As per the doctrine of Precedent a.ka. stare decisis the previous decision of the court or of superior court is binding and the law pronounced by it can not be unsettled. This was and this is the English Law of Precedent. However it creates a problem. The Privy Council is the Supreme Court of England and there is no Court higher to it. Therefore if a decision say delivered about hundred years back is found to be out of context it remains binding and can not be unsettled. To rectify this problem, in the year 1966 the Privy Council changed its practice by announcing the following Practice Statement to the House:

‘Before judgments are delivered today, I wish to make the following statement on behalf of myself and the Lords of Appeal in Ordinary:
“Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.
“Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
“In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.
“This announcement is not intended to affect the use of precedent elsewhere than in this House.”‘

–Statement made by LORD CHANCELLOR (LORD GARDINER) on 26 July1966.

(For the record the Privy Council has now been substituted by Supreme Court of England by Constitutional Reforms Act of 2005)

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