What is common law and how is it different from statute?

Statute is law made by Parliament. Common law is law developed by judges through decided cases. Both are binding law in England and Wales, and the system runs on both simultaneously.

How common law works. When a court decides a case, the legal reasoning essential to that decision — the ratio decidendi — becomes a precedent binding on lower courts facing similar facts. Over centuries this accumulates into a body of law covering areas Parliament has never legislated on.

Much of contract law, the law of negligence, and many property principles are common law rather than statutory. The modern law of negligence largely stems from a single 1932 case, Donoghue v Stevenson, concerning a snail in a bottle of ginger beer.

The doctrine of precedent (stare decisis) makes the system work: lower courts must follow higher courts. The Supreme Court can depart from its own previous decisions but does so rarely.

Remarks not essential to the decision — obiter dicta — are persuasive but not binding.

The relationship between the two:

Statute prevails. Where an Act conflicts with common law, the Act wins, and Parliament can abolish or modify any common law rule. This follows from parliamentary sovereignty.

Judges interpret statute, and that interpretation itself becomes precedent. So statute and common law are interwoven rather than separate.

Common law fills gaps where Parliament has not legislated.

Why the system has this shape. Common law can respond incrementally to circumstances Parliament did not anticipate, and it develops through concrete disputes rather than abstract drafting. Its weaknesses are that it develops unpredictably, only when someone litigates, and retrospectively — the parties discover the rule after acting.

Equity is a third strand, developed to mitigate common law rigidity, giving rise to trusts and remedies such as injunctions.

Civil law jurisdictions — most of Europe — rely primarily on comprehensive codes instead.