The Practice Statement  3 All ER 77 was a statement made in the House of Lords by Lord Gardiner LC on July 26, 1966 on behalf of himself and the Lords of Appeal in ordinary, that they would depart from precedent in the Lords in order to achieve justice.
Until the year 1966, the House of Lords in the United Kingdom was bound to follow all of its previous decisions under the principle of stare decisis, even if this created "injustice" and "unduly restrict(s) the proper development of the law" (London Tramways Co. v London County Council  AC 375). The Practice Statement 1966 is authority for the House of Lords to depart from their previous decisions. It does not affect the precedential value of cases in lower courts; all other courts that recognise the Supreme Court (formerly the House of Lords) as the court of last resort are still bound by Supreme Court decisions. Before this, the only way a binding precedent could be avoided was to create new legislation on the matter.
A germane example is the case of Anderton v Ryan (1985) where the House of Lords interpreted the Criminal Attempts Act 1981 in such a way as to make the Act virtually ineffective. Only one year later in R v Shivpuri (1986) Lord Bridge (a member of the erroneous majority in Anderton) acknowledged the error and said "the Practice Statement is an effective abandonment of our pretension to infallibility. If a serious error embodied in a decision of this House has been distorted by the law, the sooner it is corrected the better".
By contrast, in Knuller v DPP, Lord Reid, who had previously given a strong dissenting judgment in Shaw v DPP, said while he still disagreed with the majority decision in that case, in the interests of certainty he would not overturn Shaw (even though the Practice Statement had given authority to do so).
This is the text of the Practice Statement:
|“||Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.
Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose therefore, to modify their present practice and, while treating former decisions of this house as normally binding, to depart from a previous decision when it appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlement of property, and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.
This announcement is not intended to affect the use of precedent elsewhere than in this House.
- — Lord Gardiner's statement in the House of Lords, July 26, 1966.
- See also  1 WLR 1234;  2 Lloyd's Rep. 151; (1986) 83 Cr. App. R. 191 (Note); (1966) 110 S.J. 584
- 1985 AC 560
- 1987 AC 1
- The English Legal System (17th ed) - Slapper v Kelly - ISBN 9 781138 944459
- Knuller (Publishing, Printing and Promotions) Ltd. v. DPP  A.C. 435
- Shaw v DPP  AC 220