Decision Making / 1 / 1.5 / 1.5.10

1.5.10 Masking The Reasoning Behind Decisions—Ratio Decidendi And Obiter Dictum

In Law, for example, the actual basis upon which a judge formulates a specific decision is infrequently spelt out. Instead, the laws and precedents upon which a judgement is ostensibly based are enunciated. This leaves students of law and the legal fraternity, more broadly, often wondering… ‘what was the judge really thinking?’ The difference between ratio decidendi and obiter dictum is explained as follows:

‘A judge will often find it necessary or convenient to state principles of law which relate to hypothetical events rather than to specify facts of the case.

Such statements sometimes serve to illustrate or clarify the principle which is actually applied in the case (the ratio) but they are not themselves rationes.

Any such statement of a rule of law is called an obiter dictum … The distinction between ratio and obiter, therefore, can be stated thus:

pronouncements of legal principle necessary for the judge’s decision on the established facts of the case are the ratio or rationes decidendi of the case, whereas the pronouncements of legal principle which are not strictly relevant to the issue or issues will be obiter dicta only. It must be appreciated, however, that not every statement of a rule of law by a judge is necessarily ratio or obiter. Frequently, during the course of the judgement, the judge will restate and discuss rationes from existing cases.

That is simply a recitation of the development of the relevant legal principles—a foundation of the judge’s reasoning—but those statements are neither ratio nor obiter in the case before the court (Morris, et al., 1992: 40).’

By comparison with deliberations of the judiciary, when it comes to executive decision making which brings its own risks and influences how risk-management strategies are formulated, relatively few public statements of obiter are made. Further, the ratio involved in a particular decision is revealed even less frequently. So, the real basis of decision making invariably remains masked. Of course, what constitutes obiter and ratio only makes sense in the context of deliberate decisions. Many decisions are made under time constraints or when information is incomplete. These are the most likely situations in which executive decision makers will invoke heuristics or mental short cuts. It is the author’s observation over many years that busy decision makers who should take time for considered decisions frequently do not, instead, it seems, often relying heavily on the potentially unsubstantiated advice of others, on trust, and invoking their decision heuristics for the final choice. The observations of Barnes (1984) and Powell (1995) are also relevant here. Despite the appearance of time being taken over a decision, many highly important decisions can apparently be made on the basis of judgement and intuition. Klein (1998) suggests that the extra time available to decision makers is spent mentally simulating events that might follow implementation of the chosen strategy and developing justification for choices already made.

When decision makers use heuristics to resolve complex, dynamic issues the chance of error increases. That decision makers use intuition and judgement when deliberate decision making would be more appropriate can be problematic. In practice, whether a decision is deliberate or based on intuition and judgement can be difficult to determine, just as it is difficult to obtain a judge’s statement of his ratio.