the constraints of evidential relevance.

  Mediation is where a 3rd person acts a ‘go between’ and negotiator in an attempt to reach a common resolution between the parties.

  However, it is increasingly being seen as compulsory. This is because cost penalties can be levied against parties that unreasonably refuse to mediate.

  Dunnett V Railtrack [2002] 2 All ER 850, CA

  A woman C claimed damages arising from the death of three horses apparently hit by a train. Her claim failed at trial, but she was given leave to appeal. The judge giving leave advised the parties to try to resolve their dispute by mediation: C was willing, but DD adamantly refused and the appeal went to a full hearing. The Court of Appeal dismissed the appeal but refused DD’s application for costs: a litigant who (in the court’s view) unreasonably rejects alternative means of resolving a dispute may have to pay the penalty.

  The case, concerned damage caused when horses strayed on to a railway line.  It is widely considered to constitute much-needed ammunition for those parties involved in litigation who were genuinely trying to negotiate a settlement rather than end up at trial.

  Held: The principle was established that an adverse costs order could be made against a successful party if that party had refused to mediate.

  Mediation Procedures

  Mediation procedures vary, but typically there is an initial meeting at which each party puts forward its position, followed by private meetings between the mediator and each side in turn, followed by a second plenary meeting in which the mediator helps the parties negotiate face-to-face. The whole process is confidential: lawyers may sometimes be present, but there are rarely any outside witnesses giving evidence.

  No one should disclose what is said to outsiders, but equally the mediator should not disclose to one side (except by consent) the contents of her discussions with the other.

  The mediator is a facilitator rather than a participant in the debate. She may ask probing questions (particularly in the private sessions to determine each side’s “bottom line”), and may tentatively suggest compromises for the parties’ consideration. But she does not express her own opinions except perhaps as a last resort if the process seems to be breaking down; the ultimate decision (which may be enforceable as an ordinary contract once it is reached) is the responsibility of the parties themselves.

  Conciliation

  Basically takes mediation a step further and gives the mediator power to suggest grounds for compromise and a possible basis for a conclusive agreement.  (The term conciliation is often used interchangeably with mediation)

  Conciliation is an assertive, rights-focussed process that fundamentally aims to enable the complainant to exercise his or her rights in law.

  It is used in disputes about access for disabled people to goods and services.  It aims to secure a resolution in response to a particular incident of alleged discrimination which is satisfactory to the complainant.

  If an acceptable resolution is not found, or if a provider refuses to become involved in the conciliation process, then the complainant still has access to the courts to enforce their rights.

  4. Other Types Of ADR

  Ombudsmen

  The office of Parliamentary Commissioner for Administration was created by the Parliamentary Commissioner Act 1967. Her function is to investigate complaints of maladministration by any government department, or any of a number of other public bodies. A complaint can be made by any individual or corporation (other than a public authority), but must be made by the person aggrieved or by someone acting on his behalf; busybodies are not welcome, nor can the Ombudsman begin an investigation on his own initiative.

  Consumer Groups

  An individual with a complaint against a company or public body, who is unable to get a satisfactory response, may be able to get some help by writing to a consumers’ group, TV programme, newspaper, or other similar body. This has no legal force, and the consumer group will not necessarily investigate all the complaints referred to it, but the threat of adverse publicity can often lead to a settlement.