At the end of this module, you will be able to:
- distinguish between ratio decidendi and obiter dicta.
- apply well-established rules to identify the ratio decidendi in a decision.
This module is intended as a useful exercise in revision. If you are certain that you understand how to discover the ratio in an opinion, you should skim lightly over this material.
What is the ratio decidendi?
As you probably recall from your studies, the term ratio decidendi is a Latin phrase which means the "the reason for deciding". What exactly does this mean? In simple terms, a ratio is a ruling on a point of law. However, exactly what point of law has been decided depends on the facts of the case.
The importance of material facts
As Goodhart A L (18911978) pointed out long ago in the 1930s, the ratio is in pratical terms inseparable from the material facts. Goodhart observed that it "is by his choice of material facts that the judge creates law". By this Goodhart meant that the court's decision as to which facts are material or non-material is highly subjective, yet it is this inital decision which determines a higher or lower level of generality for the ratio. Goodhart's reformulation of the concept of the ratio was the subject of heated debate, particularly in the 1950s.
Compare Goodhart's concept of the ratio with Lord Halsbury's statement that:
"Every judgement must be read applicable to the particular facts proved, since the generality of the expressions which may be found there are not intended to be the expositions of the whole law but govern and are qualified by the particular facts of the case in which such expressions are to be found." Lord Halsbury (1901)
What, if any, is the difference between Goodhart's material facts and Halsbury's particular facts?
What are obiter dicta?
Obiter dicta is a Latin phrase meaning "things said by the way". Obita dicta are not binding (unlike the ratio), but they may be regarded as persuasive in a future decision. The weight given to dicta usually depends on the seniority of the court and the eminence of the judge in question.
Obiter dicta are judicial opinions on points of law which are not directly relevant to the case in question. They are made when a judge chooses to give some indication of how he or she would decide a case similar, but not identical, to case under consideration. These statements are often meant to clarify the legal principle which the judge proposes to apply in his or her judgement. For this reason, obiter dicta often take the form of analogies, illustrations, points of contrast or conclusions based on hypothetical situations.
Obiter dicta in one case might be adopted as ratio decidendi in subsequent cases. This occurs when a situation regarded as hypothetical by one judge arises in a subsequent case.
Distinguishing between ratio and obita is not always simple. When questioned regarding the difference between ratio and obiter, Lord Asquith once remarked that: "The rule is quite simple: If you agree with the other bloke you say it is part of the ratio; if you don't you say it is obiter dictum, with the implication that he is a congenial idiot". Although intended humorously, this remark has a good measure of truth.
Ratio decidendi and obiter dicta
How well do you recall the concept of the ratio decidendi from your undergraduate studies? Take a moment to read through the following statements:
- A ratio decidendi is not an abstract principle, to be applied in a deductive fashion to a later case. Instead the ratio is a ruling on a point of law in relation to a specific case.
- Only the ratio binds an inferior court. Cases themselves do not bind.
- If the court is not required to make a ruling on a point of law, its decision will not give rise to a ratio.
- There is no requirement for each judgement to contain a single ratio and no more. Multiple rationes are quite normal.
- Not every statement of law contained in a decision is necessarily ratio or obiter. A judge may refer to a principle only to express his or her disagreement or for the sake of completeness. For a statement of law to be ratio or obiter, the judge must express his or her explicit agreement with the principle.
These are not mere niceties of legal doctrine. Bearing these points in mind will help you when you come to identifying the ratio in a judgement.
Finding the ratio decidendi
Identifying the ratio in a judgement is frequently difficult. Judges are under no obligation to label the different parts of their judgement as ratio or obiter. In most cases, you need to read the entire judgement to determine the ratio.
Some of the reasons for this include:
- length of judgements. Many judgements are extremely lengthy and are written in dense, legal language. The ratio may not be expressed in a single sentence or even a single passage.
- the lack of an explicit ratio. The extreme example of this is the judgement in Raffles v Wichelhaus  2 H&C 906. This famously consisted of a single sentence: "There must be judgement for the defendants".
- the existence of multiple lines of argument. Some arguments will be ratio, others will be obiter and others might be neither.
- uncertainty regarding which facts were material to the judgement. Judges sometimes fail to indicate which facts are significant and which are not, making it difficult to determine the appropriate level of generality at which a ratio should be stated.
In some instances, a case will establish a legal principle which is refined over time, being broadened or narrowed as the result of successive judgements.
Why does finding the ratio have to be so hard?
At the Tenth Commonwealth Law Conference, Bennin F A suggested that it would be better if judges were more explicit regarding the legal rules which they set down in their decisions. The answer given by Kirby J on this occasion was that judges would be reluctant to do so as "the discursive nature of their judgments is the historic basis of the development of the common law". Bennion has argued that "there seems no reason why a judgement could not contain both a brief 'legislative' passage and an accompanying discursive explanation".
What difficulties, if any, can you see with this suggestion?
Ratio in appellate decisions
The problems associated with identifying the ratio in the case decided by an individual judge are multiplied in the case of appellate decisions. Most applelate courts sit with a an uneven number of judges. To discover the ratio of an appellate decision, you need to determine the ratio in the case of each individual judgement. The rule is that only the rationes contained in the majority judgements need to be considered. If a majority of judges agree on the same reasoning, you have identified a single ratio. Otherwise, there might be multiple rationes, or even none.
Cases without a ratio
In a some cases, there may be no majority support for any particular ratio. In such instances, subsequent courts tend to assume that all that is binding is the judgement itself. This means that subsequent cases will be decided on the basis of the decision only when the material facts are almost identical. This is not a purely theoretical possibility. In Paykel v Commissioner of Taxation (1994) 49 FCR 41, Heerey J applied the judgement of the majority in Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492, despite the lack of a discernable ratio in the former decision.
Finding the ratio
There are a number of rules of thumb that you can use to determine the ratio decidendi. These include:
- distinguish the facts which the court regarded as material from those which appeared unimportant.
- discover the precedents applied. These will provide an indication of the court's approach.
- in deciding the ratio, restrict your analysis to the opinions of the majority judges.
- read subsequent decisions to find how the decision has been interpreted. The ratio that becomes recognised as a rule of law may not be the ratio that apparent in the original judgement.
The last point is one that is sometimes overlooked. In many instances, the ratio in an individual judgement is less important than the legal principle for which a line of cases can be cited as authority.
When reading a judgement, consider it at several level. Apart from reading the decision for what it actually says, read it also in terms of its subsequent reception. Assess the arguments of the judges and the advocates in the context both of the case and the future development of the law. If you are building an argument on the basis of a particular case, it is often dangerous to look at the case in isolation.
In finding the ratio, it is often useful to consider the way in which judgements are written. Although there is no standard model, they often follow a broad pattern. In most cases, the judgement is divided into three sections:
- the facts agreed or proven
- the range of applicable legal principles
- the application of the appropriate principle to the facts.
There are a number of formal tests that have been devised to assist in discovering the ratio. Two of the best known were developed by United States jurists: these are Goodhart's Test and Wambaugh's Test.
Goodhart proposed these rules for finding the ratio decidendi:
- The principle of a case is not found in the reasons given in the opinion.
- The principle is not found in the rule of law set forth in the opinion.
- The principle is not necessarily found by a consideration of all the ascertainable facts of the case, and the judge's decision.
- The principle of the case is found by taking account (a) of the facts treated by the judge as material, and (b) his decision as based on them.
- In finding the principle it is also necessary to establish what facts were held to be immaterial by the judge, for the principle may depend as much on exclusion as it does on inclusion.
Goodhart's Test has gained considerable popularity. However, as stated above, it is not without its critics.
Eugene Wambaugh (18561940) developed an older, but still useful, test. Warmbough's Test first appeared in a book published in the United Sates in 1894. Like Goodhart's Test, Wambaugh's rules focus on the question of what facts are material and which are not. Wambaugh begins with the observations that
- no matter how accurate a legal proposition may be it does not necessarily form part of the ratio decidendi.
- the proposition is not governed by all the facts, but by the material facts.
Wambaugh recommends that you take the following steps if you think you have identified a potential ratio in a judgement:
- frame the legal principle that you have identified from a judgement.
- invert a word or phrase which reverses the meaning of the principle.
- ask yourself, if the court had the inverse principle in mind when reaching its decision, would it have reached the same conclusion?
- if the answer to this question is yes, then your original proposition cannot be the ratio.
Note that Wambaugh's Test works only with cases with a single ratio.
This module dealt with the following:
- distinguishing between ratio decidendi and obiter dicta.
- applying well-established rules to identify the ratio decidendi in a decision.