Law and the

legal system

Topic list

Syllabus reference

1 What is law?

A1(a)

2 Types of law

A1(a)

3 The system of courts

A1(b)

Introduction
Welcome to your study of corporate and business law. In this chapter we set
the scene and framework of the English legal system.
We start by defining what law is and why it is important to society. Our study
continues by considering the different types of law that we have in the UK and
how they have developed over time.
The chapter concludes with an analysis of the criminal and civil court
systems.

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Study guide
Intellectual level
A

Essential elements of the legal system

Law and the legal system

(a)

Define law and distinguish types of law

(b)

Explain the structure and operation of the courts

Exam guide
The nature of law and the operation of the legal system form a basis for your later studies but will also be
examined as a topic all by itself.

1 What is law?
FAST FORWARD

'Law is a formal mechanism of social control', Business Law 5th Edition, David Kelly, Ann Holmes and
Ruth Hayward
Human society has developed over thousands of years from a primitive culture where the very survival of
the species was at stake to the complex, diverse and dominating species that humans are today.
Much of the success of this development can be attributable to rules and regulations laid down by
society. With a little further study the need for such rules becomes clear. In the early days of human
existence, survival was achieved by working as a group. There was a fine line between life and death, for
example the stealing of food from another group member could eventually result in starvation or death of
the victim.
Social order, created by rules, is at the foundation of the society that we see today. The framework that
was created influences how individuals interact and how businesses operate. In other words, it provides
social control.
The framework of social control can be viewed as having two aspects:
x
x

Formal control mechanisms

Informal control mechanisms

Law is a formal control mechanism. It provides a structure for dealing with and resolving disputes that
may arise, as well as providing some deterrent to those wishing to disrupt social order.
Informal mechanisms include ethical and moral guidance. These are 'norms' or behavioural expectations
that society has developed over time through its culture. Such mechanisms have little formal structure to
organise, control or to punish such matters are dealt with informally by pressure from other individuals
or groups.
PO1 requires you to act diligently and honestly, following codes of conduct, giving due regard to, and
keeping up to date with, relevant legislation.
The contents of this Study Text should help you identify legal and regulatory compliance requirements to
help achieve this.

2 Types of law
The English legal system distinguishes several different types of law.
x
x
4

Common law and equity

Statute law

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x
x

Private law and public law

Criminal law and civil law

2.1 Common law and equity

The earliest element of the English legal system is common law, a system of rigid rules laid down by royal
courts following the Norman conquest. Application of law was by judges who travelled around the country
to keep the King's peace and judgements often resulted in harsh consequences.
The judges actually made the law by amalgamating local customary laws into one 'law of the land'.
Remedies under common law are monetary, and are known as damages.
However, there are times when money is not a suitable remedy. For example, you have agreed to buy a
unique painting from an art dealer. Should the dealer at the last minute sell the painting to someone else,
damages are unlikely to be acceptable, after all you wanted that painting.
Equity was developed two or three hundred years after common law as a system to resolve disputes
where damages are not a suitable remedy and to introduce fairness into the legal system.

2.2 Statute law

Whilst the judiciary is responsible for the creation of common law, Parliament is responsible for statute
law. Statute law is usually made in areas so complicated or unique that suitable common law alternatives
are unlikely, or would take an unacceptable length of time, to develop company law is one example of
this.

2.3 Private law and public law

Most of the law that you will be studying is private law. That is law which deals with relationships and
interactions between businesses, and private individuals, groups or organisations.
The state provides a framework for dealing with disputes and for enforcing decisions, but it is for
individuals to handle matters between themselves. For example, the Sale of Goods Act 1979 regulates the
sale of goods. It provides rules that must be adhered to when making a sale. Should any dispute arise that
is covered by the Act, it is up to the parties to resolve the matter themselves using rules laid down by the
legislation, the state does not get involved.
Public law is mainly concerned with government and the operation and functions of public organisations
such as councils and local authorities. It will not be of great interest to you in your studies of corporate
law, however examples of public law can be found in planning rules that must be adhered to when
building or expanding offices.
A key distinction between public and private law is who takes up the case when a wrong is committed.
The state prosecutes the alleged perpetrator under public law, whereas, under private law it is for the
individual concerned to take action.
Criminal law is a part of public law and deals with behaviour that the state considers unwelcome and
wishes to prevent. Criminal law also decides how those guilty of committing unlawful behaviour should be
punished. You will notice the names of criminal cases are reported as R v Jones or Regina v Jones. This
indicates that the state takes action on behalf of the crown (Regina is Latin for Queen).

2.4 Criminal and civil law

FAST FORWARD

The distinction between criminal liability and civil liability is central to the English legal system.
It is often the criminal law about which the general public has a clearer perception and keener interest.
Some of the high profile criminal cases at London's Old Bailey are deemed extremely newsworthy. Civil
law, on the other hand, receives less overt media coverage. However, every time you buy or sell goods, or

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start or finish an employment contract, your actions, and those of the other party, are governed by civil
law.
The distinction between criminal and civil liability is central to the English legal system and to the way the
court system is structured.

2.4.1 Criminal law

FAST FORWARD

Key term

In criminal cases, the state prosecutes the wrongdoer.

A crime is conduct prohibited by the law.

In a criminal case the State is the prosecutor because it is the community as a whole which suffers as a
result of the law being broken. Persons guilty of crime may be punished by fines payable to the State,
imprisonment, or a community-based punishment.
Generally, the police take the initial decision to prosecute, but this is then reviewed by the Crown
Prosecution Service. Some prosecutions are started by the Director of Public Prosecutions, who is the
head of the Crown Prosecution Service.
In a criminal trial, the burden of proof to convict the accused rests with the prosecution. The prosecution
must meet the standard of proof, which means proving its case beyond reasonable doubt.

2.4.2 Civil law

FAST FORWARD

Civil law exists to regulate disputes over the rights and obligations of persons dealing with each other and
seeks to compensate injured parties.
Civil law is a form of private law. In civil proceedings, the standard of proof means that the claimant
must prove their case on the balance of probability. The claimant must convince the court that it is more
probable than not that their assertions are true.
There is no concept of punishment, and compensation is paid to the wronged person. Both parties may
choose to settle the dispute out of court should they wish.
Terminology in civil cases is different to that of criminal cases. A claimant sues a defendant. A civil case
would therefore be referred to as, for example, Smith v Megacorp plc.
One of the most important areas of civil liability for business, and accountants in particular, is contract
law.

2.4.3 Distinction between criminal and civil cases

It is not an act or event which creates the distinction, but the legal consequences. A single event might
give rise to criminal and civil proceedings.

Illustration
A broken leg caused to a pedestrian by a drunken driver is a single event which may give rise to:
x
x

Criminal case (prosecution by the State for the offence of driving with excess alcohol), and
Civil case (the pedestrian sues for compensation for pain and suffering).

The two types of proceedings can be easily distinguished because three vital factors are different:
x
x
x
6

The courts where the case is heard

The procedures
The terminology

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3 The system of courts

The courts have to be organised to facilitate the working of the legal system. There are four main
functional aspects of the court system which underlie its structure.
(a)

Civil and criminal law differ so much in substance and procedure that they are best administered
in separate courts.

(b)

Local courts allow the vast bulk of small legal proceedings to be decentralised. But important civil
cases begin in the High Court in London.

(c)

Although the courts form a single system, and many courts have a general civil jurisdiction, there
is some specialisation both within the High Court and in other courts with separate functions.

(d)

There is a system of review by appeals to higher courts.

3.1 The civil court structure

FAST FORWARD

The civil court structure comprises the following.

x

Magistrates' Courts mostly deal with small domestic matters.

County Courts hear claims in contract and tort, equitable matters and land and probate disputes
among others.

The Crown Court hears appeals from Magistrates' Courts.

The High Court is divided into three specialist divisions; Queen's Bench, Family and Chancery.

The Court of Appeal hears appeals from the County Court, the High Court, the Restrictive Practices
Court and the Employment Appeal Tribunal.

The Supreme Court hears appeals from the Court of Appeal and the High Court.

The diagram below sets out the English civil court structure.
EUROPEAN COURT
OF HUMAN RIGHTS

SUPREME COURT

leapfrog
procedure

Employment
Appeal
Tribunal
Employment Tribunal

PRIVY
COUNCIL

EUROPEAN COURT
OF JUSTICE

COURT OF APPEAL
(Civil Division)

QBD

HIGH COURT
Family
Chancery

DIVISIONAL COURTS
CROWN
COURT

MAGISTRATES
COURTS

COUNTY
COURT
Appeal
Appeal by way
of case stated

In appropriate cases it is possible to refer a case to either the European Court of Human Rights or the
European Court of Justice, although they are not strictly within the English court structure.

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3.2 The criminal court structure

FAST FORWARD

The criminal court structure comprises the following.

x

Magistrates' Courts hear summary offences and committal proceedings for indictable offences.

The Crown Court tries serious criminal (indictable) offences and hears appeals from Magistrates'
Courts.

The Divisional Court of QBD hears appeals by way of case stated from Magistrates' Courts and the
Crown Court.

The Court of Appeal hears appeals from the Crown Court.

The Supreme Court hears appeals from the Court of Appeal or a Divisional Court of QBD.

The diagram below sets out the English criminal court structure.
EUROPEAN COURT
OF HUMAN RIGHTS

SUPREME COURT

PRIVY
COUNCIL

EUROPEAN COURT
OF JUSTICE

COURT OF APPEAL
(Criminal division)

Divisional Court
of Queens Bench

CROWN COURT
1st instance Rehearing

Appeal
Committal for Committal for 1st instance
trial
sentence

MAGISTRATES COURT

Appeal by way
of case stated
Committal from
magstrates court

A limited number of Commonwealth countries allow appeal to the Privy Council in London, which is
mostly staffed by Supreme Court judges.

3.3 Magistrates' Courts

Magistrates' Courts are the lowest ranked criminal courts.

Key terms

They try summarily (without a jury) all minor offences.

They conduct committal proceedings, which are preliminary investigations of the prosecution
case, when the offence is triable only on indictment (by a Crown Court).

Indictable offences are more serious offences that can only be heard in a Crown Court.
Summary offences are minor crimes, only triable summarily in Magistrates' Courts.
Some offences are 'triable either way', meaning the accused has the choice of court that is used.
Magistrates also have some civil jurisdiction which includes the following:

Family proceedings (financial provision for parties to a marriage and children, the custody or
supervision of children and guardianship, and adoption orders).

Enforcement of local authority charges and rates.

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3.3.1 Appeals
A decision in a criminal case in a Magistrates' Court may be re-heard by a Crown Court. A 'case stated'
appeal on a point of law to a Divisional Court of the High Court is based on the idea that Magistrates or
the Crown Court have wrongly interpreted the law. If they have, then the case may be sent back to the
lower court with instructions as to how it should be decided.
On family matters, appeals are to the Crown Court with a further (or alternative) appeal on a point of law
to a divisional court of the Family Division of the High Court. On other civil matters appeal on a point of
law is to a Divisional Court of the Queens Bench Division (QBD).

3.3.2 Personnel
The key personnel in the Magistrates' Court are the Magistrates who hear the cases. These fall into two
categories:
x
x

Magistrates, who are lay persons (Justices of the Peace) selected by the Lord Chancellor
District Judges (professional paid magistrates)

The Magistrates' Courts are also staffed by clerks, who can provide legal advice for lay Magistrates.

3.4 The County Court

County Courts have civil jurisdiction only but deal with almost every kind of civil case. The practical
importance of the County Courts is that they deal with the majority of the UK's civil litigation.
The County Court is involved in the following matters.
x
x
x
x
x
x
x

Contract and tort (except defamation of character) claims

Equitable matters concerning trusts, mortgages and partnership dissolution
Disputes concerning land
Undefended matrimonial cases
Probate matters
Miscellaneous matters conferred by various statutes, for example the Consumer Credit Act 1974
Some bankruptcy, company winding-up and admiralty cases

3.4.1 Appeals
From the County Court there is a right of appeal direct to the Civil Division of the Court of Appeal for
some cases. In most other cases an appeal goes to the relevant Division of the High Court.

3.4.2 Personnel
The personnel in the County Court consist of:
x
x

Circuit judges, assisted by

District judges

3.5 Civil Procedure Rules

Civil procedures encourage parties to consider alternative methods of dispute resolution and to avoid
expensive litigation, resolving cases quickly and without unnecessary confrontation. Early settlement of
disputes is encouraged during proceedings. The court has the power to control every aspect of the
litigation process, shifting responsibility away from the litigants and their advisers. The court is intended
to be a place of last, rather than first, resort. There are two principal areas in which the civil procedure
rules are relevant, these are tracking and case management.

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3.5.1 Tracking
After a defence has been filed, the case will be allocated to one of three tracks.
(a)

The small claims track, deals with low value claims (typically less than 10,000). These are cases
that are to be dealt with quickly and informally, often without the need for legal representation or
for a full hearing.

(b)

The fast track is for medium value claims (typically 10,000 to 25,000) where the trial is to last
no longer than one day and there is limited need for experts in court. These are subject to a
simplified court procedure and a fixed timetable designed to enable the claim to be determined
within 30 weeks.

(c)

The multi-track is for high value or complex claims (typically over 25,000) which are to be
managed by the courts.

Broadly speaking, small and fast track claims are heard by the County Courts; the more complex multitrack cases are heard by the High Court.

3.5.2 Case management

After allocation, the court will give directions setting out the procedures to be followed in bringing multitrack cases to trial. These will be an initial 'case management conference' to encourage parties to settle
the dispute or to consider alternative dispute resolutions (such as mediation or arbitration). Features of
the procedures include the following.
(a)

Published pre-action protocols for particular types of claim, such as personal injury and
professional negligence claims, which entail setting out the claim to the defendant in an attempt to
negotiate a settlement. The emphasis is placed on co-operation to identify the main issues. Failure
to co-operate may lead to cost penalties, regardless of the eventual outcome of the case.

(b)

A strict timetable for exchange of evidence is set by the court, including witness statements and
relevant documents.

(c)

Cost penalties for failing to meet any deadline or date set by the court.

3.6 The Crown Court

The Crown Court is a single court but it sits in 92 different towns and cities and also at the Central
Criminal Court (the Old Bailey) in London. It deals with the following matters:
x
x
x

Indictable offences with a jury

Appeals from Magistrates' Courts
Committals for sentencing from Magistrates' Courts

The Crown Court deals with a few types of civil case, for example appeals from the Magistrates' Court on
matters of affiliation, betting, gaming and licencing.

3.6.1 Appeals
From the Crown Court there is a right of appeal on criminal matters to the Criminal Division of the Court
of Appeal. An appeal by way of 'case stated' on a point of law may also be made to the Divisional Court of
the Queen's Bench Division, in the High Court.

3.6.2 Personnel
The Crown Court has the following personnel:
x
x
x

10

High Court judges (for serious offences)

Circuit judges
Recorders

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3.7 The High Court

The High Court is organised into three Divisions, each of which hears particular types of case:
x
x
x

Queen's Bench Division (QBD)

Chancery Division
Family Division

Rather confusingly, each Division of the High Court has a Divisional Court. The role of a Divisional Court
is to hear appeals, as we have already seen, from:
x

The Magistrates Courts (on a point of law to Divisional Courts of the Family Division or QBD as
relevant)

The County Court (to one of the three Divisional Courts as relevant)

The Crown Court (on a point of law to the Divisional Court of QBD)

3.7.1 Queen's Bench Division

The Queen's Bench Division deals mainly with common law matters, such as:
x
x
x
x

Actions based on contract or tort

Some appeals from the County Court
Appeals by way of case stated from Magistrates' Courts
Some appeals from the Crown Court

It also has a supervisory role over inferior courts. It is the largest of the three divisions, having 73 judges
of which the Principal Judge is the Lord Chief Justice. It includes a separate Admiralty Court to deal with
shipping matters, and a Commercial Court which specialises in commercial cases. The QBD sits in London
and a small number of large cities in England and Wales. It may issue a writ of habeas corpus, which is an
order for the release of a person wrongfully detained, and also prerogative orders against inferior courts,
tribunals and other bodies such as local authorities.
There are three types of prerogative order.
x

A mandatory order requiring the court or other body to carry out a public duty

A prohibitory order preventing a court or tribunal from exceeding its jurisdiction

A quashing order ordering a court or tribunal which has taken action to submit the record of its
proceedings to the High Court for review

3.7.2 Chancery Division

This division, headed by the Lord Chancellor, deals with traditional equity matters.
x
x
x
x
x

Trusts and mortgages

Revenue matters
Bankruptcy (though outside London this is a County Court subject)
Disputed wills and administration of estates of deceased persons
Partnership and company matters

There is a separate Companies Court within the division which deals with liquidations and other company
proceedings, and a Patents Court established under the Patents Act 1977.

3.7.3 Family Division

This division deals with:
x
x
x
x
x

Matrimonial cases
Family property cases
Proceedings relating to children (wardship, guardianship, adoption, legitimacy)
Appeals from Magistrates' Courts on family matters
Appeals from County Courts on family matters
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11

3.7.4 Appeals
Civil appeals from the High Court may be made to the Court of Appeal (Civil Division) or to the Supreme
Court, under what is known as the 'leapfrog' procedure. This procedure is rarely used.
Criminal appeals are made direct to the Supreme Court where the case has reached the High Court on
appeal from a Magistrates' Court or from the Crown Court.

3.7.5 Personnel
The High Court is staffed by High Court (puisne) judges. The chief judges in each division are as follows:
x
x
x

Queen's Bench Division:

Family Division:
Chancery Division:

Lord Chief Justice

President
Lord Chancellor (nominally), in practice the Vice Chancellor

3.8 The Court of Appeal

Key terms

A court of first instance is the court where the case is originally heard in full. The appeal court is the court
to which an appeal is made against the ruling or the sentence.
If the appeal court finds in favour of the appellant the original decision is reversed, ie the result is
changed, but the law is not. This is different from overruling, which happens when a higher court finds a
lower court's decision to be wrong in law and in future the law is changed.

3.8.1 Civil Division

The Civil Division of the Court of Appeal hears appeals from the High Court, County Courts and certain
other courts and special tribunals. It may uphold or reverse the earlier decision or order a new trial.

3.8.2 Criminal Division

The Criminal Division of the Court of Appeal hears appeals from the Crown Court. It may also be asked to
review criminal cases by the Government or consider points of law at the request of the Attorney General.

3.8.3 Appeals
Appeals lie to the Supreme Court.

3.8.4 Personnel
The Court of Appeal is staffed by the Lord Justices of Appeal. The chief judges in each division are as
follows:
x
x

Civil division:
Criminal division:

Master of the Rolls

Lord Chief Justice

3.9 The Supreme Court

The Supreme Court was established by the Constitutional Reform Act 2005 and opened for business in
October 2009 when it replaced the judicial function of the House of Lords. Its personnel consists of 12
judges known as 'Justices of the Supreme Court' and include a President and a Deputy President.
The role of the Supreme Court is to act as the final appeal court in civil cases in the UK, hearing appeals
on points of law that have public or constitutional importance. It is also the highest court of appeal in
criminal cases for England, Wales and Northern Ireland (the highest criminal appeal court for Scotland is
the Scottish High Court of Justiciary). The Supreme Court may in some instances be called to interpret EU
law and the European Convention on Human Rights as they relate to UK law.

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Cases are typically heard by panels of five, seven or nine Justices who give their verdicts collectively
rather than as individual decisions. This is to encourage discussion among those at the top of the legal
profession, which should result in robust, clear decisions that the rest of the judicial system can rely on.

Exam focus
point

An article on the Supreme Court was included in an edition of Student Accountant and is available on the
ACCA website.

3.10 The European Court of Human Rights (ECHR)

The European Court of Human Rights is the supreme court of those European states which have signed
up to the European Convention of Human Rights. Any individual who alleges that their human rights have
been violated can bring an action against those responsible.
Since the Human Rights Act 1998 the UK has incorporated the European Convention of Human Rights
into UK law, enabling enforcement to be exercised by UK courts.

3.11 The European Court of Justice (ECJ)

The European Court of Justice has the role of interpreting European Treaty law and ensuring it is
observed. European laws are enacted in the UK and are therefore directly applicable to individuals and
businesses within the UK. Cases are usually between nation states or European institutions; however,
individuals can appeal to the ECJ if they are affected personally.
In the Factortame case, the ECJ ruled that the domestic courts of each EU state must ignore any national
laws that are contrary to European Union law. As a consequence, the Supreme Court became effectively
bound by the decisions of the ECJ in relation to EU law.

3.12 The Privy Council

The Judicial Committee of the Privy Council is the final Court of Appeal for certain Commonwealth
countries. Their decisions are also important to cases heard in the UK as they have persuasive influence
over hearings concerning points of law applicable under the UK's jurisdiction.

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Chapter Roundup
x

'Law is a formal mechanism of social control', Business Law 5th Edition, David Kelly, Ann Holmes and
Ruth Hayward

The distinction between criminal liability and civil liability is central to the English legal system.

In criminal cases, the state prosecutes the wrongdoer.

Civil law exists to regulate disputes over the rights and obligations of persons dealing with each other and
seeks to compensate injured parties.

The civil court structure comprises the following.

Magistrates' Courts mostly deal with small domestic matters.

County Courts hear claims in contract and tort, equitable matters and land and probate disputes
among others.
The Crown Court hears appeals from Magistrates' Courts.

The High Court is divided into three specialist divisions; Queen's Bench, Family and Chancery.

The Court of Appeal hears appeals from the County Court, the High Court, the Restrictive Practices
Court and the Employment Appeal Tribunal.
The Supreme Court hears appeals from the Court of Appeal and the High Court.

The criminal court structure comprises the following.

Magistrates' Courts hear summary offences and committal proceedings for indictable offences.

The Crown Court tries serious criminal (indictable) offences and hears appeals from Magistrates'
Courts.
The Divisional Court of QBD hears appeals by way of case stated from Magistrates' Courts and the
Crown Court.
The Court of Appeal hears appeals from the Crown Court.

The Supreme Court hears appeals from the Court of Appeal or a Divisional Court of QBD.

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Quick Quiz
1

Fill in the blanks in the statements below.

The distinction between (1) .. and (2) .. liability is central to the English legal
system.

What is the standard of proof in civil proceedings?

The Employment Appeal Tribunal (EAT) is a court of equal status with the High Court.
True
False

All the following statements relate to criminal and civil law. Which one of the statements is correct?
A

A criminal case may subsequently give rise to a civil case, but a civil case cannot subsequently give
rise to a criminal case.

The main purpose of civil law is to compensate the injured party and to punish the injuring party.

A custodial sentence can be passed on the defendant in a civil case, providing the defendant is a
natural person and not an incorporated body.

The main purpose of civil law is to enforce the claimant's rights rather than to punish the
defendant.

What are the three tracks in the tracking system that allocates civil court cases?

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15

Answers to Quick Quiz

1

(1) criminal (2) civil

The case must be proved on the balance of probability.

True. The EAT is of equal status with the High Court.

D. Punishment is not an objective of civil law. A civil case may subsequently give rise to a criminal case.

(1) small claims track (2) fast track (3) multi-track

Now try the questions below from the Practice Question Bank

Number
1, 2, 3

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Sources of law

Topic list

Syllabus reference

1 Case law and precedent

A2(a)

2 Legislation

A2(b)

3 Statutory interpretation

A2(c)

4 The European Convention on Human Rights

A2(d)

5 The Human Rights Act 1998 (HRA)

A2(d)

6 The Impact of the Act

A2(d)

Introduction
Continuing with our study of the English legal system, we now look at sources
of law and how law is interpreted by the courts.
You will discover that the main law-making bodies are the Courts (who develop
the 'common law') and Parliament (which produces statutes and delegated
legislation).
EU law is another source of law for the UK. Its detail is outside the scope of
your syllabus but you must be aware of it as a source of law.

The rules on statutory interpretation are used by judges when deciding cases
that involve statutes which are open to different meanings.

17
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Study guide
Intellectual level
A

Essential elements of the legal system

Sources of law

(a)

Explain what is meant by case law and precedent

(b)

Explain legislation and evaluate delegated legislation

(c)

Illustrate the rules and presumptions used by the courts in interpreting

statutes

(d)

Identify the concept and impact of human rights law

Exam guide
Questions could be set on the operation of case law and precedent or may focus on how legislation is
passed by government and interpreted by the courts.

1 Case law and precedent

FAST FORWARD

The first legal source of law, consisting of decisions made in the courts, is case law, which is judge-made
law based on the underlying principle of consistency. Once a legal principle is decided by an appropriate
court it is a judicial precedent.

1.1 Common law and equity

The earliest element of the legal system to develop was the common law, a system incorporating rigid
rules applied by royal courts, often with harsh consequences. Equity was developed, two or three hundred
years later, as a system of law applied by the Lord Chancellor in situations where justice did not appear to
be done under common law principles.

Key terms

Common law is the body of legal rules common to the whole country which is embodied in judicial
decisions.
Equity is a term which applies to a specific set of legal principles which were developed by the Court of
Chancery to supplement (but not replace) the common law. It is based on fair dealings between the
parties. It added to and improved on the common law by introducing the concept of fairness.
The interaction of equity and common law produced three major changes.
(a)

New rights. Equity recognised and protected rights for which the common law gave no safeguards.

(b)

Better procedure. Equity may be more effective than common law in resolving a disputed matter.

(c)

Better remedies. The standard common law remedy for the successful claimant was the award of
damages for their loss. The Lord Chancellor developed remedies not available in other courts.
Equity was able to make the following orders.
(i)
(ii)
(iii)
(iv)

That the defendant must do what they had agreed to do (specific performance)
That the defendant must abstain from wrongdoing (injunction)
Alteration of a document to reflect the parties' true intentions (rectification)
Restoration of the pre-contract status quo (rescission)

Where equitable rules conflict with common law rules then equitable rules will prevail.
Case law incorporates decisions made by judges under both historic legal systems and the expression
'common law' is often used to describe all case law whatever its historic origin.

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A court's decision is expected to be consistent with previous decisions and to provide an opinion which
can be used to direct future relationships. This is the basis of the system of judicial precedent.

1.2 Doctrine of judicial precedent

The system of judicial precedent is based on a fundamental feature of English law which is that principles
of English law do not become inoperative through the lapse of time.

Key terms

The doctrine of consistency, following precedent, is expressed in the maxim stare decisis which means
'to stand by a decision'. In any later case to which a legal principle is relevant the same principle should
(subject to certain exceptions) be applied.
A precedent is a previous court decision which another court is bound to follow by deciding a subsequent
case in the same way.
The doctrine of judicial precedent means that a judge is bound to apply a decision from an earlier case to
the facts of the case before him, provided, among other conditions, that there is no material difference
between the cases and the previous case created a 'binding' precedent.
Judicial precedent is based on three elements.
x

Reports. There must be adequate and reliable reports of earlier decisions.

Rules. There must be rules for extracting a legal principle from a previous set of facts and applying
it to current facts.

Classification. Precedents must be classified into those that are binding and those which are
merely persuasive.

1.3 Law reports

There are several major series of law reports bound as annual volumes. In addition, there are several
electronic databases which include cases reported in the paper reports and other cases.
Every case has a title, usually (in a civil case) in the form Carlill v Carbolic Smoke Ball Co. This denotes
Carlill (claimant) versus Carbolic Smoke Ball Co (defendant). In the event of an appeal, the claimant's
name is still shown first, whether they are the appellant or the respondent. All judgements of the superior
courts are given a 'uniform citation' to facilitate publication on the internet.
Some cases are cited by reference to the subject matter. Thus case names have included Re Barrow
Haematite Steel Co (a company case), Re Adams and Kensington Vestry (a trust case) and in shipping
cases the name of the ship, for example, The Wagon Mound.
Some older cases may be referred to by a single name, for example Pinnel's case. In a full citation the title
of the case is followed by abbreviated particulars of the volume of the law reports in which the case is
reported, for example, Best v Samuel Fox & Co Ltd 1952 2 All ER 394 (the report is at p 394 of Vol. 2 of
the All England Reports for 1952).
As regards content a full law report includes details of the following.
x
x
x
x
x
x
x

Names of the parties

Court in which the case was decided
Judge or judges
Date of the hearing
Points of law established
Earlier cases cited
Previous history of the litigation

x
x
x
x
x
x
x

Facts
Names of counsel and their arguments
Verbatim text of the judgement
Order of the court
Whether leave to appeal was granted
Solicitors
Reporting barrister

It is only decisions of the higher courts in important cases (the High Court, the Court of Appeal and the
Supreme Court) which are included in the general law reports.

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Exam focus
point

Students are often perplexed as to how much they are expected to memorise of cases referred to in
textbooks. By far the most important aspect of a case for your examination purposes is what it was about;
that is, the point of law which it illustrates or establishes. This is the knowledge that you must apply
when answering exam questions.
Knowing the facts of some cases is helpful, not least because exam questions may well include scenarios
in which the facts are based on a well-known case.
The doctrine of judicial precedent is designed to provide consistency in the law. Four things must be
considered when examining a precedent before it can be applied to a case.
(a)

A decision must be based on a proposition of law before it can be considered as a precedent. It

may not be a decision on a question of fact.

(b)

It must form part of the ratio decidendi of the case.

(c)

The material facts of each case must be the same or comparable.

(d)

The preceding court must have had a superior (or in some cases, equal) status to the later court,
such that its decisions are binding on the later court.

1.4 Ratio decidendi

FAST FORWARD

Statements made by judges can be classified as ratio decidendi or obiter dicta.

A judgement will start with a description of the facts of the case and probably a review of earlier
precedents. The judge will then make statements of law applicable to the legal problems raised by the
material facts which, if used as the basis for the decision, are known as the ratio decidendi of the case.
This is the vital element that binds future judges.

Key term

'The ratio decidendi of a case is any rule of law expressly or impliedly treated by the judge as a necessary
step in reaching their conclusion, having regard to the line of reasoning adopted by him, or a necessary
part of their direction to the jury.'
(Cross: Precedent in English Law)
Statements made by a judge are either classed as ratio decidendi or obiter dicta. There are two types of
obiter dicta, (which means something said 'by the way').
x
x

Key term

A judge's statements of legal principle that do not form the basis of the decision.
A judge's statements that are not based on the material facts, but on hypothetical facts.

Obiter dicta are words in a judgement which are said 'by the way'.
They do not form part of the ratio decidendi and are not binding on future cases but merely persuasive.
It is not always easy to identify the ratio decidendi. In decisions of appeal courts, where there are three or
even five separate judgements, the members of the court may reach the same conclusion but give
different reasons. Many judges indicate in their speeches which comments are 'ratio' and which are
'obiter'.

1.5 Distinguishing the facts

Although there may arguably be a finite number of legal principles to consider when deciding a case,
there is an infinite variety of facts which may be presented.
It is necessary to consider how far the facts of the previous and the latest case are similar. If the
differences appear significant the court may distinguish the earlier case on the facts and thereby avoid
following it as a precedent.

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1.6 Status of the court

Not every decision made in every court is binding as a judicial precedent. The court's status has a
significant effect on whether its decisions are binding, persuasive or disregarded.
Court

Bound by

Decisions binding on

Magistrates' Court

x
x
x
x

High Court
The Court of Appeal
Supreme Court
European Court of Justice

x No one
x Not even itself

County Court

x
x
x
x

High Court
The Court of Appeal
Supreme Court
European Court of Justice

x No one
x Not even itself

Crown Court

x
x
x
x

High Court (QBD)

The Court of Appeal
Supreme Court
European Court of Justice

x No one

The High Court

consists of divisions:
x Queen's Bench
x Chancery
x Family

x Judge sitting alone

x Judge sitting alone

The Divisional Court

The Court of Appeal
Supreme Court
European Court of Justice

x Judges sitting together

The Court of Appeal

x However, its decisions are

reported more widely and are
more authoritative

Any Divisional Court

The Court of Appeal
Supreme Court
European Court of Justice

x Own decisions
x Supreme Court (subject to an
exception below)

Magistrates' Court
County Court
Crown Court
x Judges sitting together

Magistrates' Court
County Court
Crown Court
Divisional Courts

x All inferior English courts

x Itself (subject to the exception)

x European Court of Justice

Supreme Court

x Itself (except in exceptional cases)

x European Court of Justice

x All English Courts

x Itself (except in exceptional cases)

The European Court of

Justice

x No one
x Not even itself

x All English Courts

1.7 Court of Appeal exception

In Young v Bristol Aeroplane Co 1944, it was decided that the civil division of the Court of Appeal is
usually bound by its own decisions and those of what was the House of Lords, and which is now the
Supreme Court, unless:
x
x
x

Exam focus
point

Two of its previous decisions conflict, when it must decide which to follow
The previous decision conflicts with a subsequent Supreme Court decision
The previous decision was made with a lack of care in relation to either a relevant precedent or
statute (per incuriam)

It is important to learn the operation of the court hierarchy and how courts are bound.

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1.8 Persuasive precedents

Apart from binding precedents, reported conclusions of any court may be treated as persuasive
precedents. Persuasive precedents may be, but need not be, followed in a later case.
A court of higher status is not only free to disregard the verdict of a court of lower status, it may also
deprive it of authority and expressly overrule it. Remember that this does not reverse the previous
decision. Overruling a judgement does not affect its outcome.

Point to note

Where an earlier decision was made by a lower court, the judges can overrule the ratio of that earlier case
if they disagree with the lower court's statement of the law. The outcome of the earlier judgement
remains the same, but will not be followed in future.
If the decision of a lower court is appealed to a higher one, the higher court may reverse the result if they
feel the lower court has wrongly interpreted the law. When a decision is reversed through appeal, the
higher court is usually also overruling the lower court's statement of the law.
If, in a case before the Supreme Court, there is a dispute about a point of European Union law it must be
referred to the European Court of Justice for a ruling. The ECJ does not create or follow precedents as
such, and the provisions of EU directives should not be used to interpret UK legislation.

1.9 Avoidance of a binding precedent

Even if a precedent appears to be binding, there are a number of grounds on which a court may decline
to follow it.
(a)

It may be able to distinguish the facts.

(b)

It may declare the ratio decidendi obscure, particularly when a Court of Appeal decision by three
or five judges gives as many reasons for the decision.

(c)

It may declare the previous decision made per incuriam: without taking account of some
essential point of law, such as an important precedent.

(d)

It may declare it to be in conflict with a fundamental principle of law; for example where a court
has failed to apply the doctrine of privity of contract: Beswick v Beswick 1968.

(e)

It may declare an earlier precedent to be too wide. For example, the duty of care to third parties,
created by Donoghue v Stevenson 1932, has since been considerably refined.

1.10 The advantages and disadvantages of precedent

Many of the strengths of judicial precedent as the cornerstone of English law also indicate some of its
weaknesses.
Factor

Advantage

Disadvantage

Certainty

The law is decided fairly and predictably.

Judges may sometimes be forced to make

illogical distinctions to avoid an unfair
result.

Guidance given to judges and risk of

mistake reduced.

22

Clarity

Following the reasoning of ratio decidendi

should lead to statements of general legal
principles.

Sometimes, judgements may appear to be

inconsistent with each other or legal
principles followed.

Flexibility

The system is able to change with

changing circumstances.

The system can limit judges' discretion.

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Factor

Advantage

Disadvantage

Detail

Precedent states how the law applies to

facts and should be flexible enough to
allow for details to be different.

The detail produces a vast body of reports

to take into account.

Case law is based on experience of actual

cases brought before the courts. This is
an advantage over legislation which can
be found wanting when tested.

Unfair precedents may be created that

allow wrongdoing to be perpetrated.

Practicality

Judges often distinguish on the facts to

avoid a precedent.

2 Legislation
FAST FORWARD

The second major source of law is legislation. This is also known as statute law and may take the form of
Acts of Parliament or delegated legislation under the Acts.
Statute law is made by Parliament (or in exercise of law-making powers delegated by Parliament). Until the
United Kingdom entered the European Community (now the EU) in 1973, the UK Parliament was completely
sovereign.
In recent years however, UK membership of the European Union has restricted the previously unfettered
power of Parliament. There is an obligation, imposed by the Treaty of Rome, to bring UK law into line
with the Treaty itself and with directives. Regulations, having the force of law in every member state,
may be made under provisions of the Treaty of Rome.
One example of an activity that fulfils PO1 is to continually review legislation and regulation that affects
your working environment. Therefore you should maintain your awareness of any legislation identified in
the Study Text which affects your role.

2.1 Parliamentary sovereignty

Parliamentary sovereignty gives rise to a number of consequences. Parliament may
x
x
x

Repeal earlier statutes

Overrule or modify case law developed in the courts
Make new law on subjects which have not been regulated by law before

In practice, Parliament usually follows certain conventions which limit its freedom.
x

No Parliament can legislate so as to prevent a future Parliament changing the law.

Judges have to interpret statute law and they may find a meaning in it which those who promoted
the statute did not intend.

The validity of an Act of Parliament cannot be questioned. However, judges may declare an Act to
be 'incompatible' with the European Convention on Human Rights.

2.2 Types of legislation

In addition to making new law and altering existing law, Parliament may make the law clearer by passing a
codifying statute putting case law on a statutory basis (such as the Sale of Goods Act 1979). It may also
pass consolidating statutes that incorporate an original statute and its successive amendments into a
single piece of legislation (such as the Employment Rights Act 1996 or the Companies Act 2006).

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Legislation can also be categorised in the following ways:

x

Public Acts: legislation that affects the general public

Private Acts: legislation that affects specific individuals and groups

Enabling legislation that empowers a specific individual or body to produce the detail required
by a parent Act

2.3 Parliamentary procedure

A proposal for legislation can be brought by the Government, a backbench MP, or a peer. A government
bill may be aired in public in a Government Green or White Paper. A government bill may be introduced
into either the House of Commons or the House of Lords. When it has passed through one House it must
then go through the same stages in the other House.
In each House the successive stages of dealing with the Bill are as follows.

Stage 1
Stage 2
Stage 3

First reading. Publication and introduction into the agenda. No debate.

Stage 4
Stage 5

Report stage. The Bill as amended in committee is reported to the full House for approval.

Second reading. Debate on the general merits of the Bill. No amendments at this stage.
Committee stage. The Bill is examined by a Standing Committee of about 20 members,
representing the main parties and including some members at least who specialise in the
relevant subject. If the Bill is very important, all or part of the Committee Stage may be
taken by the House as a whole sitting as a committee.
Third reading. This is the final approval stage.

When it has passed through both Houses it is submitted for the Royal Assent which is given on the
Queen's behalf by a committee of the Lord Chancellor and two other peers. It then becomes an Act of
Parliament (statute) but it does not come into operation until a commencement date is notified by
statutory instrument.

2.4 Advantages and disadvantages of statute law

Statute law has the following advantages and disadvantages:
(a)

Advantages
(i)

The House of Commons is elected at intervals of not more than five years. Hence the law
making process is theoretically responsive to public opinion.

(ii)

Statute law can, in theory, deal with any problem.

(iii)

Statutes are carefully constructed codes of law.

A new problem in society or some unwelcome development in case law can be dealt with
by passing an Act of Parliament.
Disadvantages
(iv)

(b)

24

(i)

Statutes are bulky.

(ii)

Parliament often lacks time to consider draft legislation in sufficient detail.

(iii)

A substantial statute can take up a lot of Parliamentary time.

(iv)

Statute law is a statement of general rules. Those who draft it cannot anticipate every
individual case which may arise.

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2.5 Delegated legislation

To save time in Parliament, Acts usually contain a section by which power is given to a minister, or public
body such as a local authority, to make subordinate or delegated legislation.

Key term

Delegated legislation means rules of law, often of a detailed nature, made by subordinate bodies to
whom the power to do so has been given by statute.
Delegated legislation appears in various forms.
x

Ministerial powers are exercised by statutory instruments. Statutory instruments are the most
common form of delegated legislation.

Local authorities are given statutory powers to make bye-laws.

Rules of Court may be made by the judiciary to control court procedure.

Professional Regulations concerning certain occupations (such as law) can be delegated to

authorised bodies (such as the Law Society).

Orders in council. In certain circumstances, the Government may resort to introducing legislation
through the Privy Council as it circumvents the need to go through the full Parliamentary process.

2.5.1 Control over delegated legislation

Parliament exercises some control over delegated legislation by keeping the production of new delegated
legislation under review.
x

Some statutory instruments do not take effect until approved by affirmative resolution of
Parliament.

Other statutory instruments must be laid before Parliament for 40 days before they take effect.

There are standing Scrutiny Committees of both Houses whose duty it is to examine statutory
instruments from a technical point of view and may raise objections if necessary. However, they have no
authority to object to an instrument's nature or content.
A statutory instrument may be challenged in the courts on the grounds that Parliament exceeded its
authority to delegate and has acted ultra vires or that the legislation has been made without due
compliance with the correct procedure. The Human Rights Act 1998 (HRA) does not give courts power to
strike out primary legislation which is contrary to the HRA. However, as secondary legislation, delegated
legislation is not affected and courts are permitted to strike out any delegated legislation that runs
contrary to the HRA.
Both statutes and delegated legislation made under it are expressed in general terms. It is not possible to
provide in the Act for each eventuality which falls within its remit. It therefore often falls to judges to
interpret Acts.

2.5.2 Advantages and disadvantages

Delegated legislation has the following advantages:
x

It saves time as Parliament does not have to examine matters of detail.

Much of the content of delegated legislation is technical and is better worked out in consultation
with professional, commercial or industrial groups outside Parliament.

If new or altered regulations are required later, they can be issued without referring back to
Parliament.

The system allows the law to be enacted quickly.

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The disadvantages of the system are as follows.

Exam focus
point

There are concerns over the accountability of Parliament. Individual MPs and their civil service
staff effectively become the source of law rather than Parliament, the actions of which are open to
questioning and public scrutiny.

The system is unrepresentative in that some power is given to civil servants who are not
democratically elected.

Because delegated legislation can be produced in large volumes, ordinary MPs and the public find
it difficult to keep up to date with developments.

The different sorts of delegated legislation which may be produced by virtue of one statute can
greatly confuse users.

Saving Parliamentary time and the use of experts are key benefits of delegated legislation.

3 Statutory interpretation
FAST FORWARD

Legislation must be interpreted correctly before judges can apply it fairly. The literal, golden and
mischief rules of interpretation developed over time. Nowadays a purposive approach is taken.
Judges are faced with task of applying legislation to the particular case heard before them. To apply the
legislation they must first interpret and understand it. Problems occur when the judge has difficulty
interpreting the statute. There are a number of situations which might lead to a need for interpretation.
(a)

Ambiguity might be caused by an error in drafting or words may have a dual meaning.

(b)

Uncertainty may arise where the words of a statute are intended to apply to a range of factual
situations and the courts must decide whether the case before them falls into any of these situations.

(c)

There may be unforeseeable developments.

(d)

The draft may use a broad term. Thus, the word 'vehicle' may need to be considered in relation to
the use of skateboards or bicycles.

There are a number of different sources of assistance for a judge in their task of statutory interpretation.
x
x
x

Rules
Presumptions
Other aids (intrinsic or extrinsic)

3.1 Rules of statutory interpretation

In interpreting the words of a statute, courts have developed a number of well-established general rules.

3.1.1 The literal rule and golden rule

Key terms

The literal rule means that words in the Act should be given their literal and grammatical meaning rather
than what the judge thinks they mean. It is extended by the golden rule which states that words should be
given their plain, ordinary or literal meaning unless this would give rise to manifest absurdity or
inconsistency with the rest of the statute.
Normally a word should be construed in the same literal sense wherever it appears in the statute. In
Whitely v Chapell 1868 a statute aimed at preventing electoral malpractice made it an offence to
impersonate 'any person entitled to vote' at an election. The accused was acquitted because he
impersonated a dead person, who was clearly not entitled to vote. The case of Re Sigsworth 1935 saw a
son murder his mother. Applying the literal rule to the Administration of Justice Act 1925 would mean that
the son would inherit his murdered mother's estate. The court applied the golden rule, stating that a
murderer should not benefit from their crime and therefore the law would not be interpreted literally in this
case.

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3.1.2 The mischief rule

Key term

Under the mischief rule a judge considers what mischief the Act was intended to prevent. Where a statute
is designed to remedy a weakness in the law, the correct interpretation is the one which achieves it.
In Corkery v Carpenter 1950 the court held that a bicycle was a 'carriage' for the purpose of the Licensing
Act 1872 where a defendant was charged with cycling whilst intoxicated. The purpose of the Act was to
prevent people who are in a state of intoxication from operating any form of transport on public roads.
The case of DPP v Bull saw the defendant (a man) charged with prostitution under the Street Offences Act
1959. However, the Magistrate upheld his defence that the Act in question applied only to females and
therefore the mischief could not be committed by a male. Thankfully, this offensive interpretation has
since been consigned to history when new laws replaced the Street Offences Act.
The 'golden' and 'mischief' rules were used until relatively recently. The Law Commissioners
recommended that judges interpret statute using the general purposes behind it and the intentions of
Parliament. This is known as purposive interpretation.

3.1.3 The purposive approach

Key term

Under the purposive approach to statutory interpretation, the words of a statute are interpreted not only in
their ordinary, literal and grammatical sense, but also with reference to the context and purpose of the
legislation, ie what is the legislation trying to achieve?
Gardiner v Sevenoaks RDC 1950
The facts: The purpose of an Act was to provide for the safe storage of film wherever it might be stored on
'premises'. The claimant argued that 'premises' did not include a cave and so the Act had no application to
his case.
Decision: The purpose of the Act was to protect the safety of persons working in all places where film was
stored. If film was stored in a cave, the word 'premises' included the cave.
The key to the purposive approach is that the judge construes the statute in such a way as to be
consistent with the purpose of the statute as they understand it, even if the wording of the statute could
be applied literally without leading to manifest absurdity.

3.1.4 The contextual rule

Key term

The contextual rule means that a word should be construed in its context: it is permissible to look at the
statute as a whole to discover the meaning of a word in it.
A more purposive approach is also being taken because so many international and EU regulations come
to be interpreted by the courts.

3.2 General rules of interpretation

The following general rules of interpretation have also been developed by the courts.

3.2.1 The ejusdem generis rule

Statutes often list a number of specific things and end the list with more general words. In that case the
general words are to be limited in their meaning to other things of the same kind as the specific items
which precede them. In Powell v Kempton Park Racecourse 1899 it was held that a clause referring to a
'house, office, room or other place' excluded a ring at a racecourse.

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3.2.2 Expressio unius est exclusio alterius

To express one thing is by implication to exclude anything else.

3.2.3 Noscitur a sociis

It is presumed that words draw meaning from the other words around them. If a statute mentioned
'children's books, children's toys and clothes', it would be reasonable to assume that 'clothes' meant
children's clothes.

3.2.4 In pari materia

If the statute forms part of a series which deals with similar subject matter, the court may look to the
interpretation of previous statutes on the assumption that Parliament intended the same thing.

3.3 Presumptions of statutory interpretation

Unless the statute contains express words to the contrary it is assumed that the following presumptions
of statutory interpretation apply, each of which may be rebutted by contrary evidence.
x

A statute does not alter the existing common law. If a statute is capable of two interpretations,
one involving alteration of the common law and the other one not, the latter interpretation is to be
preferred.

If a statute deprives a person of property, say by nationalisation, they are to be compensated for
its value.

A statute is not intended to deprive a person of liberty. If it does so, clear words must be used.
This is relevant in legislation covering, for example, mental health and immigration.

A statute does not have retrospective effect to a date earlier than its becoming law.

A statute does not bind the Crown. In certain areas, the Crown's potential liability is great and this
is therefore an extremely important presumption.

A statute generally has effect only in the UK. However a statute does not run counter to
international law and should be interpreted so as to give effect to international obligations.

A statute cannot impose criminal liability without proof of guilty intention. Many modern statutes
rebut this presumption by imposing strict liability, say for dangerous driving under the Road Traffic
Act.

A statute does not repeal other statutes. Any point on which the statute leaves a gap or omission
is outside the scope of the statute.

3.4 Other assistance in interpretation

Key terms

Intrinsic aids are those words contained in the Queen's Printer's copy of the statute. Extrinsic aids are
those found elsewhere.

3.4.1 The Interpretation Act 1987

The Interpretation Act 1987 defines certain terms frequently found in legislation. The Act also states that,
unless a specific intention to the contrary exists, the use in a statute of masculine gender terminology also
includes the feminine, and vice versa. Similarly, words in the singular include plurals, and vice versa.

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3.4.2 Intrinsic aids

Intrinsic aids to statutory interpretation consist of the following.
x

The long title of an Act, which may give guidance as to the Act's general objective.

The preamble of an Act often directs the judge as to its intentions and objects.

Interpretation sections to Acts. Particularly long, complicated and wide-ranging Acts often contain
self-explanations.

Side notes. Statutes often have summary notes in the margin.

3.4.3 Extrinsic aids

Extrinsic aids include the following.
(a)

Reports of the Law Commission, Royal Commissions, the Law Reform Committee and other
official committees.

(b)

Hansard, the official journal of UK Parliamentary debates. This follows a decision of the House of
Lords in Pepper v Hart 1992 where it was decided that it is acceptable to look at the original speech
which first introduced a bill to ascertain its meaning, but only if the statute is ambiguous or
obscure or its literal meaning would lead to absurdity.

4 The European Convention on Human Rights

FAST FORWARD

The Human Rights Act 1998 is a key example of the influence of international law in the UK.
The Act incorporates the 'European Convention for the Protection of Human Rights and Fundamental
Freedoms' (more commonly referred to as the 'European Convention on Human Rights') into UK
domestic law.
The European Convention on Human Rights is an agreement on basic human rights, put together by
major powers in the wake of the human rights abuses that occurred during World War Two and signed by
those powers, including the UK, in 1951.
During the second half of the 20th century, the European Convention on Human Rights was used as a
guideline in the English courts. It was widely believed that UK political and legal institutions were well
suited to the protection of fundamental human rights and that incorporation of the Convention into
English law was not necessary. However, any individual who felt their rights had been violated could take a
case to the European Court of Human Rights (ECHR) in Strasbourg.
Towards the end of the 1990s, it became clear that the British Government was of the opinion that it was
not sufficient to rely on existing law to ensure protection of human rights. The Human Rights Act was
developed as a means of ensuring that these fundamental rights were enshrined in the English legal
system. English courts now have a statutory duty to ensure that English laws are interpreted 'as far as
possible' in a manner which is compatible with the Convention Rights incorporated by the Human Rights
Act.
Therefore an individual can ask the UK courts to consider their Convention Rights, instead of taking their
case to Strasbourg. However the ECHR remains the final appeal court for human rights issues.

5 The Human Rights Act 1998 (HRA)

FAST FORWARD

The Human Rights Act 1998 incorporates the European Convention on Human Rights (the Convention)
into UK domestic law.
The impact of the legislation is pervasive in many areas of UK law.

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Exam focus
point

The HRA has the potential to affect many different areas of law. You should be aware of its provisions so
that you can see the potential impacts throughout the Corporate and Business law syllabus.
You should also ensure that your knowledge of the Convention is sufficient that you can understand the
impacts which are pointed out, and identify further impacts if required.
The Act binds public authorities (defined as bodies undertaking functions of a public nature). These
include government departments, local authorities, courts and schools. These public authorities must not
breach (or derogate) an individual's rights. In the case of proceedings against a public authority, there is
a limitation period of one year from the date on which the act complained of is alleged to have occurred.
The rights can be relied upon by any individual or non-government organisation including companies.
However, where rights have been derogated, the public authority can mitigate its actions by demonstrating
a legitimate need to derogate and that the derogation was proportionate to the need.

6 The impact of the Act

FAST FORWARD

The Act has had an impact on new legislation, statutory interpretation and the common law.
There are many areas where the Human Rights Act has potential impact on English law. Some ideas of
where the legislation has an effect are summarised here.

Control over
delegated legislation
Statutory
interpretation

Religion

Parliamentary
sovereignty

Discrimination

Age

Dress
code

Employment

English legal system

Tribunals
BUSINESS LAW
CORPORATE LAW
Public authorities'
rights

Tax rights
Company law
Share issues

Voluntary
arrangements
Government investigations

Class rights

The impact of the Act can be considered in the following areas:

x
x
x

Impact on new legislation

Impact on statutory interpretation
Impact on the common law

6.1 Impact on new legislation

The HRA requires the person responsible for a Bill to make a statement of compatibility with the
Convention before the Bill's second reading. Where a Bill is incompatible with the Convention, a
statement to that effect can be made should the Government wish to continue with the Bill anyway.
The Act may affect primary and secondary legislation through the courts for example courts can strike
out secondary legislation that is contrary to the act. However, courts do not have this power where
primary legislation is concerned, but they can issue a declaration of incompatibility should they desire.

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6.2 Impact on statutory interpretation

Under the HRA UK courts are required to interpret UK law in a way compatible with the Convention so
far as it is possible to do so. Existing legislation must therefore be interpreted in a way which is
compatible with Convention Rights. This means that courts must take into account decisions and
judgements of the European Court of Human Rights when hearing a case.
Where legislation can be interpreted in two ways, one compatible with the Convention and one that is
incompatible, courts must follow the interpretation that is compatible. However, if a court feels that
legislation is incompatible with the Convention and that it cannot interpret it in such a way to make it
compatible, it may make a declaration of incompatibility. You should note that such a declaration does
not make the legislation invalid; however, it is up to the legislator to remedy the situation.
Bellinger v Bellinger 2003
The facts: The court had to consider whether or not a male to female transsexual could be treated as a
female under the Matrimonial Causes Act 1973.
Decision: The court was unable to interpret the act to allow the transsexual to be considered female. It did
however issue a declaration of incompatibility.

6.3 Impact on the common law

UK courts must take into account the judgements and decisions of the ECHR when interpreting UK law.
The Act also requires UK courts to take into account the case law of the European Court of Justice when
making judgements. To some extent this affects the doctrine of precedent as it permits the overruling of
English law where it conflicts with the Convention. However, it has only been applied in exceptional
circumstances.

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Chapter Roundup
x

The first legal source of law, consisting of decisions made in the courts, is case law, which is judge-made
law based on the underlying principle of consistency. Once a legal principle is decided by an appropriate
court it is a judicial precedent.

Statements made by judges can be classified as ratio decidendi or obiter dicta.

The second major source of law is legislation. This is also known as statute law and may take the form of
Acts of Parliament or delegated legislation under the Acts.

Legislation must be interpreted correctly before judges can apply it fairly. The literal, golden and
mischief rules of interpretation developed over time. Nowadays a purposive approach is taken.

The Human Rights Act 1998 is a key example of the influence of International law in the UK.

The Human Rights Act 1998 incorporates the European Convention on Human Rights (the Convention)
into UK domestic law.

The impact of the legislation is pervasive in many areas of UK law.

The Act has had an impact on new legislation, statutory interpretation and the common law.

Quick Quiz
1

Obiter dicta form part of the ratio decidendi.

True
False

Which of these decisions bind the Crown Court?

Decisions of the County Court
Decisions of the High Court
Decisions of the Court of Appeal
Decisions of the Supreme Court

In 2010, Mr Justice Jeffries, a High Court judge sitting alone, is deciding a case which has similar material
facts to one decided by the Court of Appeal in 1910. He can decline to be bound by this decision by
showing that
A
B
C
D

The status of the previous court cannot bind him

The decision was taken too long ago to be of any relevance
The decision does not accord with the rules of a statute passed in 1975
The obiter dicta are obscure

Overruling a decision of a lower court affects the outcome of that earlier decision.
True
False

UK Courts must interpret legislation in a way that is compatible with the Convention on Human Rights.
True
False

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Answers to Quick Quiz

1

False. Obiter dicta do not form part of the ratio decidendi.

Decisions of the High Court, Court of Appeal and Supreme Court.

C. A High Court judge is bound by decisions of the Court of Appeal. However, he can decline to be bound
if it conflicts with a principle of law. In this case the 1975 statute has effectively overruled the previous
decision.

False. The decision in that case will stand.

True. UK courts must interpret legislation in a way that is compatible with the Convention and where there
are two possible interpretations, and one is incompatible, they must choose the one that is compatible
with the Convention.
Now try the questions below from the Practice Question Bank

Number
4, 5

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