The common law is the body of law formed through judgments from the higher courts rather than through statutes or written legislation. The guiding principle of common law systems is that similar cases should receive similar treatment under the law. Common law principles are established and developed through written opinions of judges given at the end of a trial or an appeal. These opinions set precedents, legal rules that are then applied in future similar cases. The doctrine of judicial precedent, the principle under which the lower courts must follow the decisions of the higher courts, is also referred to as stare decisis, which is Latin for “let the decision stand”.
A system based on common law has both advantages and disadvantages. There are three main arguments in favour of such a system: that it is fair, foreseeable and efficient. It is seen as being fair because following precedents in all cases means that all people are treated equally. It is foreseeable because basing decisions on precedent means that potential litigants have a good idea as to how their cases will be decided. Another advantage of the precedent-based common law system is that the judicial process can be relatively fast, as there are already examples in place on which to base a ruling.
The disadvantages include the perpetuation of bad rulings and certain difficulties when there is no precedent for the case before the court. Once a bad decision has been made by a higher court, that decision will remain law until the same court, or a higher court, overrules the decision. Courts do not like to overrule their own decisions unless absolutely necessary, and so bad decisions can remain law for a long time. Another problem area is where the court has no precedent to apply to the case before it. In such cases, a court will have to make a ruling where no previous law existed.
Common law systems do not derive all of their laws from case law. Democratic countries with common law legal systems have legislative bodies at the centre of their democracies. These bodies regularly pass new legislation, which is then interpreted by courts, especially during the appeal stage. Examples of these legislative bodies include the UK Parliament and the US Congress. Large areas of law, for example those relating to property, contracts and torts, are traditionally part of the common law. However, more recently developed areas of law such as employment law and intellectual property law are usually based on statute rather than on common law.