First Principles of Business Law

3. Cases that are potentially relevant as precedents

3.1. The importance of 'similarity' 

When you search for previously decided cases that may be precedents for a new case, you will need to find the most relevant ones. But why are some cases more 'relevant' than others? What factors determine relevance?

One factor in determining relevance is the extent to which the facts of a previous case are similar to the facts of the new case.  This is because the law is concerned to deliver outcomes that are seen as fair or just. One aspect of justice requires treating everybody in the same way unless there are important differences in their circumstances. It follows that the rules of law applied in a previously decided case should also be applied to a new case if the facts of both cases are sufficiently similar.

To what extent must the facts of two cases be the same for the earlier case to be treated as a precedent for the later one? Choose the best answer from those below.

(a) The facts of the earlier case must match the facts of the later case, not in exact detail, but in all relevant and material respects. Cases that are broadly similar on their material facts should be followed despite any differences of detail.

(b) The facts of the earlier case must exactly match the facts of the later case: otherwise the two cases can be distinguished and a court will not be compelled to follow the earlier decision. When there are many differences of detail between the two cases the court should not treat the earlier case as a precedent.