William Blackstone's declaratory theory

The declaratory theory relates to the fact that judges do not make laws they simply discover and declare what the law has always been. That is why case law operates retrospectively. So when a precedent is overruled, the earlier court found the wrong law and the overruling court found the right one. This is often seen as a mere fiction and the reality is that judges do make and change the law.

There is a good discussion of the theory in Kleinwort Benson v Lincoln CC