Legal Definitions - retrospective

The term retrospective describes a law, rule, or decision that applies to events or situations that occurred in the past, before the law, rule, or decision itself was enacted or made. Essentially, it means looking backward in time to apply a new standard or consequence to actions that have already taken place.

• Example 1: Tax Legislation

  Imagine a country's legislature passes a new income tax law in October, but the law specifies that the new tax rates and deductions will apply to all income earned since January 1st of that same year. This is a retrospective application because the new tax rules are being applied to income earned during the months of January through September, which occurred *before* the law was even enacted. Individuals and businesses must now recalculate their taxes based on a standard that did not exist when they earned that income.

• Example 2: Professional Licensing Requirements

  Consider a state board for medical professionals that introduces a new mandatory ethics training requirement in March 2024. The board then announces that for all license renewals in 2025, professionals must demonstrate completion of this ethics training *during the 2023 calendar year*. This is a retrospective requirement because it imposes a new obligation (completing ethics training) on actions (or inactions) that occurred *before* the rule was announced. Professionals who did not complete such training in 2023, because it wasn't a requirement at the time, are now retroactively non-compliant for their 2025 renewal.

• Example 3: Employee Compensation Policy

  A company announces a new bonus program in July, stating that all employees who exceeded their sales targets during the first quarter of the year (January-March) will receive an additional commission payment. This bonus was not part of the compensation plan or expectations when the sales were made in Q1. This is a retrospective application of a benefit. The company is applying a new rule (the bonus payment) to past actions (exceeding sales targets in Q1) that occurred before the rule was created, altering the financial outcome of those past efforts.