Throughout the world, there are two basic types of legal systems: common law and statutory law. Statutory law systems are also often referred to as civil law systems. In a common law system, precedents are derived from cases heard by courts with only a passing deference given to statutes passed by the legislature. In a statutory law system, all laws are originally made by the legislature and courts therefore rely heavily on the statutes when deciding cases, with little authority to make new law or interpret existing law. The basic difference then between common law and statute law lies in how the laws are made and interpreted.
Most legal systems in Europe, with the exception of England, and in other parts of the world use a statutory law system. In a statutory law system, the legislative body within the country drafts the laws and they become codified as part of the laws of the country. When a legal decision needs to be made, whether in a civil or criminal matter, a judge refers to the existing statutes to render a decision. The original intent in statutory law systems was for the judge simply to apply the law, not make law.
The concept of common law originated in England and is still used there today. In addition, many former English colonies, such as Australia, Singapore, Hong Kong, and the United States, are common law countries. Common law countries use a system known as stare decisis to make laws. Stare decisis stands for the principle that similar cases should be decided in a similar manner, and allows judges not only to apply the law, but to also interpret and thus actually make the law. Under common law, when a judge in a high court makes a ruling, courts of the same standing and lower courts must consider that ruling to be the law unless and until a higher court overrules the decision.
In some systems, both common law and statute law are used at the same time. Scotland, for instance, was originally a statutory law country; however, as the court of England is considered the highest court in the land, the original Scottish statutes are now interpreted by a common law system. In the United States, common law and statute law also co-exist. Although many laws are originally promulgated by the legislature, they are often open to interpretation by a judge and may ultimately be struck down by the Supreme Court if found to be unconstitutional. Common law and statutory law also co-mingle in traditionally statutory law countries, as the idea that a judge has no authority to interpret the law is often impractical.