The Reasons behind the Creations of Equity, what is it, and how it is Different from Common Law? The Present Relationship between Common Law and Equity What is equity? Equity seemed to be a very common term yet its meaning poses very important ideas in achieving fairness in individual factual circumstances. Alastair Hudson says “it is the means by which a system of law balances out the need to for certainty in rule-making…” (p. 7). The Hegelian definition of equity defines the term in terms rights and the content of lawsuits.
Hegel’s definition goes “Equity involves a departure from the formal rights owing to moral or other considerations and is concerned primarily with content of the lawsuit” (Hudson, p. 7). Equity therefore has to do with the set or principles or rules based on the principle of ethics and fairness, which form part of the general rules of the common law. Equity is what makes the law fair to everybody. Equity is what makes the law just, moral, ethical, and universal in principle. Reasons behind the creation of Equity.
Based on the meaning of the term above, equity is essential in rule making as it provides the ethical, moral and judicial principles of the common law and we seem to have basic understanding as to how and why equity was created. Historically however, the creation of equity was meant to correct some defect in the English common law system. Kristen Edwards points out that the doctrine of equity “was developed by the court of Chancery in England as a response to defects in the common law system which had resulted in rigidity, inflexibility and, injustice” (p.1).
Equity was created to modify the rigidity of the common law as Edwards says “…equity intervenes to modify the operation of the rules of the common law. Equity according to Edwards was created not just as a set of ethical rules as part the common law; it is anchored on flexibility and good conscience (p, 2). Historically, equity according to Kristen had passed the three different stages namely, the medieval period 1300-1500, the formative period, and the period of systematization.
During the medieval period, equity plays an important role in the decision although during this time, there was no clear distinction between common law court and equity. However, it is when the matter “touched the conscience of the judges of chancery” (p. 3) that remedy of the case is granted. The formative period 1500-1700 was a little bit different as rules, as Equity during this period was separated from the common law courts. Equity now had a separate court and petitions, and procedures were addressed to the chancellor rather than the king.
The difference of this new justice system according to Edwards was that plaintiffs “who had been denied an action at common law court, can still get justice. The plaintiff was “permitted to amend her written claim orally and the defendant was required to answer. In this way Edwards stressed that Chancellor would discover truth by any means within his power (p. 4). In the common law courts, the defendant could not be compelled to testify, but the chancellor could examine the defendant under oath (p. 4).
The formative period provided the ground for a more objective, more ethical, and fair justice system and it laid the foundation of a “more legal rules, principles, and precedents” (p. 4). The period of systematization 1700-1900 however, sparked tension between the common law courts and courts of equity due to the latter’s continued expansion. Edwards cited that after the publication of the famous treatise Dialogue Between Doctor and Student which argued that equity should have precedence over the common law “because its interventions were based on justice and good conscience” subsequent publications between two courts followed.
The case was finally resolved when King James I decreed that where common law and equity conflicted, equity prevailed. The case stated “The office of the Chancellor is to correct men’s consciences for frauds, wrongs and oppressions of what nature so ever they be, and to soften and mollify the extremity of the law” (p. 4). How is equity different from common law? Objectively, both common law and equity are set of rules intended to instill order, peace, and security and their aim is the same, to render justice. However, they also have obvious differences.
These obvious differences can be seen in the following statement made by Aristotle as follows, “The source of the difficulty is that equity, though just, is not legal justice, but a rectification of legal justice. The reason for this is that law is always a general statement, yet there are cases which it is not possible to cover in a general statement… Hence, while the equitable is just, and is superior to one sort of justice, it is not superior to absolute justice, but only to the error due to its absolute statement.
This is the essential nature of the equitable; it is a rectification of law where law is defective because of its generality (cited Hepbum, p. 3). From this statement there are some obvious differences that could be easily noticed. The first is, equity is not a legal justice, second, equity is superior and just but it is not to absolute justice, superior only in the sense of possible error of the common law. Equity is only rectification to correct error of the common law. The present relationship between common law and equity.
The present relation between common law and equity is still the same during its early beginning. The two courts functioned differently as Eva Micheler stated “For some time the courts of law and the court in equity operated independently. The courts at law continued to develop the body of case law already established by them, which came to be referred to as law” (27). Micheler explain that both the common law courts and the court s of equity still exist, but the courts of equity has developed its own body of case law and is relying on its own precedent distinguishing previous authority on the basis of fact (p.27) .
However, Micheler cited that equity courts have an available advantage over the law courts due to the reason that equity courts was subject to less rigid “procedural rules” (p. 27). An example to this according to Micheler was that equity courts are able to grant injunction relief or specific performance contract. The courts of law on the other hand did not have procedural rules that would enable them to grant an injunction. The present relationship between common law courts and equity courts is that equity governs the whole areas of the law that have developed by law.
This relations according to the book published by CUP Archive entitles Equity Also the forms of Action at common law, should not be viewed as conflicting system. Rather the relation of equity court with common law court must be seen in the context of “code and supplement” (p. 156). The book pointed out that equity was “not self-sufficient system but were merely a collection of additional rules while the common law was a complete system. The court of equity therefore is an integral part of the common law.
It is the conscience, the moral, and the fairness of the legal law. Thus, according to the book, “…if the common law had been abolished equity must have disappeared also, for at every point. Conclusion Apparently, equity provides us with a new understanding of how justice is served. We understood that without equity, the laws that govern our society may be harsh and prone to injustice. However, the creation of equity enhanced the objectiveness of the law and at the same time it offers some sort of hope that justice based on ethical considerations will be granted.
The creation of equity was a great help towards a more humane and ethical decision for a certain case. The book stated “If the equitable jurisdiction of the Chancery had been destroyed, there still would have been law for every case, some what rude law it may be, and law imperfectly adaptive to the needs of our times. The courts of equity was therefore a great contribution of the English law to the system of justice. It made courts decision ethically, morally, and socially acceptable and credible.
However, as it has been said above, common law and courts of equity should seen as two sets of rules that have distinct function serving as teammate with each other Numbers of words used, 1,471 Bibliography Edwards, Kristen Australian Essential Equity & Trust U. K. Routlege 2000 Equity Also the Forms of Action at Common Law Cup Archive: Hepburn, Samantha J. Principles of Equity and Trust Great Britain: Routlege 2001 Hudson, Alastair Equity and Trusts Great Britain: Routlege, 2001 Micheler, Eva Property in Securities USA: Cambridge University Press, 2007.