Doctrine of Precedent
The Doctrine of Precedent specifies that a court should apply the rulings of previous cases in situations where the facts are the same. More specifically, a court is bound to do so if the previous case was tried in a higher court, in the same hierarchy (ie, District Court of NSW must follow rulings of the Supreme Court of NSW).
Because of the Doctrine of Precedent, judges decisions thus become law which future judges must follow. That is what is referred to as judge-made law, or common law (as a source of law).
This article is a topic within the subject Introducing Law & Justice.
Prue Vines, Law and Justice in Australia: Foundations of the Legal System, (2nd ed, Melbourne, Oxford University Press, 2009), pp. 328-337 (Chapter 13).
For further information on the doctrine of precedent, see Theories of judicial decision making and the doctrine of precedent
 The Doctrine of Precedent refers to the way judges make the law (and decide cases) by referring to previous decisions (precedents). The justifications of this adherence to precedents are:
- Like cases should be treated alike (consistency).
- Need for certainty in the law.
- Need for predictability
- People should know what the law is in order to obey it.
If the facts of a precedent (of a higher court in the same hierarchy) are similar to the facts of a present case, a court must apply or follow the ratio decidendi (the legal reason behind a ruling).
- When there is no reasonable distinction, it is ' followed '.
- A precedent is ' applied ' when there is some reasonable distinction between the two cases but it is not regarded as one which should be acted on.
- If the facts are different the case may be ' distinguished ' by the lower court and therefore not treated as binding at all.
The Ratio decidendi
R Cross & JW Harris, Precedent in English Law
 Contemporary English judges almost invariably give reasons for their decision in a civil case.
- "It is not everything said by a judge when giving judgment that constitutes a precedent. In the first place, this status is reserved for his pronouncements of the law, and no disputed point of the law is involved in the vast majority of cases that are tried in any year."
- Even from those 'pronunciations of law, only those which are necessary for his decisions are considered precedent.
- Those pronunciations which are not necessary for his decision are called obiter dictum.
- Obiter Dictum are statements made 'by the way'- ones which received less serious consideration than the central ones (which become the ratio). Often they are 'additional' reasons why the ratio is supported.
What is binding
 In some cases (most appeal cases), several judges sit and decide on the case. The outcome is determined by the majority opinion. However, there are instances where a majority of judges agree on an outcome, but through differing legal reasoning. In such a case, it can be difficult for future courts to determine which is the prevailing ratio of the case.
- In such a case, the ratio will be the narrowest version of the legal reasoning which most judges agreed with and led to the same result.
 Courts are bound by decisions of higher courts within the same hierarchy. Common law courts will be more persuasive than civil system courts. English and Canadian decisions are frequently highly persuasive (but not binding), since they are very similar common law systems. Lower court decisions are also persuasive rather then binding.
Textbook refers to Prue Vines, Law and Justice in Australia: Foundations of the Legal System, (2nd ed, Melbourne, Oxford University Press, 2009).