There are two basic sources of law: Positive law and common law.
We will look at both in turn, starting with positive law or positive laws.
Historically, the term ‘positive law’ was meant to distinguish human-made laws – positive laws – from “natural laws”.
One of the scholars that argued in favour of this distinction was Hugo Grotius, a Dutch lawyer and intellectual prodigy.
Natural laws were regarded as universally accepted, as “pre-existing” moral principles that were pre-existing and simply found or discovered by humans.
Today, positive laws are simply a reference to those laws that are enacted by legislative or other official bodies of government.
For instance, in the UK the main legislative body is Parliament – consisting of the House of Commons and House of Lords.
Parliament is the Supreme legislative body that makes the law for England and the UK.
However, there are also certain legislative powers delegated to Wales, Scotland, and Northern Ireland, which are all part of and together form the United Kingdom.
In the US, positive laws are enacted mainly by Congress – consisting of the Senate and the House of Representative – at federal level.
There are also legislative bodies at the state level.
In the US, the states have the power to enact their own laws in areas where the federal government has not acted.
However, states do not possess the power to pass laws that would contradict or violate federal laws.
What happens if there is a conflict between Federal and State law?
The answer to that question lies in Article Six of the US Constitution, the Federal Supremacy Clause.
According to Article Six, federal law is the “supreme law” of the land. It is hierarchically higher than state law.
Therefore, if there is a conflict between state law and federal law, federal law overrides state law.
Positive law is contained in primary sources:
Those are mainly the federal constitution and state constitutions; statutes; regulations; and local ordinances.
Examples of primary sources of law in the area of business include the Sarbanes-Oxley and Dodd Frank Act in the US, or the Companies Act 2006 in the UK. There are of course countless others.
There are also Secondary sources of positive laws. These sources do not contain any laws themselves but, rather, they help establish or interpret the law.
Examples include Restatements – such as the Uniform Commercial Code or the Restatement of Torts – as well as books, treatises, and articles.
When we talk about positive laws, we should also think about how we derive the law from these sources.
Given that laws cannot address every possible situation, it is often necessary to use legal reasoning to understand how a law should apply to a specific context.
In order to do so, courts may engage in the process of statutory interpretation.
The basic options in this regard are as follows:
The first and most straight-forward method is, in simple cases, just to read the text and derive a law’s plain meaning from the text.
A second approach includes looking at a law’s legislative history and intent. This may help to illuminate how legislatures meant for a law to be applied, even if it’s not immediately apparent from the text of a law itself.
A third method is based on public policy: Here, the question is what meaning would be supported by desirable public policies.
Finally, a common method is to look for precedents: this consists of finding previously decided cases that relied on a statutory provision, and then using these decisions as a guide to decide the same or similar factual scenarios.
Of course, in practice, it is often a combination of these methods that courts will use. And, to make things more difficult, it is not always clear which method should be applied and which one should trump the other or others in case they suggest conflicting interpretations.
Common Law And the Stare Decisis Doctrine
Positive law can be contrasted with Common Law as another major source of legal rules.
Common law is the body of law derived from judicial decisions of courts and similar tribunals. In other words, it is judge-made law.
Common law applies, complements, and adds to positive law, filling gaps where necessary.
An important element with respect to common law is the principle of stare decisis – Latin for “stand on decided cases”. Literally translated, it means that once something has been decided, it should be left decided.
Stare decisis works in two ways:
First, it provides that a court is obliged to follow the precedents of superior courts – that would be called vertical stare decisis.
Second, it provides that courts should follow their own prior decisions – that’s called horizontal stare decisis.
In both instances, stare decisis only applies where courts are faced with cases that are based on the same or similar facts as those that gave rise to a previous case or “precedent”. When courts look at precedents, what is of concern is not who won or lost the precedential case but, rather, the legal principles that can be taken from it.
The stare decisis principle applies in the UK and in the US.
In the UK, as the Guide to the Judicial System explains, stare decisis means that “decisions made in the Supreme Court and the Court of Appeal become precedents that must be followed by courts in all future cases.”
The British stare decisis principle is much more straightforward than its counterpart in the United States.
In the US, all courts are bound to follow the rulings of the Supreme Court, as the highest court in the country.
Decision by the Courts of Appeals are binding for lower courts in their districts or circuits.
For example, a decision by the Court of Appeals for the Second Circuit is binding for a federal district court in New York, because New York belongs to the second circuit.
Court of appeals decisions are not binding but still persuasive authority in the other circuits.
Finally, state courts are bound by Supreme Court precedents.
However, they do not need to follow precedents set by federal courts.
But, of course, state courts are required to follow precedents that are set by any superior courts in their own state system.
The stare decisis principle is not absolute.
Indeed, the US Supreme Court has developed a set of principles that allow departures from the requirement to adhere to precedents.
First, this can be permissible where a specific doctrine has become unworkable and irrelevant, or where it has become needlessly obscured by a confusing line of cases, in which courts may need to clarify their prior decisions by issuing a new, workable and clear rule.
Second, departures from stare decisis are justified in instances where society “has not built or organized itself upon the precedent that the court is considering overruling.“ In other words, where a precedent has not been accepted by the people.
Third, departures from precedent are allowed where facts have changed.
A famous example of this is the Supreme Court’s decision in Brown v Board v Education. Brown v Board of Education held that U.S. state laws establishing racial segregation in public schools are unconstitutional, even if the segregated schools are otherwise equal in quality. It stands for the proposition that the idea of “separate but equal” schools is not acceptable.
In Brown v Board of Education, the Supreme Court overruled its earlier decision in Plessy v. Ferguson. The reason why the Court departed from the stare decisis principle was mostly because the facts of the situation had changed. Society had recognized that racism and segregation were evil and unacceptable, where before it had not. Therefore, it was justified in departing from the previous precedent.
Overall, we can see that stare decisis is a fundamental element of the common law.
The advantage of the doctrine of precedent is that it provides certainty and predictability. The disadvantage, however, is that stare decisis can result in a lack of flexibility and an inability to adapt to changing moral, socio-economic, and political realities.
To some extent, however, the possibility of departures from stare decisis mitigate these concerns.