The question on judicial precedent being the binding precedent has to be distinctly differentiated. Binding precedent confirms to the hierarchy of courts whereas mere precedent could be persuasive. Today, this doctrine is in the danger of fading off due to the departure mechanism being a tool for judges to move away from the precedent created by higher courts or the same capacity courts. Whilst such endeavor, the question arises does this leads to judges to be a "judicial legislator" i.e. to make law. This discretion apparently is argued as too liberal because the orthodox belief that judge should only interpret statutes and higher court's decision by looking into the "ratio decidendi" and "obiter dicta" is being defeated. Obviously, this is their constitutional role.
The doctrine of "stare decisis" would sufficiently mean all cases which have similar facts that shall be treated alike simply for the reason for the degree of certainty and in order to avoid injustice at the same time restricts unduly development of law to some extent. However, what generally binds is the ratio decidendi which is the material significant decision and not the obiter dicta which is merely the significant opinion or view provided by either assenting or dissenting judges in the higher court. This argument today is being whittle down for the reason of the attitude of judges i.e. the school of thought of declaratory theory and judge made law theory.
Judges who adhere to the declaratory theory of law where the allegiance owed to the parliament which is considered to be the most supreme law making body based on doctrine of parliamentary supremacy and notion of separation of powers, judges consider themselves to be merely interpretative. Those who belonged to this school of thought undoubtedly Ld Simmonds, Ld Hodson and Ld Salmon who do not give room for judicial creativity and label themselves as passivists judge.
On the contrary, some judges do create reasons and do not want to mechanically follow higher court's decision by creating new law or expanding the old law. The question is who lingers on this arguments without doubt is Ld Denning or Ld Woolf who have this contention that they're activist judge whom I would daringly say has created many rooms on judicial creativity. One of the case that ought to be applauded by Ld Denning was Central London Property Trust v High Trees House where he championed the doctrine of Promissory Estoppel and also in the case of Brb v Harington that an occupier owes a duty of care to non-visitors based on grounds of common humanity which later this principle was formed in the Occupier's Liability Act 1984. this evidently shows that activists judges have prompted parliament to enact law while the conservative beliefs would be enactment of Parliament prompted judges to make law.
To reconcile this two position could be an attempt which would be beyond imagination because this is two different world of school of thoughts. It can be easily concluded that it is the attitude of judges respectively that brings about the judge made law theory on their own whims and fancies probably out of necessity and for want of justice.
However, the departing tools of the exception as laid out by Ld Gardiner in Practice Statement 1966 for the HoL and the Young v Bristol Aeroplane exception has seeped into the system besides the distinguishing factors as what Prof. M. Zander profoundly said "distinguishing the indistinguishable" to some extent.
Hence, there seems to be too many opinions on whether this doctrine of binding precedent is a myth or is it a rule of law that all judges should adapt the "stare decisis" attitude. Prof. Glanville Williams found it strange that the authority that precedent is binding them is the normal HoL instead of parliamentary authority. This clearly indicates why should a judge follow higher authority's decision besides parliament. Sir Rubert Cross was on the contrary opinion where he indicated that a judge is bound by ratio decidendi. This jurisprudential debate has been going too long. however, there has been no attempt by parliament to put a stop, hinder or prevent that judge made law theory. But whenever lower courts depart from their decision, [higher courts] they are normally reprimanded and admonished upon an appeal either by overruling or reversing which is best illustrated when Murphy v Brentwood District Council overruled Anns v Merton, Anderton v Ryan being overruled by R v Shivpuri, and DPP v Lynch being overruled by R v Harvey.
The question as to what extent the doctrine of binding precedent allows judges to make law would be to be accurately stated depends on other factors such as some judges would avoid the clutches of an unwelcome precedent. Some judges do not believe in the fairy tales of cases. Some judges believe that an adjudication must be settled according to the growth of time and the sophistication of today's world. some judges also believes that "nakedly usurping the function of parliament" as Ld Simmonds indicated and as what Ld Denning identified his position that at times judges ought to "fill up the gaps" that was unintended by parliament.
Looking at the above argument, it would be wrong to say that the doctrine of binding precedent allows judges to make law; but rather it helps to develop law w/o limits. Another stand would be the various departure mechanisms available to the judge although each mechanism can only be exercised with their respective limitations which again was created by judges has prompted judges to make law rather. As what prof. M. Zander's that precedents should be treated as the next best evidence rule" and judges will always wish to have the best evidence or precedents as the case may be. This view reflects the fluidity and flexibility of the common law system and the actual practice of courts.
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