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This question is about the doctrine of judicial precedent.
Judicial precedent also called case law. ‘It is the system adopted by judges where the judges follow previous decisions.’1It simply means that the previous decision made by judges in similar cases are binding upon future cases depending on the hierarchy of the court. Therefore, under judicial precedent, a lower court is bound to follow the decision made by a higher court when there is a case which has similar material facts to a case that has decided by a higher court. Whether or not the decision is correct, a court is bound to follow the ratio of any decision by a court above it in the hierarchy. For example, according to the hierarchy of the court system in Malaysia, Court of Appeal, High Court and Sessions Court is under Federal Court. Therefore, Federal Court decision automatically binds the Court of Appeal, High Court and Sessions Court. The diagram of hierarchy refers to appendix 1.
In English Law, the system of binding precedent is called stare decisis. The principle of stare decisis involves ratio decidendi and obiter dictum. ‘Ratio decidendi is the legal principle of the case which is binding on the lower courts. It is also the reason for deciding.’2 Nevertheless, obiter dictum is not binding on the lower courts. ‘Obiter dictum is comments made by the judges.’3It means that “incidental remarks by a judge” which is persuasive only.4 Therefore, the judges have the choice whether to follow or not to follow. If the judges is setting a new precedent and merely making new law because there is a case before him is without precedent then it is called original precedent. However, is the judges is just merely applies an existing rule of law then it is called declaratory precedent.
In the case of Donoghue v Stevenson 5, it is about the plaintiff, Mrs Donoghue went to a café with a friend, who had bought her a drink of ginger beer. She had poured some of the drink into a glass and consumed it. After drinking most of it, she found a decomposed snail inside the bottle while she drinking the ginger beer. After that, Mrs Donoghue became unwell and ill. So, she decided to sue the manufacturer of the ginger beer who is the defendant. On that time, the usual remedy for damage caused by a defective product would be an action in contract. Nevertheless, Mrs Donoghue did not have any contract with the manufacturer of ginger beer even the café owner. The one who have contract with the café owner is Mrs Donoghue’s friend. This is because the ginger beer is bought by her friend but not Mrs Donoghue herself. Although Mrs Donoghue’s friend have contract with the café owner, her friend also cannot sued for remedy damage because her friend did not get hurt by the ginger beer. “As ginger beer was not a dangerous product, and the manufacturer had not fraudulently misrepresented it, the case also fell outside the scope of the established cases on product liability.” 6 The House of Lords had state that the manufacturer of ginger beer owed a duty of care to the Mrs Donoghue. The manufacturer of ginger beer must have duty of care to the end customer of its products. In this case, the manufacture of ginger beer had breached the duty of care. Therefore, Mrs Donoghue is entitled for the remedy of damages. This case is binding on the lower courts because this was a unique case it was decided to first establish. Once this ratio or legal precedent was established other similar claims are followed.
After that, there is another case which is Grant v Australian Knitting Mills Ltd .7 This case is closely related to the Donoghue v Stevenson case. In Grant v Australian Knitting Mills Ltd case, Dr Grant, the plaintiff had bought an undergarment from a retailer. The undergarment is manufactured by the defendant, Australian Knitting Mills Ltd. Dr Grant was contracted dermatitis. The undergarment was in a defective condition owing to the presence of excess of sulphite. It was found that the manufacturer had been negligently left in it in the process of manufacture. In this case, the buyer sued the retailer in contract and the manufacturer in tort. The Privy Council held that the defendants were liable to the plaintiff although there is no privity between Dr Grant and the manufacturer. The decision of this case is bound to the Donoghue v Stevenson case since there are similar cases.
Here, In 2010, Mr. Justice Peter, a higher court judge sitting alone in deciding a case which has similar material facts to one decided by the Court of Appeal in 2009. Based on the explanation of doctrine of judicial precedent and the example of cases above, therefore, he is bound to the decision made by the Court of Appeal.
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Text book, Principles of Business and Corporate Law, Malaysia, pg 20
 AC 562
Text book, Principles of Business and Corporate Law, Malaysia, pg 339
 AC 85
There are some strengths and weaknesses of case law as a source of law.
The first advantage is uniformity. ‘Everyone is treated equally’1 and will get same punishment for the same case or offence. For example, in the case of Donoghue v Stevenson (1932) AC 562, the decision is Mrs Donoghue is entitled for the remedy of damages in the case. Therefore after that, this case is bind. So when there is case which has similar facts with this case – Grant v Australian Knitting Mills Ltd (1936) AC 85, the plaintiff is entitled for the claims of damages by following the case of Donoghue v Stevenson. There is uniformity as everyone is treated equally and it is fair for them.
The second advantage will be certainty. ‘There is certainty because if the problem has been solved before, the court is bound to adopt or follow the solution.’2 Thus, the lawyer can do the research so that they can advise or tell more accurately to their client the punishment of the case. When Grant v Australian Knitting Mills Ltd (1936) AC 85 happened, the lawyer can roughly know what is the punishment or solution to settle up this case as previously there is a similar case – Donoghue v Stevenson (1932) AC 562 happened and the judges have to bind and follow the decision.
Predictability is the third advantage. This is because when there are cases that have similar materials facts with the previous cases, the lawyers can roughly know what is the outcome of the new case. By forecasting the outcome of the case, the lawyers can tell their clients the percentage of the winning rate. [Donoghue v Stevenson (1932) and Grant v Australian Knitting Mills Ltd (1936)] So, the lawyer can refer to Donoghue v Stevenson (1932) and tell their clients what is the percentage of winning the case and what are the solutions for that case or is it worth to continue up this case.
Besides, the other advantage of case law is less legal cost incurred. This is because ‘the case can be resolved and settled quickly’3. When there is a decisions made by judges previously on similar material facts, they can save money. This is because there already have the previous examples, so they can settle the case quickly as they can follow the decisions of the previous one. Then this can shorten the duration of the case, and this can help to save up the legal costs that need to be paid.
Other than that, ‘personality of the judges will not influence the outcome of a dispute in court as judges will be bound to follow the previous decisions.’4 When there is judicial precedent, the judges cannot make the decision by its own thinking or idea which might influence the offender future. This is because every person got their own personalities, included the judges themselves. So one of the advantages is the judges have to follow the previous decisions. So that everyone will get the same punishment and this is fair for everyone.
On the other hand, case law has its disadvantages too which we known it as weaknesses.
One of the weaknesses is bulky and complex. Sometimes there are ‘too many cases and too many laws that no one can learn all of it.’5 When there is a case happened which have the similar material facts with previous one, the lawyer has to refer to the previous case. When lawyer need to read all the cases and refer to them, it is quite complicated for lawyers as they do not know what is the best reference. For example, in the case of Phillips v Brooks  2 KB 243 Horridge J and Ingram v Little  3 All ER 332, CA. The results of these 2 cases are different, but there are similarity facts. Then, in the next case [Lewis v Averay  3 All ER 907, CA] the judges decided to follow the decision of Phillips v Brooks and doubting Ingram v Little. If the lawyer feels that the chance of winning is higher after see the result of case Ingram v Little, at the end it might disappointed them. So, it is so complicated and bulky for the lawyers as they cannot decide which one is the best reference for them.
In addition of that, sometimes it is rigidity or not flexible which means that ‘it may sometimes cause hardship.’6 ‘Once it is created it is binding until it is being overruled.’7 When there are bad decisions made on previous cases, the new case which has the similar material facts with it has to follow the bad decision too. It is so unfair for them.
Lastly, ‘we know that only the ratio of the case is binding in a case.’8 So the weakness of case law is sometimes the ratio decidendi of a case is very difficult to find. So the problem occurs when it is very difficult to tell which part is the ratio decidendi and which is the obiter dictum of the case. For example in the case of Donoghue v Stevenson (1932) AC 562, the House of Lords said the manufacturers had a duty of care to the consumer of their product. Then, this decision that the House of Lords made is certainly encouraging subsequent judges to break out of the shackles of the past, it was thought at the time to be obiter and was regarded as too wide a statement of the law. However, it was approved by Lord Reid in Home Office v Dorset Yacht  2 All ER 294 by saying that it is ought to apply unless there is some justification or valid explanation for its exclusion. Thus, the principle is now treated as ratio at least in relation to physical injury and damage to property which subject to certain limitations. So, sometimes it is difficult for the judges to decide which part is ratio and need to follow or not.
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