Equity can be broadly described as being just or fair, whereas the legal meaning of the term equity refers to the rules determined to mitigate the severity of the common law rules and those issues that are not be covered under the common law jurisdiction. The beginning of the equity law can be traced to England, where it was administered by the high court of chancery. It is important to understand the nature and the history of the law of equity to understand the concerns it addresses in a legal system.
History of Equity Law
Throughout the 13th and 19th centuries, the common law system was developed and advanced in England. Common law is largely uncodified. This implies that there is no complete compilation of legal principles and statutes; thus, the common law system relies on few statutes, which are a result of the decisions of the legislative authority. It is extensively based on precedents or the judicial decisions made in comparable cases. Generally, the decisions of higher courts entrust the judges of the common law system with an enormous role in shaping the law. These precedents are recorded and documented as case laws though yearbook, and legal reports.
In the past, the common law largely depended on the judicial precedents, which were much formal and rigid. The inflexibility of the common law system left the people distressed since they were unable to obtain relief from the Kings Bench which administered the legal system. Many litigants were disappointed by the common law system, when their complaints were dismissed on the basis of non-compliance to the procedures of the court, or due to the lack of precedents on the particular issue. The aggrieved citizens then started petitioning to the King who was positioned at the apex of the legal system, also known as the “Fountain of Justice.” These petitions appealed the king to do justice on certain issues that were not addressed or were not justly dealt by the Kings Bench. With the increase of petitions made to the King, he gave the task of inquiring on these requests to the “Keeper of the king’s Conscience” or the Chancellor who headed the Chancery. The Chancellor usually determined the petitions based on moral grounds. In other words, chancery would either issue or withhold relief according to his sense of what is right and wrong or on a merit basis, unlike based on the judicial precedents of the common law courts.
The independence of the court of chancery was established in the year 1474 when the chancellor had issued the first decree in his own name. The chancellor was not bound by the English writ system to use juries during the trials. He had the sole discretion and authority to summon the people to inquire on the cases, order disclosure of documents, to decide the cases based what is morally right.
Rivalry Between Common Law and Equity Law
The flexibility, simple procedures, and equitable remedies made the court of equity (The Chancery) became popular among the people. However, problems arose when the jurisdiction of the chancery court started to overlap with the jurisdiction of the common law courts; for example, the injunctions issued by the chancellor restraining action at the common law courts were contested by the common law practitioners. Subsequently, a rivalry formed among the two courts, as described in the case Earl of Oxford’s Case, where the common law court had decided in favor of one party and the court of equity issued an injunction against the enforcement of the judgment. It was later resolved that the law of equity will prevail over the common law. Accordingly, the equity law presumed its place in the English legal system. And the authority of the Chancery court became more distinct since it was through this courts that monetary reliefs alone were shown to be inadequate.
Since it was criticized that the verdicts provided by the chancellor’s varied according to the different chancellors, it was necessary to systemize the court of equity, which eventually led it to become more rigid. In order to resolve the issue, attempts were made to integrate the common law courts and the court of chancery through some legislative enactments such as the Common Law Procedure Act (1854) and Chancery Amendment Act (1858). The Judicature Acts (1873) brought the administration of the law and equity and common law under a single court system. This system of ending the secondary legal system, and allowing a single legal system to offer equitable legal remedies based on natural justice was not only applicable in the United Kingdom but in other commonwealth nations as well.
Remedies in Equity Law
As discussed above, the remedies provided under the equity law have been viewed as extraordinary remedies, as opposed to limiting remedies to monetary relief alone. Equity law recognizes and address unjust enrichment. Accordingly, some of the popular equitable reliefs are as follows.
- Restraining Order/Injunctions -The court can direct a party to do or restrain from doing something. Injunctions can be classified as mandatory (to do something) and prohibitory (refrain from doing something).
- Specific Performance -The court can direct a party to do something in specific; this is most commonly observed under the law of contracts.
- Recession -The court may relieve the parties of a contract from all its contractual obligations i.e. to the position as if a contract never existed between the parties concerned.
- Account of Profits – This remedy is used to prevent unjust enrichment by recovering a monetary value from the unjustly enriched party.
- Restitution – The court directs a party to restore something that he or she is not permitted to hold. This remedy is usually sought along with the relief of recession.
- Declaratory Judgment – The courts can decide on the rights and obligations of the parties to resolve any legal uncertainties that may arise.
- Reformation/ Rectification – The court declares certain changes in a written document, either in order to reflect what might have been the original provision in such document or to correct a contractual mistake.
- Equitable Estoppel – This is a body of rules that keeps a person from making declarations that are conflicting to their earlier position on specific matters under the matters examined in the court, or exercising a specific right, or from bringing up any claims at such instances the person is said to be stopped.
- Subrogation – This is the remedy where one individual is qualified to enforce the existing or revived rights/privileges of another for one’s own benefit/ advantage.
Principles or Maxims of Equity
Maxims of equity are the principles of equity. They set out the general standards or rules which represent and administer the manner in which the law of equity works. They have a tendency to represent the characteristics of equity, as being more adaptable, receptive to individual needs, taking into account the previous behavior of the parties concerned, before deciding on a case. The below listed are some common maxims of equity law though it is considered to be an exhaustive list.
Equity will not suffer a wrong to be without a remedy (ubi jus ibi remedium.) -This reflects that all wrongs can be redressed in the courts.
Equity follows the law -this principle was established to state that equity works alongside the law as opposed to the idea that it competes with the rules set out in the legal system.
He who seeks equity must do equity – The person who seeks an equitable remedy should be prepared to be fair and equitable to the defending party. This refers to the future actions that may arise after an inquiry at the courts.
He who comes into equity must come with clean hands – It is important for the seeker of equity to have behaved in an equitable and just manner. This refers to the past actions of the plaintiff, prior to the commencement of the case at the
Delay defeats equities – This principle established that relief would be provided only to those who are able to take timely action i.e. unreasonable delays limit the chances of equitable claims.
Equality is equity – The court of law always considers the parties to the case on a leveled ground, based on their rights and duties.
Equity looks to the intent rather than the form – This principle refers that the law of equity looks beyond the facts of the case to also understand the intention of the parties on a certain issue.
“Court of Chancery edited” By Thomas Rowlandson (1756–1827) and Augustus Charles Pugin (1762–1832) (after) John Bluck (fl. 1791–1819), Joseph Constantine Stadler (fl. 1780–1812), Thomas Sutherland (1785–1838), J. Hill, and Harraden (aquatint engravers) – Unknown (Public Domain) via Commons Wikimedia