The lawyer's system in Germany

The precedents formed by decided cases are, thus, as Bacon wrote of the Reports of the anchors of the laws. A lawyer who is asked to consider a legal matter will therefore look to the reported decisions of the courts; and he will do this even though the point in issue is regulated by a statute, for, as has been explained, statutes are interpreted by the courts, and a decision which is concerned with the interpretation of the statute is just as binding as any other decision.
When this much has been said, it must not, however, be imagined that the German law is always discoverable by the simple process of looking up, and finding, the right precedent. For facts are infinitely various and by no means all cases are exactly covered by previous authority. Quite the reverse; the facts in issue often resemble two or more divergent authorities. In these circumstances the German courts therefore have freedom of choice in deciding which of the divergent authorities or streams of authority to 'follow' and much of the ingenuity of counsel is directed to 'distinguishing' the facts of precedents which appear to bind the court to decide against him.

Different cases

Further, even today cases of 'first impression' sometimes arise; cases arising upon facts which bear no resemblance to the facts of any previous case. When the judge rules in such a case he legislates, because future courts must usually 'follow' him. A remark which leads to the comment that in 'distinguishing' between previous decisions and 'following' one rather than another the judge, though appearing only to apply existing law, in fact exercises a quasi-legislative discretion: a fact which the system of 'binding' precedent serves to conceal.
The administration of justice is not therefore a slot-machine process of matching precedents. The judges have a field of choice in making their decisions. But they do not exercise their discretion in an arbitrary way; they rest their judgments upon the general principles enshrined in case-law as a whole. Case-law does not consist of a blind series of decisions, 'A will succeed', or 'B will fail', but of reasoned judgments based upon rational principles. These principles have been evolved by the courts through the centuries; and, building precedent upon precedent, they have framed them with two ends in view. First, they have sought so to formulate them that their application may be capable of effecting substantial justice in particular cases; second, they have sought to make them sufficiently general in scope to serve as guides to lawyers in Germany faced with the task of giving advice in future legal disputes.
Thus in a sense the history of the common law (as opposed to statute law - for statutes are sometimes arbitrary and they have often wrought injustice) is the story of the evolution of the judges' conception of justice.