The English Legal System

Statute law is law created by Parliament through Acts of Parliament (primary legislation). It is the supreme source of law — statute overrides all other sources.

The legislative process: A Bill is introduced in either the House of Commons or House of Lords, passes through several readings and committee stages in both Houses, and receives Royal Assent to become an Act of Parliament.

Delegated (secondary) legislation: Parliament may delegate law-making power to government ministers, local authorities, or other bodies. This takes the form of:

• Statutory instruments (SIs): Regulations made by government ministers under powers granted by an Act (e.g., the Money Laundering Regulations 2017 made under the Sanctions and Anti-Money Laundering Act 2018)
• Orders in Council: Made by the Privy Council
• Bylaws: Made by local authorities or public corporations

Delegated legislation has the force of law but can be challenged in the courts if it exceeds the powers granted by the parent Act (ultra vires).

Statutory interpretation: Courts must interpret and apply statutes. Key rules include:

• Literal rule: Words are given their ordinary, natural meaning
• Golden rule: The literal meaning is followed unless it produces an absurd result
• Mischief rule: The court considers what "mischief" (problem) the Act was intended to remedy and interprets accordingly
• Purposive approach: The court looks at the overall purpose of the legislation (increasingly favoured, especially for EU-derived law)

Common law (also called case law or judge-made law) is law developed by judges through decisions in court cases. When a court decides a case, the legal principles established become precedent — they must be followed by lower courts in future cases with similar facts.

The doctrine of judicial precedent (stare decisis — "stand by what has been decided"):

• A court is bound by decisions of courts above it in the hierarchy
• The Supreme Court (formerly the House of Lords) can depart from its own previous decisions if it appears right to do so (Practice Statement 1966)
• The Court of Appeal is generally bound by its own previous decisions, subject to limited exceptions (Young v Bristol Aeroplane Co [1944])

Key terminology:

• Ratio decidendi ("reason for deciding"): The binding part of a judgment — the legal principle on which the decision is based. This is the precedent that must be followed.
• Obiter dicta ("things said by the way"): Statements made by the judge that are not essential to the decision. Not binding but may be persuasive in future cases.
• Distinguishing: A later court may avoid following a precedent by finding that the facts of the current case are materially different from the earlier case.
• Overruling: A higher court may overrule a decision of a lower court, declaring the previous legal principle wrong.
• Reversing: An appeal court changes the decision of the lower court in the same case.

Equity is a body of legal principles developed by the Court of Chancery to supplement the common law where strict application of common law rules would produce injustice. Where common law and equity conflict, equity prevails (Judicature Acts 1873-1875).

Key equitable remedies:

• Injunction: A court order requiring a party to do or refrain from doing something (e.g., stop breaching a contract, cease infringing intellectual property)
• Specific performance: A court order requiring a party to perform their contractual obligations (used when damages would be inadequate — e.g., contracts for unique property or goods)
• Rescission: Setting aside a contract, returning the parties to their pre-contractual position

Equitable remedies are discretionary — the court is not obliged to grant them (unlike damages, which are available "as of right" at common law). The applicant must come to equity with "clean hands" (must not have acted unfairly themselves).

The simplest form of ADR. The parties communicate directly (or through their lawyers) to try to reach a mutually acceptable settlement without any third-party involvement.

Advantages: No cost (beyond parties' time and legal fees), completely confidential, parties retain full control, maintains the relationship, flexible — any outcome can be agreed.

Disadvantages: Requires willingness from both sides, power imbalances may lead to unfair outcomes, no guarantee of resolution, no binding decision unless a settlement agreement is signed.

A neutral third party (the mediator) facilitates discussions between the parties, helping them to identify issues, explore options, and reach a voluntary agreement. The mediator does not impose a decision — they assist the parties in finding their own solution.

Advantages: Faster and cheaper than litigation, confidential, flexible, preserves relationships (less adversarial than court), high success rate (many mediations result in settlement), parties retain control of the outcome.

Disadvantages: Non-binding unless a settlement agreement is signed (either party can walk away), relies on good faith of both parties, may not work if there is a large power imbalance or if a party is acting in bad faith, mediator has no power to compel a resolution.

The parties refer the dispute to one or more arbitrators (private judges) who hear evidence and arguments and make a binding decision (an "award"). Governed by the Arbitration Act 1996.

Key features:

• Parties usually agree to arbitrate through an arbitration clause in their contract (agreeing in advance that disputes will be resolved by arbitration rather than litigation)
• The arbitrator's award is legally binding and enforceable in the courts
• The process is private and confidential
• The parties can choose the arbitrator (often an expert in the relevant industry or field of law)
• Limited grounds for appeal (courts will only intervene in very narrow circumstances — e.g., serious irregularity, point of law)

Advantages: Binding resolution, confidential (no public court hearing), flexible procedure, can choose specialist arbitrator, generally faster than litigation, internationally enforceable (New York Convention).

Disadvantages: Can be expensive (arbitrator fees, legal representation), limited appeal rights (may be a disadvantage if the arbitrator gets it wrong), formality can approach that of a court hearing, binding nature means no second chance.