Binding precedent is a judge's decision which must be followed - some courts can be bound by their own decisions so create a binding precedent for themselves and some courts are bound based on their position in the hierarchy
When a case involves a point of law, lawyers from both parties will research previous cases to ensure judges follow precedent
At the end of the case there is a judgment:
Summary of the facts
Ratio decidendi
Obiter dicta
Verdict
Ratio decidendi:
Reason for the decision
Part of the judgement which is binding on all the lower courts - the case facts must be similar
Sometimes the obiter dicta of one case can develop into the ratio decidendi of another case
Donoghue v Stevenson - The HoL's states that a manufacturer owed a duty of care to the customer
Daniels v White - Court followed ratio decidendi from Donoghue v Stevenson
Obiter dicta:
Other things said 'by the way'
Decision that may be followed so this is part of the judgement which creates persuasive precedent
Just may speculate on how the decision may have been different considering other facts
This can become a binding precedent if it is picked up in a later case and made into the ratio decidendi
Brown - Obiter dicta was tat a person can consent to tattooing and branding
Wilson - Obiter dicta was picked up from Brown - wife could consent