All courts apply preexisting rules (statutes) formulated by legislative bodies, though the procedures vary greatly between common-law and civil-law countries. In applying these rules, however, courts must also interpret them, typically transforming the rules from generalities to specifics and sometimes filling gaps to cover situations never addressed by lawmakers when the legislation was first drafted. As courts decide disputes in individual cases, they create an important by-product beyond peaceful settlements—that is, they develop rules for deciding future cases. The judicial decisions embodying these interpretations then become controlling for future cases, sometimes to the extent that they virtually supplant the legislative enactments themselves. In common-law systems, such decisions are called precedents, and they are rules and policies with just as much authority as a law passed by a legislature. Thus, law is made not only by legislatures but also by the courts.

The common-law system of creating precedents is sometimes called stare decisis (literally, “to stand by decided matters”). Judges are generally expected to follow earlier decisions, not only to save themselves the effort of working out fresh solutions for the same problems each time they occur but also, and primarily, because the goal of the law is to render uniform and predictable justice. Fairness demands that if one individual is dealt with in a certain way today, then another individual engaging in substantially identical conduct under substantially identical conditions tomorrow or a month or year hence should be dealt with in the same way. Reduced to its essentials, precedent simply involves treating similar cases similarly. This system of stare decisis is sometimes referred to as “judge-made law,” as the law (the precedent) is created by the judge, not by a legislature.

In civil-law countries, all judicial decisions are, in theory, based upon legislative enactments, and the doctrine of judicial precedent does not apply. Judges merely “apply” the law created by the legislature. Practice, however, often departs from theory. Although the civil code adopted in these countries is quite comprehensive, attempting to cover nearly every aspect of human conduct and purporting to supply ready-made answers for all problems that can arise, many of the provisions are exceedingly vague (because they are abstract) and are sometimes almost meaningless until applied to concrete situations, when judicial interpretation gives them specific meaning. Furthermore, the legislative codes cannot anticipate all situations that may arise and come before the courts (e.g., the situation in which advances in medical technology enable doctors to keep a legally dead person alive). The gaps in legislation must be and are filled by judicial decisions, as a court is unlikely to refuse to decide a case merely on the grounds that it has not been told in advance the answers to the questions presented to it. Decisions dealing with circumstances unforeseen by the legal codes and giving specific meaning to vague legislative provisions are published in legal volumes in most civil-law countries and are frequently referred to by lawyers and relied upon by judges. They are not considered “binding” in the sense that judges are legally obliged to follow earlier decisions, but they are also not forgotten or disregarded. In actual practice, they have almost as much influence as statutory interpretations in countries that formally adhere to the doctrine of stare decisis.

Judicial lawmaking is more pervasive and more frankly acknowledged in common-law countries than in civil-law ones. In addition to rendering decisions that authoritatively interpret statutes, the courts of common-law countries have created a vast body of law without any statutory foundation whatever. Whenever judges are confronted with a dispute for which there is no clear statutory answer—and this occurs with considerable regularity—they must render decisions in accordance with their own conceptions of justice. Later judges follow these rulings, deciding similar cases in the same manner but distinguishing earlier cases when dissimilar factors are discovered in the cases before them. The later cases also become precedents to be followed in still later cases presenting substantially similar patterns of fact (thus, several precedents may be relevant to a particular case, though they may conflict with each other). The total accumulation of all these judicial decisions is what constitutes “the common law”—the consequence of judges’ deciding cases and setting forth their reasons. In common-law countries, legislation is accordingly more limited in scope than it is in civil-law countries. It does not purport to provide for all possibilities, because large areas of conduct are governed solely by judge-made law.

To speak of precedent as “binding” even in common-law systems is somewhat misleading. As already noted, earlier decisions can be and are distinguished when judges conclude that they are based upon situations differing from those before the court in later cases. Even more significant, earlier decisions can be overruled by the courts that rendered them (though not by courts lower in the judicial hierarchy) when the judges conclude that the decisions have proved to be so erroneous or unwise as to be unsuited for current or future application. The Supreme Court of the United States, for example, has overruled many of its own earlier decisions, much to the consternation of those who are unable to accept the inevitability of judicial lawmaking. Many of these reversals have been in the field of constitutional law, in which simple legislative correction of an erroneous judicial interpretation of the Constitution is impossible and in which the only alternative is the exceedingly slow, cumbersome, costly, and difficult process of constitutional amendment. Nevertheless, the power to overrule decisions is not restricted to constitutional interpretations; it also extends to areas of purely statutory and purely judge-made law as well, areas in which legislative action would be equally capable of accomplishing needed changes.

The desirability of judicial lawmaking has long been the subject of lively debate in both civil- and common-law countries. It is universally accepted that courts in democracies should not arrogate to themselves unrestricted legislative power, because the judiciary is rarely subject to the same democratic accountability as legislatures. But when existing statutes and precedents are outmoded or manifestly unfair as applied to specific cases before the courts, should not judges be able to change the law in order to achieve what they conceive to be just results or to avoid what they consider unjust results? Few observers—especially among judges—believe that rigid adherence to the letter of the law is more important than achieving fair and just resolutions of disputes.

The extent to which the judges should be bound by statutes and case precedents as against their own ethical ideas and concepts of social, political, and economic policy is an important question, as is the matter of which should prevail when justice and law appear to judges to conflict with each other. These are questions upon which reasonable persons disagree vigorously, even when they are in basic agreement on the proposition that some degree of judicial lawmaking is inevitable. The proper tempo and scope of judicial change are what is mainly at issue. How quickly should judges act to remedy injustice, and when should they consider an existing rule to be so established that its alteration calls for constitutional amendment or legislative enactment rather than judicial decision? As many dissenting opinions attest, judges themselves disagree on the answers to these questions, even when they are sitting on the same bench hearing the same case.

Nor should it be assumed that so-called “literal” or “strict” interpretation of documents such as constitutions precludes judicial policy making. The inherent ambiguity of constitutional interpretation can be seen clearly by considering the First Amendment to the Constitution of the United States, which states that “Congress shall make no law…abridging the freedom of speech.” This prescription, upon first glance, seems entirely clear. Nevertheless, few people—not least the framers of the Constitution—have interpreted it as meaning that Congress cannot pass any law that abridges any form of speech. Nearly everyone accepts that treasonous or seditious speech, for example, can be proscribed. Most would also accept at least some legal restrictions on libelous speech, and many would accept restrictions on so-called hate speech. Indeed, once one begins to consider the wide variety of actions that might qualify as speech (including “nonverbal,” or symbolic, speech), it is easy to conclude that the U.S. Constitution itself has little literal meaning beyond what is given to it by the interpretations of judges.