They are known as precedents under a process named as “stare decisis”. Such interpretations are segregated from the statutory laws which are the codes and statutes which are acted upon by the legislative bodies.
The regulations formed by the governmental agencies based on statutes is called the regulatory law; and it is known as common law in some states and form the generally accepted laws in the earlier English colonies. The hearings and trials which are not chosen as ‘courts of first impression’ never have outcomes or rulings that form the case law so such cases are not considered as precedents in case of future decisions of court. In the tradition of common law, the court decides the law which is applicable to a case by analyzing statutes and then applying precedents to record why and how former cases have been given an outcome.
The systems of common law follow the rule of “stare decisis” unlike the civil law systems.
Generally most of the courts have to abide by their previous decisions in the cases of similar type, and all the lower courts need to make decisions in accordance with the previous outcomes of higher courts.
In general, higher courts never have a direct oversight over the record of lower courts. Therefore, the higher courts cannot take an initiative at any time to override the judgments of the lower courts. In case a judge gives a decision against the precedent and there is no appeal for the case, the decision stands.
A court of lower order may not rule against a precedent which is binding, although it may feel that it is unjust; it can only express the hope that the legislature or a higher court may make reforms to the rule being questioned.
In case the court understands that the trends in legal reasoning make the precedent of no use, and wants to avoid it and assist in making the law better, it can state that the precedent is not consistent with the next higher authority, or it should be differentiated by some significant difference between the facts of the cases.
If the judgment goes for an appeal, the appellate court has the chance to review the case for the appeal and the precedent, probably which overrules the former case law by forming new precedent of greater authority. It can happen many times as the case moves up through appeals in succession. The different roles of case law in civil and common law traditions create differences in the way that courts render decisions.