This stage covers the period between the year 950 CE and the sacking of Baghdad (1259 CE) and represents the decline of the ‘Abbaasid dynasty until its eventual collapse. Competitive debates called MunaadHaraat continued to flourish under the patronage of the ‘Abbaasid caliphs and some of these debates were actually recorded in books. In time, the spirit of rivalry largely generated by these debates spread to the masses, and Madh-hab factionalism became widespread. There was a drastic reduction in the number of Madh-habs, and the structure and operatin of the four that survived became highly systematized. Scholars within a Madh-hab were obliged to base their Ijtihaads solely on the fundamental principles (Usool) of their particular Madh-hab. During this period the compilation of Fiqh was further fomalized and used to further Madhhab rivalry.

During this stage, the number of major Madh-habs (schools of Islamic law) dwindled to four; three major and one minor. In order words , the Madh-habs of great Imaams like al-Awzaa’ee, Sufyaan ath-Thawree, Ibn Abee Laylaa, Abu Thawr and al-Layth ibn Sa’d had all disappeared leaving only the Madh-habs of Abu Haneefah, Maalik, ash-Shaafi’ee and Ahmad ibn Hambal. In time, these schools of Islamic legal thought became so predominant that the common people soon forgot that any other schools, even existed. Each of these schools soon took on a dynamism of its own and their followers started the practice of naming themselves after their respective Madh-habs. For example, al-Husayn ibn Mas’oud alBaghawee, author of the Fiqh classic, Sharh as-Sunnah, was Shaafi’ee after the Shaafi’ee Madh-hab.

During this stage the scholars of each Madh-hab analysed all the rulings of their Madh-habs’ founding scholars, deduced the fundamental principles behind their rulings and codified them. They also made limited Ijtihaads on issues which the founders had not come across. However, this area soon became exhausted due to the widespread use of hypothetical Fiqh, in and outside of court debates.

Ultimately independent Ijtihaad was discarded in favor of Ijtihaad based upon the established principles of a particular Madh-hab.

Ijtihaad Madh-habee, as this new form of reasoning came to be known, was based on the deduction of laws for new issues according to the scholars of this period sometimes differed with the founders of their Madh-habs with respect to the Furoo’ (secondary principles), but rarely with regard to the Usool (fundamental principles).

The scholars of the Madh-habs also made use of the principle of Tarjeeh which involved the favoring of certain opinions held by scholars within a given Madh-hab over other opinions of that Madh-hab on the same topic: Difference of opinion on one issue within a school had arisen when the founding scholars, as well as their students, changed their earlier opinions. Both versions (the previous and the altered) were recorded and passed on to later generations as different opinions of the Madh-hab. Differences of opinion had also arised from differen interpretations of statements made by earlier scholars of the Madh-hab. In each Madh-hab, the scholars during this period of consolidation sifted out weak and fabricated statements which had been attributed to the founders of their respective Madh-hab. They also classified the narrations of opinions of the founders according to their accuracy. This process of authentication and classification was referred to as Tas-heeh.

This detailed systematic treatment of Fiqh within each of the Madh-habs greatly facilitated the process of arriving at legal rulings within a Madh-hab. However, as in the case of the systematic treatment of the sources of Islamic law in the previous stage, the very fine distinctions elaborated on by the scholars of this period further contributed to Madh-hab factionalism.