Stare decisis (Latin: "to stand by things decided") is the doctrine of precedent: courts are bound to follow the legal reasoning (ratio decidendi) of earlier decisions of courts above them in the hierarchy, and generally their own earlier decisions, when deciding cases with materially similar facts.
Ratio and Obiter
Only the ratio decidendi, the legal principle necessary for the decision, is binding. Observations made in passing (obiter dicta) may be persuasive but do not bind later courts.
In Common Law Systems
Precedent is central to English law. Decisions of the Supreme Court bind all lower courts; the Court of Appeal generally binds itself, subject to the exceptions in Young v Bristol Aeroplane Co (1944); and since the Practice Statement of 1966 the highest court may depart from its own previous decisions when it appears right to do so. Courts avoid an unwelcome precedent by distinguishing it on its facts.
In Civil Law Systems
Civil law systems, including Indonesia, do not formally recognise binding precedent. Judges are bound by statute, and each judgment binds only the parties. Nevertheless, consistent decisions of the Supreme Court, known as jurisprudence (yurisprudensi), carry strong persuasive authority, and the Supreme Court publishes landmark decisions and issues circulars (SEMA) to promote consistency.
Why Consistency Matters
Whether formally binding or merely persuasive, adherence to earlier decisions promotes equality before the law, legal certainty and judicial efficiency, while leaving room for the law to develop as society changes.