Towards a Sophisticated Theory of Precedent? Prospective and Retrospective Overruling in the Czech Legal System
© Springer International Publishing Switzerland 2015Eva SteinerComparing the Prospective Effect of Judicial Rulings Across JurisdictionsIus Comparatum – Global Studies in Comparative Law310.1007/978-3-319-16175-4_6
6. Towards a Sophisticated Theory of Precedent? Prospective and Retrospective Overruling in the Czech Legal System
Charles University Law School, Namesti Curieovych 7, CZ 116 40 Prague, Czech Republic
The Czech legal system is the example of the country in transition from the communist authoritarian system of the 1980s into a new democracy. The issue of precedent (or case law) is a good example of this. In discussing the role of case law, the era of the 1990s was full of debates about the actual importance of judge-made law in a newly emerging legal system. Many lawyers in the 1990s or early 2000s rejected any value which precedents might have in a civil law system. In contrast, the second decade of the twenty-first century is facing a completely different scenario. Now one can hardly find a Czech scholar who would continue to claim that case law has no law making function and no force. Instead, new problems emerged, including temporal application of new precedents. With the beginning of the second decade of the twenty-first century the issue of prospective effects of precedents started to be analyzed. First, this debate took place in judicial decisions, then legal doctrine followed. The case law and legal scholarship try to outline several basic models of temporal effects of case law. The actual model depends on the area of law and parties involved.
The problem of prospective overruling has become an issue at the end of the first decade of this century. The contrast between the situation of the 1990s and early 2000s is nicely visible if we compare two editions of the only Czech book dealing in detail with the problem of precedent and case law. Its first edition published in 2006 has not discussed the issue of prospective overruling, just briefly mentioned it. Instead, the most important idea of the book was to persuade its readers that case law matters, precedents shall be published, they shall be taken seriously and should be used before courts. Likewise, judges shall not ignore it (see Kühn et al. 2006).
Within mere 7 years, the situation has changed dramatically. In the second decade of this century, you can hardly find a Czech scholar who would continue to claim that case law has no law making function and no force whatsoever. Instead, new problems emerged, including temporal application of new precedents. That is why the second edition of the book published in 2013 includes the entire chapter on prospective overruling (Kühn 2013). As nicely put by Michal Bobek, this issue belongs to the “second generation” of the problems relating to precedent in the Czech Republic:
Within [those seven years between publication of the first and second editions] the entire understanding of case law has undergone major transformation in the Czech legal system. Perhaps no major textbook on jurisprudence today continues to claim that case law has no lawmaking potential. However, while jurisprudence is slowly moving towards recognition of case law, legal practice has made a considerable move. Recently, legal practice has become to deal with the problems which we can call problems of the “second generation” relating to the rise of case law. The question today is not whether case law is binding and where we can find it. The questions of the second generation are more complex: when is it possible to overrule case law or deviate from it? By whom? What about temporal application of overruling? (Bobek and Kühn 2013, at 19)
In the subsequent text I will first explain how and why this fast transformation in the Czech legal system happened. Then I will discuss various options of temporal effects of the case law. I will outline the basic models through which the legal system can deal with this issue. In the third section I will analyze the practice of general courts and the Constitutional Court. Finally, I deal with the case law of the Supreme Administrative Court, which provides possibly the most complex mechanism to deal with temporal effects of overruling in the Czech legal system.
The Birth of the Czech Conception of Precedent
Until the end of the 1990s overruling in the Czech legal system was usually invisible. It happened sometimes through sudden action of the high court, often through gradual modification of previous case law. The key problem of the 1990s was the predictability of case law and the fact that legal scholarship and many judges maintained that case law was not binding and that is why it did not matter.
The lack of any debate about temporal effects of overruling can be explained by multiple reasons. First, the mainstream opinion of postcommunist legal scholarship rejected the very notion that case law is also part of the law in a broader sense. If it were non-law, no one would need to discuss its temporal effects (Kühn 2011, 207 ff.). In addition, what mattered was the absence of any institutionalized overruling of the high court precedents.
The situation in the Czech legal culture in the 1990s was a direct continuation of a formalist model of legal reasoning, typical of the late Communist era. Its specific judicial ideology can be well described – in the words of a prominent contemporary Hungarian legal philosopher – as “the degeneration of legal positivism” (Varga 1995, 83) or “a dull rule-positivism” (Varga 1995, 142). Under the common perception, the work of a judge was thought of as primarily mechanical. It might be said that the quality of judicial and legal reasoning was poor (in general see Kühn 2011).
The typical post-Communist conception of judicial independence in the 1990s included the proposition that judges must decide only according to ‘the [statutory] law’, which, however, effectively meant that in hard cases – and even in some easy cases – where a simple logical syllogism could not be applied, they might decide in the way they see fit.1 Judges guided by the ideology of textualism were not obliged to give consideration to precedents, legal writings, the intention of the legislature, the rationally reconstructed purpose of the law, all of which constitute something which was not ‘law’ in the ideology of bound judicial decision-making and textual positivism. They had to adhere only to the letter of the law; where the letter of the law did not offer any easy solution, pure arbitrariness and unpredictability could enter the scene.
Even those judges who understood the value of persuasive sources of law did not usually acknowledge openly in their opinions that they make use of such sources. Yet, the problem relating to this reticence lied not only in the aesthetics of judicial opinions. The very fact that these persuasive authorities were not openly cited caused many other judges to think that persuasive authorities were without any merits. In a simplified intellectual world of post-Communist limited law, everything was either binding (therefore, legally relevant) or non-binding (and, therefore, legally irrelevant). Twenty or ten years ago it was not uncommon to find a judge who during trial rejected even any reference to precedent or legal science because she is not ‘bound by them’ and, therefore, they are without any importance for her reasoning, which remains independent of anything but the letter of the law.2 Even though it was not admitted by those espousing the concept of limited law, this sort of judicial independence resulted in the antithesis of judges being ‘bound’ by law, as the law’s inability to unequivocally determine for them a clearly obvious outcome results in them not being bound by anything at all.
Renewed discussion on the role of precedent appeared in Central Europe shortly after the fall of the Communist regimes. With the emergence of judicial review and the overall rise of the judiciary, the old clichés concerning the role of precedent in the legal system started to be questioned all over post-Communist Europe. Even today one might still plausibly claim that the issue of precedent is neglected in Central Europe. Law students for the most part do not study them; they are not used to working with them. Therefore, the existing education method is statutory rule-oriented, and many students have not encountered a single judicial decision throughout their entire program of university study. Though recently the emphasis on precedents in legal education is improving, they are approached in a peculiarly scholastic way – their headnotes are viewed as further material for students to memorize.
The most important reason for the fall of the old (post-Communist) conception of weightless precedent is, in my opinion, twofold. First, in the course of the first decade of this century all Czech high courts (Constitutional Court, Supreme Court, Supreme Administrative Court) launched on-line publication of their case law. Thus everyone has got the access to thousands of decisions.3 Second, the law on courts and judges was amended in 20004 and grand chambers of the Supreme Court were created. Those grand chambers, one sitting for civil law issues, one for criminal law, are the only judicial body empowered to overrule previous precedents of the Supreme Court. It is prohibited for a small panel composed of three judges which decides cases routinely to deviate from its earlier legal opinion. Instead it is obliged to send the issue to its respective grand chamber. Grand chambers have been made part of the Supreme Administrative Court from its very beginning in 2003.5 To put it simply, any overruling today can take place only through a special body within the high court – grand chambers at the Supreme Court and the Supreme Administrative Court, or decision made en banc at the Constitutional Court. This strengthened the force of precedent and its weight in legal reasoning.
Last but not least the duty of both high courts to send the issue to the grand chamber has been sanctioned by the Constitutional Court’s case law. According to the Constitutional Court, if the high court deviates from its previous case law without the approval of its grand chamber the party’s fundamental right to a lawful judge is violated. This violation provides the Constitutional Court a very convenient avenue to quash the decision of the high court without addressing the substance of the dispute at stake.6 Not surprisingly, within the first decade of the existence of grand chambers the issue prospective overruling emerged.
Now the consensus in Czech legal scholarship seems to be that case law really means, at least to some extent, also law making. The legal rule is not the text of the law but its meaning as interpreted by courts. The text of the law is the carrier of the rule, whose meaning must be interpreted and often developed by courts. Viewed by those bound by the law the rule is what has been interpreted by law courts from the text of the law. However, judicial law making is not identical to legislative law-making. Judges still struggle to find law, not to make it,7 even though law making from the objective point of view is unavoidable (see Kühn 2002). A good example is the new interpretation of statute of limitation of defamation claims, as I shall discuss below. While the previous rule, as interpreted by the Supreme Court case law, gave the right to sue defamation claims without any statutory limitation, the Supreme Court grand chamber provided a contrary reading that those claims are subject to strict limit of 3 years.8
The Constitutional Court repeatedly emphasized that “judikatura” (term comparable to French jurisprudence, case law) is law in its substantive meaning. That is why courts have the duty to alter case law in a principled way, without hindering legitimate expectation of those at stake.9 In its discourse with the ordinary courts in the 1990s, the Czech Constitutional Court fashioned a new conception of precedent for the ordinary judiciary.10
On the one hand, the Constitutional Court emphasized that a judge is not bound by the case law of the Supreme Court and is entitled to deviate there from she finds good and legitimate reason to do so. Replying to the arguments of an ordinary judge that the decision is correct because the ordinary judge is bound by case law, the Czech Constitutional Court emphasized that the ordinary court must assess the validity of the established case law by taking into account societal and legal development.11
On the other hand, the Constitutional Court proclaimed in the late 1990s that ordinary court judgments are arbitrary and, therefore, unconstitutional, to the extent that the judge decides contrary to the ‘established’ case law of the Supreme Court unless she rationally explains why she disregarded the applicable jurisprudence.12 The effects of the decision are far reaching. A precedent, although not binding, has a force of its own, and lower courts must give strong arguments for declining to follow it. The ‘discursive’ authority of precedent – as outlined by the Czech Constitutional Court – means that it is the duty of all judges to consider higher court precedents, and not just a matter of random judicial choice. At the top of the system, both supreme courts and the Constitutional Court are bound by their own precedent and must follow it unless en banc proceedings establish a new precedent.
In 2012, the legislature affirmed the conception of precedent envisaged by the Constitutional Court’s case law. The Civil Code enacted in 201213 provides as one of its basic principles that everyone who seeks legal protection can expect that his case would be decided in the same way as another case decided by law courts which is similar in essential features; if her case is decided in a different way the party who seeks legal protection is entitled to persuasive explanation of reasons relating to this deviation (Section 13 of the Civil Code).
The conception of precedent in the Czech Republic is thereby discursive, not formally binding. We should not be surprised that Czech legal scholarship adamantly denies that judicial precedents have formally binding force. In most cases, lawyers avoid using the very word “precedent”. Instead, as I have already mentioned above, the term “judikatura” (case law) is used. Putting aside other reasons, this is due to the fact that the Czech together with other Continental lawyers understand the term ‘precedent’ to mean something different and much more rigid than do their Common Law counterparts. The English doctrine that precedent cannot be overruled even by the highest court itself – although repudiated even in Britain in 1966 – still has a huge impact on Continental legal thinking which identifies the concept of precedent basically with this English notion. As Dawson put it:
The hostility still shown in France toward the whole conception of judicial precedent may be due in part to dismay inspired by the English example. […] The extreme to which the English doctrine of precedent has been carried during the last seventy years [1898–1966] has helped, I believe, to perpetuate in Europe a basic misunderstanding, by obscuring a primary purpose of a system of precedent. That purpose is to restrict, not to enlarge, the powers of judges. (Dawson 1968, 413–414)
Moreover, Continental judges, including post-Communist ones, operate within a judicial culture which approaches the hierarchical ideal of state authority, based on a strictly hierarchical ordering, specialization and a logically legalistic attitude, which stands in clear contrast to the less hierarchical, more pragmatic and more substance and problem-oriented common law judges (Damaška 1986, 18 ff.). Thus, it is very likely that establishing a rule of precedent in Continental systems – and above all in post-Communist systems – would entail the extension of mechanical textual positivism to the sphere of case law. These formalist and mechanical Continental predispositions are plainly seen in the growing number of complaints in the Czech Republic about the phenomenon of “case positivism”, that is a too rigid observance of the judge-made rules as formulated in the earliest reported decisions while disregarding the entirely divergent facts of later cases (cf. e.g. David 2008 or Bobek and Kühn 2013, 175 ff.). When common lawyers praise the virtues of their system of precedents, they have in mind the flexibility of law; when their East European counterparts think about the same problem, they are always afraid of the law’s rigidity. In the words of Damaška, if precedent were recognized as legally binding in Continental Europe:
decisional standards would in time become intolerably rigid, each new decision a drop in the formation of an ever longer stalactite of norms. In short, while a judicial organization composed of loosely hierarchical judges may require a doctrine of binding precedent as an internal ideological stabilizer, a hierarchical career judiciary may well be better off without it. (Damaška 1986, 37)
Discursive vertical force of precedent combined with its binding nature at the high court (horizontal) level is a sort of response to this problem. Lower courts are supposed to follow precedents, at the same time they might provoke overruling by bringing new arguments and trying to persuade higher courts to change their legal opinions.
Retrospective and Prospective Overruling Generally14
It is the principle in all civil law countries as well as in common law systems15 to apply a new judge-made law rule to all cases before the courts. It does not matter whether or not those cases had been brought to courts before the high court made a new precedent. It does not matter when the action which would be the reason for the lawsuit took place. It does not matter whether a new precedent is a completely new interpretation of the law or whether it is the result of overruling previous case law. I call this situation incidental retrospectivity. A new legal opinion is applied retrospectively. Older cases which had meanwhile been finally decided cannot be reopened only because of subsequent decisions which overruled earlier precedents.16 Adjective “incidental” implies that retrospective effects are to some extent accidental, i.e. the case had not been finished before the new opinion was made.
Both civil and common law is based on the premise that courts do not make law but just try to find the law in its sources, such as statutory law, customs, legal principles etc. (declaratory theory). In this view, overruling of an earlier precedent is just the correction of the previous mistake in interpretation of law. The nature of judicial law making rests in finding the correct meaning of the law, no matter how fictitious this might be in reality. As nicely summarized by Lord Reid in his fierce defense of retrospective application of a new judge-made law rule: “We cannot say that the law was one thing yesterday but is to be something different tomorrow. If we decide that [the existing rule] is wrong we must decide that it always has been wrong, and that would mean that in many completed transactions owners have received too little compensation. But that often happens when an existing decision is reversed.”17 A Czech judge would agree entirely with this assertion.
That is why it is not possible to apply the older (erroneous) legal opinions on older legal relations which had taken place before a new legal opinion was made by the competent judicial body, in the Czech Republic a grand chamber. The fiction of Czech law is that although case law finally determines the meaning of law it is never an autonomous and original source of law. It never functions on its own. It always functions linked to another source of law, it interprets it, albeit the link is often very distant and almost invisible. It is true that this understanding is often fictitious. This fiction, however, stands as a foundational legitimizing narrative of Czech as well as Continental judiciary. That is why I do call the application of a new judge-made law rule “retrospectivity” rather than “retroactivity”.
Only modern law in a formal sense (statutes as carriers of legal rules) is connected with the prohibition of retroactivity with all its consequences.18 The development of law and its making in a formal sense is discontinuous, the beginning and end of its existence (validity) is fixed, its application is determined by complex temporal rules.
On the other hand, law in a broader, substantive sense cannot be reconciled with the ban on retroactivity. Law in a substantive meaning is a plethora of popular practices (commercial customs, but also those statutory rules which effectively delegate rule-making on some addressees who further define what is in some place and some time “usual” according the code, what is “without unnecessary delay” etc.), administrative practice (law making through decisions of administrative authorities in individual cases), last but not least case law. The development of this kind of law is continuous, gradual. For instance, the precise moment when the customary rule has been modified is hard to determine. If the case law is modified in a different way than through a formal decision of a grand chamber, it can be very complicated to say since when a previous precedent has been finally overruled. Such a change, if made by series of judgments gradually undermining previous opinion, is not linked to the exact date since when it becomes applicable. Rather, it is part of continuum within which it is more or less likely that a new rule would be applied.19