Common Law vs. Civil Law: How Laws Are Made in the Courts

common law vs civil law

Your lawsuit might depend on similar cases that came before. Here’s why...

Some laws are made by the legislature, but others are made in the courtroom. “Common law” is when a decision in a case sets the precedent for similar cases that follow. Here’s the difference between common law and civil law, and why it matters.

If you’re filing a lawsuit, your lawyer might throw around words that are unfamiliar — and you might feel awkward asking a lot of questions.

We get it.

In this article, we’ll help break down one legal concept that’s important to understand for someone pursuing legal action.

You might already know the difference between criminal law and civil law. A criminal case arises when someone is arrested for committing a crime. There are all types of crimes: white collar (financial or business-related), violence against people, damage to property, traffic-related, and more. Criminal offenses range from misdemeanors (less serious crimes) to felonies and capital felonies (most serious). When someone is convicted in criminal court, the penalty could be a fine, community service, probation, or jail time. There’s no “plaintiff” in a criminal case; the person who was arrested is the defendant and the opposing side is the government (local, state, or federal) as the prosecutor.

Any court action that doesn’t involve an arrest or crime is a civil action. When one person or entity sues another, it’s a civil case and the only remedy is for the plaintiff to recover damages in the form of money. These cases involve a plaintiff (the person or company suing) and defendant (the person or company being sued — and there are often multiple defendants in a single case).

Enjuris tip: Pharmaceutical liability cases are a perfect example of cases that often have multiple defendants. In a pharmaceutical liability case, defendants could include the drug manufacturer, prescribing physician, the hospital or clinic where you were given the drug, the pharmacy, and anyone else in the chain of custody of the medication from manufacturer to patient.

Common law vs. statutory law

If you’ve filed a civil lawsuit — whether a car accident, medical malpractice, toxic tort, or something else — the first thing your lawyer might do is look at common law, also known as case law.

Each state and federal government has its own set of laws and regulations, which are statutory or regulatory laws. Those laws are set by the government’s legislative branch (state legislatures or the US Congress). The courts (judicial branch) are required to follow these laws, but they don’t create them.

The courts do create laws based on how they rule on particular cases, and those become common law. When a court issues a decision, the basis of the decision — the why — establishes a precedent for future cases with similar facts.

In other words, that case becomes law for cases that follow.

Statutory law Common law
Legislative branch Judicial branch
Set by state legislature or US Congress Established by courts based on decisions in specific cases
Becomes law or regulations that everyone is expected to follow Becomes law that is used by the courts to make judgments on similar cases in the future
Laws are codified (written) into statutes or regulations Laws are unwritten, except within judicial decisions

Can a judge make new law because they don’t like the ones from previous cases?

Once precedent is established, it’s not that easy for it to be overturned. In general, when there’s a previous decision with similar facts, the court is bound to follow that reasoning and deliver the same verdict as the previous court. This principle is called stare decisis (in Latin, “decided”).

However, the court might determine that the facts of the current case are sufficiently different from any other case that has come before it, which allows the court to reverse a decision or make a decision based on a different theory of law. In that situation, it’s called a matter of first impression.

When that happens, the judge’s decision must set forth how this case is different and then it would become precedent for future cases. Usually, if a court attempts to set precedent, the case will continue through the appeals process, which means it will be retried in a higher court to determine if the decision should stick or be overturned.

Enjuris tip:“Precedent” usually only controls cases in the same court system. So, if precedent is set in a New York court, it would not apply in Montana. It might be considered “persuasive authority,” which can influence the Montana court to follow the decision, but it wouldn’t be binding.

Common law examples

Palsgraf v. Long Island RR Co., New York, 1928: Even though this is a case from 1928, it set a precedent that still holds today and establishes a rule of law that’s important for many personal injury cases. The Palsgraf case answers the question of liability to an unforeseen plaintiff.

  • Facts: Helen Palsgraf, the plaintiff, was waiting on the platform for a Long Island Rail Road train. Another passenger was boarding the train just ahead of her with the assistance of a railroad employee, when the passenger dropped a package that exploded. The impact of the explosion caused a coin-operated scale on the platform to fall and hit her, and she suffered injury as a result.
  • Result: The court ruled that the railroad wasn’t negligent. It had no duty of care to Ms. Palsgraf because it couldn’t have foreseen her injury. In other words, the railroad couldn’t know that if its employees helped the other passenger, he would drop the package, it would explode, and it would set off a chain reaction that would result in her injury. This case set the standard for foreseeability in the law. In tort law, injury is foreseeable if it could reasonably be predicted by an average person in that circumstance.

Lerbakken v. Sieloff and Associates, P.A., US Court of Appeals, Eighth Circuit, 2018: This recent case changes how financial advisers handle retirement assets in a divorce.

  • Facts: Brian Lerbakken, the plaintiff, was awarded half of his ex-wife’s 401(k) and all of her individual retirement account in the couple’s divorce settlement. However, when he later filed for Chapter 7 bankruptcy, he declared the retirement funds were exempt and couldn’t be reached by creditors. In general, there are statutory bankruptcy protections for 401(k) and IRA accounts.
  • Result: The court ruled that the retirement funds weren’t exempt from Lerbakken’s bankruptcy. The court reasoned that once a retirement account is separated from its original owner (inherited), it’s no longer considered a retirement fund and is therefore available to creditors in a bankruptcy.

Common law application in your lawsuit

When you consult with an attorney, they’ll likely research case law to see if there’s a previous similar case where precedent might apply. They’ll gather all the facts of your situation and carefully study case law to see if there are similar cases because those will help the attorney advise of your chances of winning your lawsuit.

Beyond that, precedent provides your lawyer with arguments in your favor. They’ll look to cases with facts similar to yours and use the court’s decision to make your case. That’s one of many reasons why you should consider hiring a qualified, experienced lawyer.

Find an attorney who’s knowledgeable and comfortable with the area of law specific to your case. If you’ve used a divorce lawyer, that person might not be the right fit for your personal injury case. It’s important to know what to look for as you hire your lawyer for any legal action. Litigation can be costly and time-consuming. You might think you have a great case, but understanding the elements of your lawsuit will help you (and your lawyer) know if it’s worth your time and money.

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