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covering decision. There may also be doubt about how general an attitude of acceptance need be. These issues cannot concern us here, since it is confidently submitted that the rules are clearly generally

and internally accepted as binding on the Court of Appeal today, despite some few contrary views about rule 2. They are therefore, at most, valid statements of practice, component parts of an ultimate factual rule of recognition.42

IV. RULE THREE AND THE COURT OF APPEAL

Cross's third " rule " states, in effect, that the Court of Appeal is generally bound by its own previous covering decisions. The narrow meaning of a covering decision and the effect this has have already been discussed. If rule 3 binds the Court of Appeal, then it is simply one part of the rule of recognition, or of the settled practices of the system. It is a statement about practice and not a rule of law.

Rule 3 could, as a matter of logic, become a rule of law, as could rule 2. Both rules can become rules of law by virtue of a continued

generally and internally accepted rule of reference to statute as the primary source of law. A statute could be enacted laying down that the Court of Appeal is bound to apply its own covering decisions or those of the House of Lords. It would then be the law that the

Court of Appeal act accordingly. Rule 3 can also theoretically become a rule of law by virtue of rule 2-that is, that it is the

covering decision of a House of Lords case that the Court of Appeal is bound by its own previous decisions. A person might, for instance, be conceded locus standi to apply to the House for a decision on this point alone. Assuming a continued acceptance of rule 2, rule 3 would now be a rule of law. If rule 3 is a rule of law

the conflict of views in Davis v. Johnson becomes of academic

the Practice Statement [1966] 3 All E.R. 77 whereby the Lords of Appeal in Ordinary signified their general agreement that a change in their practice on the binding nature

adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law." The absolute nature of the previous rule of practice as stated in London Tramways v. London County Council [1898] A.C. 375 was mitigated. There has been no judicial dispute about the validity of

the Statement, the new practice being generally and internally accepted by all the judges. Problems might have arisen had the Court of Appeal refused to recognise the change, arguing that the London Tramways practice was still operative, and further revealed this view by ignoring a post-1966 covering decision. Some arguments

Dworkin. It is interesting to note that Dworkin, like Hart, would I think discuss the nature of rules of precedent in terms of practice. His theory of law clearly

involves the rec(gnition and acceptance by the judges (and possibly other officials) of " the settled practices of (their) legal system," that is " the main uncontroversial constitutive and regulative rules of the law in (their) jurisdiction." Rules 1 and 2 are clearly such in their nature, and depend for their existence, effectiveness and validity on their acceptance by the judges. (Dworkin, op. cit. at p. 105.)

interest only. However, there is no covering statutory provision. Neither is there a coveringdecision of the House of Lords. Statements by the Law Lords on rule 3 and the Court of Appeal in

Miliangos, Farrell v. Alexander43 and Davis v. Johnson are not part of the decisions in those cases. Rule 3 is still only a rule of

practice. It is therefore open to discussionamongst the judges in particular,in much the same manner as rule 2 has been discussed

in variouscases.44

The view that rule 3 is a rule of practiceonly has clearlyguided Lord DenningM.R. in his evaluationof staredecisisin the Courtof Appeal.In Davis v. Johnsonhe arguedthat, althoughLord Greene

M.R. in Young v. Bristol Aeroplane Co. Ltd.45had appeared to lay down the propositionin rule 3 as a rule of law, rule 3 in fact " arose onlyias a matter of judicialcomity."46 In 1966the House of Lords had discardedits own rule of practicepreviouslyarticulatedin 1898

in London Street Tramways Co. Ltd. v. London County Council.47

"That shows conclusively,"he stated, "that a rule as to precedent (which any court lays down for itself) is not a rule of law at all. It is simplya practiceor usagelaid downby the courtitself for its own guidance..." 48 It is submitted that this view of the nature of rule

3 is correct. If judicialstatementsabout rule 3 in Miliangos,Davis v. Johnsonlandother recent cases are viewedas concernedwith the

rationale of the practice-perhaps even as indicating a gradual abandonmentof rule 3 because it is becomingno longer generally and internallyaccepted-then much of interestcan be gleanedfrom them. Such interest is twofold-first, in the critical evaluation of

rule 3 (is it a good or bad rule?),land secondlyperhaps,in the con- tinuing movement by the judiciary away from the idea of rule domination in disputes about what the law is towards a more flexibleand principle-basedstance.49

The dispute about the applicabilityof rule 3 in the Court of

43[1976] 1 All E R. 129 (C.A.); [1976] 2 All E.R. 721 (H.L.).

44Salmon L.J. made this point in Gallie v. Lee [19691 2 Ch. 17 at p. 49; and

repeated it as Lord Salmon in Davis v. Johnson [1978] 1 All E.R. 1132 at p. 1152. In Boys v. Chaplin [1968] 2 Q.B. 1 at p. 35, Diplock L.J. said that rule 3 was a fetter which was self-imposed by the Court of Appeal; but he appears to have changed his mind since becoming a Law Lord (see Davis v. Johnson, op. cit. at

the House of Lords could only be of persuasive value and not binding authority. This means that (at p. 140) as a matter of law "if any case came before [us] in which the Court of Appeal had refused to follow one of its own previous decisions on a point of law the appeal would have to be dismissed if the final appellate tribunal concluded that the previous decision was wrong." The decision being appealed against could not, it seems, simply be ignored as being itself not a legal decision at all

49 I offer this merely as an aside. Cf. P. S. Atiyah, From Principles to Pragmatism, an Inaugural Lecture delivered before the University of Oxford on February 17, 1978.

148 THE MODERN LAW REVIEW [Vol. 43

decisions except in three cases. (1) The Court can decide which of two conflicting decisions of its own it will follow. (2) The Court must refuse to follow a decision of its own which cannot, in its opinion, stand with a decision of the House of Lords. (3) The Court need not

follow a decision of its own if that decision was given per incuriam. A fourth exception can be cited, following the Schorsch Meier/ Miliangos litigation, although it may be no more than a very clear instance of the third exception. (4) The Court must not apply a previous covering decision of its own, if it was reached through not applying a clear covering decision of the House of Lords (or, indeed,

a covering statutory provision).62 Rule 3 thus primarily operates in

disputes when there is a single previous covering decision, or a string of cases offering the same covering decision. Such disputes must, under rule 3, be resolved by applying that covering decision, regardless whether it provides a suitable result or not.

What reasons are given in the evaluation of rule 3?

A.Arguments in favour of rule 3

Al. The argument that rule 3 is binding on the Court of Appeal in a stronger sense than its being merely a rule of practice

generally and internally accepted

Many judges hold that rule 3 cannot be abolished simply by an

agreed change in practice, by arguing that the Court of Appeal is in some sense bound because rule 3 is a rule of law. This argument has been rejected as a mistaken view of the nature of rules of precedent. Nevertheless, it is of interest to examine three different approaches,

all of them questionable, to the rule of law argument, since judges use this mistaken argument as a basis from which to present positive reasons favouring rule 3. First, rule 3 is a rule of law by virtue of

the Court of Appeal's decision in Young v. Bristol Aeroplane Co., " confirmed " on the point by the House of Lords. In other words,

rule 3 pre-existed itself, which is strange logic. In Miliangos Lord Simon of Glaisdale said ".... it is clelarlaw that the Court of Appeal is bound... (at least on its civil side) by a previous decision of the Court of Appeal itself: Young v. Bristol Aeroplane Co. Ltd. Any

change in this respect would require legislation." 63 He repeated this view in Farrell v. Alexander.64 In Davis v. Johnson Goff L.J.

argued that the view that the Court of Appeal followed its own decisions only because of custom or comity had been fully argued

62 Further exceptions to the general nature of rule 3 have been expounded in Boys v. Chaplin and Worcester Works Finance Ltd. v. Cooden Engineering Co. Ltd.

(see Cross, Precedent, pp. 144-145). Lord Denning M.R. in Davis v. Johnson listed numerous exceptions "created" since Young's case, see [1978] 1 All E.R. 841 at

pp. 856-857, and said that " the list of exceptions . . . is now getting so large that they are in process of eating up the rule itself . . ." (p. 857). Notice also the

readiness in Davis v. Johnson to create a new exception to cover that case, from Lord Denning M.R., Sir George Baker P., and Shaw L.J.

63 [1976] A.C. 443 at pp. 470-471.

.64 (197612 All E.R. 721 at p. 741.

Mar. 1980] PRECEDENT IN THE COURT OF APPEAL 149

hore argued that rule 3 is a rule of law binding the Court of Appeal.66 In fact, only Lord Salmon appears to have accepted the analysis of rule 3 as a rule of practice.67Secondly, rule 3 has become a rule of law by length of service, simply because it has been accepted and acted on for over 30 years. Custom makes valid law. In Farrell v. Alexander Lawton L.J. said: "For me Young v. Bristol Aeroplane Co. Ltd. provides the authoritative decision. It has stood without criticism from the House of Lords for 31 years. It has been followed time and time again. I regard it as a part of the law which it is my judicial duty to apply." 68 This argument was repeated by Goff L.J. and Lord Diplock in Davis v. Johnson. Thirdly, rule 3 is more than a rule of practice because the House of Lords has time and time again confirmed it. This is to apply too far-reaching a version of rule 2. Cumming-Bruce L.J. in Davis v. Johnson thought that the Court of Appeal was bound to act in accordance with Young's case, since the practice there stated had been approved in the House. "... I consider that the constitutional functions of their

Lordships sitting in their judicial capacity include the function of defining with authority the exceptional situations in which it is open to this court to depart from a previous decision." 69

A2. The certainty argument

Certainty in the law " has great value in enabling persons to obtain definite 'advice on which they can order their affairs," 70 and rule 3 is widely believed as vital to certainty because it provides for con- sistency.71 Like cases must be decided alike, not only to achieve distributive justice, but primarily to maintain certainty. The Court of Appeal, in occupying a central position in the judicial system, "is

responsible for its stability, its consistency, and its predictability." 72 The Court

" sits always in divisions of three, more judges can sit to hear a case, but their decision enjoys no greater authority than a

65[1978] 1 All E.R. 841 at p. 865.

66[1978] 1 All E.R. 1132 at p. 1136 (per Lord Diplock), and p. 1146 (per Viscount

Dilhorne).

67Ibid. at pp. 1152-1153.

68[1976] 1 All E.R. 129 at p. 141.

71 See, for example, Russell L.J. in Gallie v. Lee; Stephenson L.J. in Barrington

v. Lee; Stamp and Scarman L.JJ. in Tiverton Estates Ltd. v. Wearwell Ltd.; Lord Denning M.R. and Geoffrey Lane L.J. in Miliangos; Scarman L.J. and Lord Simon

in Farrell v. Alexander; Goff L.J., Cumming-Bruce L.J., Lord Diplock and Lord Salmon in Davis v. Johnson.

72 [19761 1 All E.R. 129 at p. 147 (per Scarman L.J.).

court composed of three. If, therefore, throwing aside the restraints of Young, one division of the court should refuse to

follow another because it believed the other's decision to be

wrong, there would be a risk of confusion and doubt arising where there should be consistency and certainty."73

Because of the Court's structure litigation will be very much a gamble on which division is to handle the appeal.74Certainty must not be sacrificed to a flexibility which true individual justice can sometimes warrant. "We must take care lest in

straighten out the law we bend it until it breaks." 75

A3. The floodgates argument

Some advocates of the certainty argument see an almost irresistible trend towards more litigation if rule 3 is abolished. There will

be nothing in law to prevent a division of the Court departing from an earlier decision if good arguments of principle are presented and

potential challengers of previous decisions will thus feel that there is more chance of succeeding in any challenge.76

A4. "The difference between the Court of Appeal, and the House of Lords and Parliament" argument

The Court of Appeal is not in the same position with regard to the " rules of precedent " as is the House of Lords. The logic behind

the altered practice of the House in 1966 does not apply to the Court. The House is the court of last resort, and therefore needs

special power to review its own previous decision. In theory Parliament can correct errors of the House of Lords, but in practice this cannot happen as often as it should. Therefore the House of

Lords needs to be able itself to correct any errors. The most forceful

exposition of this view came from Viscount Dilhorne in Davis v. Johnson.77

The Court of Appeal is only an intermediate appellate court

(except in a few well-defined circumstances) and " the appropriate forum for the correction of the Court of Appeal's errors is the

House of Lords, where the decision will at least have the merit of

being final and binding-subject only to the House's power to review its own decisions." 78 In Barrington v. Lee Stephenson L.J.

went further to suggest that if the Court refused to follow a previous

73[1975] Ch. 146 at p. 172 (per Scarman L.J.).

74See, for example, Lord Salmon [1978] 1 All E.R. at p. 1153.

75[197113 All E.R. 1231 at p. 1245 (per Stephenson L.J.).

76See, for example, Russell L.J. in Gallie v. Lee, and hints from Lord Simon in Farrell v. Alexander and Scarman L.J. in Tiverton Estates and Farrell v. Alexander.

78 [19751 Ch. 146 at pp. 172-173 (per Scarman L.J.). See also Russell L.J. in Gallie v. Lee.

covering decision it would be " usurping the function of the House of Lords-or Parliament." 79

B.Arguments against Rule 3

What arguments are presented either to counter the arguments put in favour of rule 3, or to argue positively that rule 3 ought to be discarded?

Bl. The argument that rule 3 is a self-imposed limitation of practice, and being self-imposed can be abolished

This argument has two aspects. First, rules of precedent are

propositions about practice which are, therefore, capable of being changed by a mere change in practice-this point has been argued. Acceptance of it is a prerequisite to any valid change in rule 3 without a change in the law by legislation or a covering decision of the House of Lords. Secondly, a self-imposed fetter can be abolished. However, there are different views on the necessary measure of general acceptance before rule 3 is effectively abolished. Lord Denning M.R. clearly believes that a three-man division of the Court of Appeal can validly alter practice for the whole Court for the future. The view of Salmon L.J. in Gallie v. Lee is, however,

preferable. He said: "It is, I think, only by a pronouncement of the whole court that we could effectively alter a practice which is so deeply rooted,"80 and he repeated this view as Lord Salmon in Davis v. Johnson.81 Goff L.J. in Davis v. Johnson also accepted this view. There is only adequate evidence of acceptance of a new prac- tice if and when the practice becomes as general as possible. One can argue, of course that acceptance must be general amongst all

judges, particularly in the House of Lords, Court of Appeal and High Court. Such position has clearly not as yet been reached over any proposed alteration of rule 3. It is, however, clear that a change in practice is possible, although a new practice becomes valid as part of the rule of recognition only when it satisfies a measure of generality. What positive reasons are given in favour of such a

change?

B2. The purity of justice argument 82

Where a decision is erroneous, it ought to be corrected, as a

79 [197113 All E.R. 1231 at p. 1244. so [196932 Ch. 17 at p. 49.

81 [1978] 1 All E.R. 1132 at p. 1153.

82 In Attorney-General of St. Christopher, Nevis and Anguilla v. Reynolds [1979] 3 All E.R. 129, Lord Salmon suggested (at p. 140) that the purity of justice argument has no real value as an argument in favour of abandoning rule 3 because it is

possible to use it to say that all judges have a good reason in certain circumstances for declining to follow not only previous covering decisions in their own tier of the

judicial system but more problematically also previous covering decisions of the courts of the higher tiers in the system. "Their Lordships consider that if this became the accepted practice of the courts the law would become so uncertain that

people after the laws and usages of this Realm.' "84 Shaw L.J. said: " One has to ask in a particular case whether a rigid adherence to what appears to be plainly wrong conduces to the purity of justice or respect for its administration."85 There is, it is submitted, something disturbing about the view that the Court of Appeal, finding a bad covering decision of its own, must apply it regardless of merit, particularly when one realises that in many cases that Court is in practice the ultimate court. (This point will be developed in argument B5.) Both individual and distributive justice may require that a rule applied hitherto, but regarded as wrong, must be

changed.86

B3. The dishonesty and confusion arguments

In Eastwood Ltd. v. Herrod Lord Denning M.R. made two points. First, the strict nature of rule 3 urging towards applying rules even when mistaken leads to an " endless task of distinguishing the indis-

tinguishable and reconciling the irreconcilable " to avoid application of bad rules. What better than honesty? "It is better to make a

clean cut and to depart from prior precedent if we are satisfied that it is wrong." Secondly, such honesty avoids confusion in the law. In continuing to distinguish and reconcile cases " we have made confusion worse confounded."87 He used the same

Barrington v. Lee.88

This reasoning presents a strong challenge to the certainty argument, because judges can and do skilfully distinguish apparent

covering decisions, which, apart from cutting down further the already limited practical effect of rule 3, does tend to create a

measure of confusion. This cannot provide stability, consistency and predictability. If Court of Appeal judges do not think one of their

no one could ever know what the law was or where he stood." It does not follow

that because an argument can be used to undermine the whole practice of precedent within the judicial system, with possibly disastrous results, that it ought not therefore

to be used in the evaluation of a particular piece of practice within that system. What must be looked at is not the consequence of the argument's success in changing the whole system, but rather the consequence of the argument's success in

changing that particular piece of practice. It may, further, be impossible to achieve total justice all the time, but why cannot the pursuit of justice be made as practicable as possible?

83 This argument is used constantly by Lord Denning M.R. It is also an argument which would appeal to Professor Dworkin. See Taking Rights Seriously, Chap. 13,

and Appendix to the paperback impression (1978), at pp. 331-338; see note 1 on p. 331.

84[1978] 1 All E.R. 841 at p. 863.

85Ibid. at p. 877.

86Professor Dworkin clearly thinks that the law may require a rule to be ignored if it is not the right rule. This position is an integral part of his theory of law contained in Taking Rights Seriously.

87[196812 Q.B. 923 at p. 934.

88[19711 3 All E.R. 1231 at p. 1238.

previousdecisionsis correct,they ought to overruleit, ratherthan

will aid properand simple developmentof the law. Rule 3 hinders this.

B4. The argument that a power to depart from previous decisions will be used very rarely

Lord Denning M.R. has stated clearly that a departurefrom the constraintsof rule 3 will not resultin a race for widespreadchanges.

He stressed this in Gallie v. Lee,89 and in Davis v. Johnson he said: "On principle, it seems to me that, whilst this court should regard itself as normally bound by a previous decision of the court, never- theless it should be at liberty to depart from it if it is convinced that the previousdecisionwaswrong."90

There is no good reasonto doubtthe soundnessof these observa-

tions. Judgesof the Courtof Appeal are as committedto certainty and stability as are the Law Lords. Fears that abandoningrule 3 will provide the excuse for an excess of palm-treejustice in the Courtof Appeal, resultingin confusionand uncertainty,seem quite unfounded. "Like cases should be treated alike," says Lord

Denning, "but not alwaysat the expense of rightness."When one places a little trust in the judges of the Court of Appeal, the cer-

tainty and floodgatesargumentsfavouringrule 3 begin to appear less attractive.

Lord Salmon, in Davis v. Johnson,used the certaintyand flood- gates argument.He said: "There are now as many as 17 Lords Justicesin the Courtof Appeal, and I fear that if stare decisis dis- appearsfrom that Courtthere is a real risk that there might be a plethora of conflicting decisions which would create a state of irremediableconfusion and uncertaintyin the law."91The answer to this point links in with argumentB4. The solutionmay lie in constitutional changes within the Court of Appeal.92For example, a procedureof special reference could be used, wherebyif an every- day three-manCourt of Appeal is persuadedto depart from an existing covering decision of the Court, the case would be transferred for a hearing on special reserveddays to the full Court(of

89[1969] 2 Ch. 17 at p. 37.

90[19781 1 All E.R. 841 at p. 852 (emphasis supplied).

91[1978] 1 All E.R. 1132at p. 1153.

92Cf. more drastic changes advocated herein. Some might also wish to suggest

that the " leapfrogging " appeal process, direct from High Court to House of Lords, introduced by the Administration of Justice Act 1969, has weakened the arguments in favour of change in rule 3. The severe limitations on the use of the process initiate doubts about the force of the suggestion. See R. M. Jackson, The

Machinery of Justice in England (1972), p. 113. See also C. J. F. Kidd, op. cit. at note 60, for a discussion of the position of the New South Wales Court of Appeal,

which has long asserted a power to depart from its previous covering decisions (Bridges v. Bridges (1945) 45 S.R.(N.S.W.) 164). Kidd demonstrates that this has