ICAEW BL · Chapter 1
The English legal system and sources of law MCQs with Answers
8 multiple-choice questions on The English legal system and sources of law for ICAEW BL Business Law. Try each one before revealing the answer and explanation.
Practise this chapter interactivelyQuestion 1
Marchetti Ltd issues a claim in the County Court against a former supplier for breach of contract. Which statement correctly describes how the case will be conducted and decided?
- A) The supplier is the defendant, and Marchetti Ltd must prove its case beyond reasonable doubt
- B) Marchetti Ltd is the claimant, it bears the burden of proving its case on the balance of probabilities, and if it succeeds the supplier will be found liable
- C) The case will be brought by the Crown Prosecution Service, and the supplier will be found guilty or not guilty
- D) The supplier must prove on the balance of probabilities that it was not in breach, because in civil cases the burden of proof lies on the defendant
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Answer: B) Marchetti Ltd is the claimant, it bears the burden of proving its case on the balance of probabilities, and if it succeeds the supplier will be found liable
In a civil claim the party bringing the action is the claimant, and the general rule is that the claimant bears the burden of proving its case. The standard is the balance of probabilities: the claimant must show its version is more likely than not. A defendant who loses is found liable; 'guilty' and 'not guilty' are criminal verdicts. Proof beyond reasonable doubt is the criminal standard, and the CPS prosecutes crimes, not contract claims.
Question 2
In the hierarchy of English courts, decisions of which court bind all lower courts on points of law?
- A) The Crown Court
- B) The High Court (King's Bench Division)
- C) The County Court
- D) The Supreme Court
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Answer: D) The Supreme Court
The Supreme Court sits at the top of the domestic hierarchy and its decisions bind every lower court. High Court decisions bind the County Court and magistrates but not the Court of Appeal. Crown Court and County Court decisions do not create binding precedent.
Question 3
In deciding an appeal about an accountant's liability for a negligent tax computation, a Supreme Court justice remarks that the result would have been different if the client had been told to take independent advice. Years later, the High Court hears a case in which the client was told exactly that. What status does the justice's remark have in the later case?
- A) It binds the High Court, because every statement in a Supreme Court judgment binds lower courts
- B) It binds the High Court only if the other justices expressly agreed with it
- C) It is obiter dictum, so it is persuasive but not binding, because it was not necessary for the decision on the material facts
- D) It has no legal significance at all, because courts may not comment on hypothetical facts
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Answer: C) It is obiter dictum, so it is persuasive but not binding, because it was not necessary for the decision on the material facts
Only the ratio decidendi, the legal principle necessary to the decision on the material facts, binds lower courts. A remark about what would have happened on different, hypothetical facts is obiter dictum. Obiter dicta of senior judges can be highly persuasive, and the High Court may choose to follow one, but it is not obliged to. Agreement by other justices does not turn an obiter remark into ratio, and it is wrong to say such a remark has no significance at all.
Question 4
When interpreting a statute about workplace safety, a judge looks at what the law said before the Act was passed. She asks what defect Parliament meant to cure and reads the words to suppress that defect. Which approach is the judge using?
- A) The mischief rule
- B) The literal rule
- C) The golden rule
- D) The ejusdem generis rule
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Answer: A) The mischief rule
The mischief rule, derived from Heydon's Case, asks what mischief the earlier law failed to deal with and interprets the Act to remedy it. The literal rule gives words their plain meaning whatever the result. The golden rule departs from the literal meaning only to avoid an absurdity. Ejusdem generis is a linguistic aid used where general words follow a list of specific ones.
Question 5
An Act of Parliament on building safety gives the Secretary of State power to set detailed technical standards for fire doors by regulations. The Secretary of State then makes a statutory instrument containing those standards. Which statement about the statutory instrument is correct?
- A) It is primary legislation, because it has the full force of law
- B) It can be amended or revoked only by a further Act of Parliament
- C) It binds only the Secretary of State's own department, not businesses that make or fit fire doors
- D) It is delegated legislation, and a court can declare it invalid if it goes beyond the powers conferred by the enabling Act
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Answer: D) It is delegated legislation, and a court can declare it invalid if it goes beyond the powers conferred by the enabling Act
A statutory instrument made by a minister under powers in an enabling (parent) Act is delegated (secondary) legislation. It has the force of law and binds everyone within its scope, but it is valid only if it stays within the powers Parliament conferred. A court can quash it as ultra vires on judicial review, which it cannot do with an Act of Parliament. It can normally be amended or revoked by a further statutory instrument made under the same power, without a new Act.
Question 6
The Court of Appeal (Civil Division) is normally bound by its own previous decisions. Which of the following is NOT a recognised exception allowing it to depart from one of its earlier decisions?
- A) There are two conflicting earlier Court of Appeal decisions and it must choose between them
- B) The court now considers the earlier decision wrong because social and commercial attitudes have changed
- C) The earlier decision cannot stand with a later decision of the Supreme Court
- D) The earlier decision was given per incuriam, without regard to a binding authority or statute
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Answer: B) The court now considers the earlier decision wrong because social and commercial attitudes have changed
Under Young v Bristol Aeroplane Co, the Court of Appeal may depart from its own earlier decision in only three cases. These are conflicting earlier decisions, inconsistency with a later decision of the highest court, and a decision made per incuriam. Unlike the Supreme Court, it has no general power to overrule itself because it thinks an earlier decision was wrong or out of date.
Question 7
Two engineering companies are in dispute over a technical specification. They want a binding decision from an industry expert, reached in private and enforceable in much the same way as a court judgment. Which method of dispute resolution best meets their aims?
- A) Arbitration
- B) Mediation
- C) Negotiation between the companies' finance directors
- D) Litigation in the High Court
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Answer: A) Arbitration
In arbitration the parties appoint an independent arbitrator, often a technical expert, whose award is binding and can be enforced through the courts. The hearing is private. A mediator only helps the parties reach their own settlement and imposes no decision. Negotiation produces no third-party decision, and High Court litigation is public and decided by a judge rather than a chosen expert.
Question 8
Gareth, a finance director, is alleged to have moved company funds into his own account. He is prosecuted for fraud and acquitted, and the company then sues him in the civil courts to recover the money. Which statement is correct?
- A) The civil claim must fail, because an acquittal is conclusive proof that the funds were not misapplied
- B) The civil claim can be brought only by the Crown Prosecution Service on the company's behalf
- C) The civil claim may still succeed, because the company needs to prove its case only on the balance of probabilities
- D) The civil claim is barred because the same facts cannot be the subject of both criminal and civil proceedings
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Answer: C) The civil claim may still succeed, because the company needs to prove its case only on the balance of probabilities
The same conduct can give rise to both criminal and civil liability. An acquittal means only that the prosecution failed to prove guilt beyond reasonable doubt. The company, as claimant, can still succeed by proving its case on the lower civil standard. Civil claims are brought by the injured party, not by the CPS, and there is no bar on parallel or successive proceedings.