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Courts consider many different things when making a judgment in a particular case. While it is true that the letter of the law is what decides the majority of cases, there are times when subjective factors will come into play and the judge will be granted broad discretion in coming to his or her decision. Such a basis for a decision is called a policy judgment and is employed in a variety of circumstances. There is a clear difference between a policy judgment and a legal judgment, but it is a fine line, and is best illustrated through examples.
A policy judgment is a basis for a legal decision considering factors that are outside the direct interpretation of the law. Often, policy judgments may be made based on the assumed intent of the lawmaker. For instance, if there is a law prohibiting the removal of a certain plant from the ground because of a concern that the plant is becoming endangered, the letter of the law will likely state that any removal is a violation of the law. However, if a botanist who is collecting samples of the plant for use in a study with the aim of developing a method of protecting the plant from the disease that is causing its endangerment, then as a matter of policy a judge may throw out the charge.
Another typical situation that would give rise to a policy decision playing a fundamental role in the final decision of a court is if enforcement of certain rules would have objectively negative effects. This is common in contract disputes where a judge has discretion to enforce certain clauses within a contract. For example, a non-compete agreement that an employee signs when he or she begins work with a company may be unenforceable as a matter of policy. The judge will likely consider the geographic area to which the non-compete agreement pertains as well as the time the employee will have to wait to find similar work after his or her employment ends with the company in deciding whether it is enforceable. If the terms of the agreement are particularly unfair, the judge may refuse to enforce it based on such a policy judgment.
The difference between a policy judgment and a legal judgment can be boiled down to the source of the rationale behind the decision. If the judgment stems from a direct interpretation of a law, then it is a legal judgment. For example, in the previous example with the non-compete agreement, consider a different scenario where the jurisdiction in which the agreement applies has a law outlawing non-compete agreements. If the court holds that the agreement is unenforceable based on that statute, it would constitute a legal judgment.