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ACCA F4

Corporate and Business Law (CL)

公司法与商法

ACCA Lecturer: Eli Qiu

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F4:CHAPTER 2 Source of law

Chapter 2: Source of law


CHAPTER GUIDE

Case law and

precedent

Legislation and

delegated legislation

Statute Human rights law


Case law

Common law Equity



Court hierarchy

Stare decisis

Obiter dicta

Overrule/reverse/distinguish

Ratio decidendi



2.1Case law

The first law 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



2.1Case law

Case law operates upon the basis of stare decisis (to stand

by a decision ), whereby judges are bound by the

previous decisions of judgments made by the courts

above them in the hierarchy as follows:

(a) Supreme court –binds all lower courts, but not itself.

(b) Court of Appeal-binds all lower courts, and itself

(c) High court-binds all lower courts and usually itself

(d) Crown/Magistrates/County courts cannot create

precedent



2.2 Case law

The nature of precedent itself operates through the

interpretation of judges decisions, requiring each decision to

be separated into:

(a)Ratio decidendi (the reason for the decision )- this is the

binding element of the judgment

(b)Obiter dirca (statements made by the way)- this is not

binding, but merely of persuasive authority and can be

taken into consideration in later cases



Which of the following is an English court NORMALLY bound

to follow?

A An obiter statement of a higher court

B A ratio of a lower court

C A ratio of a court at the same level

D An obiter statement of the Superme Court

(2014.12)



2.3Established precedents will not binding in the following

circumstances:

(a) overruling- the procedure whereby a court

higher in the legal hierarchy sets aside a legal ruling

established in a previous case. As this is a direct challenge to

the basis of stare decisis the judiciary are reluctant to overrule

longstanding authorities



(b) Reversing

A procedure whereby a court higher in the hierarchy reverses

the decision of a lower court in the same case.

(c) Distinguishing – a precedent is avoided by demonstrating

that the material facts of two cases are not the same



Advantage Disadvantages

Consistency Uncertainty

Efficiency Fixity

Flexibility Bulk

Bulk Unconstitutional



3 UK statute

The second major source of law is legislation. This is also

known as statute law and may take the form of Acts.

Parliament or delegated legislation under the Acts.

3.1 Parliament is deemed to be the supreme law maker in the

UK and consists of 3 bodies, the House of Commons, the

House of Lords, and the Monarch.

3.2 Before a piece of primary UK legislation is passed two initial

stages must be negotiated :

(a) Green paper – public consultation document

(b)White paper- firm proposal for legislation



process

First reading

Second reading

Committee stage

Report stage

Third reading

Other House

Royal assent

Categories

Public acts

Private acts

Enabling acts

Consolidating

Codifying



3.3 legislation can be further categorized as

(a)Public acts – government or private member’s bills

(b)Private acts – powers relating to individuals or institutions,

Such as a company given the power to acquire property through

compulsory purchase orders

(c) Enabling acts – those acts that confer legislative abilities to

delegated bodies

(d) Consolidating legislation – designed to bring together existing

acts without amending them

(e) Codifying legislation – bringing together existing statute with

common law rules such as the Partnership Act 1890



Delegated legislation

Order in council

Professional regulation

Statutory instruments

Byelaws Rules of

court

Advantage Disadvantage

Timesaving Accountability

Expertise Scrutiny

Flexibility Bulk


4.Delegated legislation


5 Illustrate the rules and presumptions used by the courts in

interpreting statute

5.1 Although Parliament creates primary legislation in the UK, it

is the courts that interpret the statute, thereby giving it legal

effect. In order to avoid uncertainty the courts may rely on

presumptions, rules, and use guidance found within and

outsides of the Act.



5.2Presumptions of statutory interpretation

a) Does not alter the common law

b) There is no retrospective effect

c) An individual will not be denied liberty, property ,or rights.

d) The Crown is not bound

e) International laws will be not be broken

f) Strict liability will not be imposed

g) A statute does not repeal other statutes



5.3 Rules of Interpretation

a)Literal rule- words will be given their ordinary dictionary

meaning Whitley V Chappell

b) Golden rule –where the application of the Literal rule results

in manifest absurdity it may be disregarded Re Sigsworth

c)Mischief rule- this enables the judges interpret a statute in

such a way to give the statute the lawful effect for which it was

intended Corkery v Carpenter and DPP v Bull



d)The purposive approach- 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?

e) The contextual rule – 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.



Which of the following is an example of the

purposive approach to statutory interpretation?

A The mischief rule

B The literal rule

C The golden rule

2014.12



5.4 Intrinsic Aids

a)The title-long or short (consider the Dangerous Dogs Act 1991

b)The preamble

c) Schedules of the Act

5.5 Extrinsic Aids

a)The Interpretation Act 1978

b) Hansard

c)Reports of commissions

d)A dictionary



6.1 Human rights -Concept

It operates the civil rights and freedoms of individuals and it

is important to note that the HRA98 is only binding on public

authorities.

a) The rights to life

b) Prohibition of torture

c) Prohibition of slavery and forced labour

d) The rights to a fair trial

e) Freedom of thoughts, conscience and religion

f) Freedom of expression

g) The rights to marry

h) Prohibition of discrimination



6.2 Impact on statutory interpretation

6.2.1 It is now accepted that existing statute in the UK must be

interpreted in light of the HRA98. There is therefore the potential

for conflict with existing statute, and where this is the case the

courts may issue a statement of incompatibility.

6.2.2

Although not invalidating the statute, the statement may trigger

A fast track alteration of an Act, or for the Government to seek a

derogation of the powers of the HRA1998 on grounds of

proportionality.



6.2.3 Similarly a statement of compatibility must be made at

the second reading of a new Act, detailing either

compliance, the need for amendment, or derogation.

6.3Impat on the common law

In a much the same way it impacts on statute,any application

of stare decisis by the courts must now also be in light of the

articles of the HRA98,Should any decision from an

established decided case be in conflict with the HRA98 it

should be set aside. As such the lower courts are now able

to disregard the rulings of even the House of Lords in such

instances.


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