Cecily Zamora
The distinction between law and equity is a well-known concept in trial litigation. The common law involves juries and monetary damages, while equity involves chancellors and injunctions. In modern practice, the most important distinction between the two is the set of remedies each offers. While legal remedies typically involve monetary compensation, equitable remedies involve injunctions, specific performance, or vacatur. A court will usually award equitable remedies when a legal remedy is insufficient or inadequate. For example, a plaintiff may want their only milk cow back from their neighbour, instead of just its monetary value.
| Characteristics | Values |
|---|---|
| Type of remedy sought | Legal claims typically involve monetary compensation, while equitable claims ask the court to order the defendant to do or stop doing something. |
| Nature of damages | Legal remedies involve money damages, while equitable remedies involve non-monetary relief, such as injunctions or specific performance. |
| Court system | Historically, separate courts of law and equity existed, but some states have merged these into unified court systems or given jurisdiction to both types of courts. |
| Jury involvement | Equity cases are typically heard without a jury, allowing judges greater flexibility in resolving disputes. |
| Purpose | Law is about monetary compensation, while equity is focused on fairness and preventing ongoing or future harm. |
| Jurisdiction shopping | Litigants may seek the court with the most favourable jurisdiction, such as an equitable injunction to prohibit the enforcement of a common law court order. |
| Complexity | Equity is often seen as a remedy for the rigid procedures of common law courts, but the interplay between the two can be complex and confusing. |
| Applicability | Legal claims focus on compensating past harm, while equitable claims are more common in the public arena, such as seeking an injunction against a government agency. |
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What You'll Learn
Law and equity in the US
The difference between law and equity in the US centres on the type of remedy a plaintiff seeks from the court. In the US, the term "law" refers to the legal system, which involves monetary damages as a remedy. On the other hand, "equity" refers to a set of civil law remedies and procedures that are distinct from "legal" ones. These equitable remedies do not involve money but instead aim to prevent ongoing or future harm through court orders.
Historically, the US legal system was influenced by English common law and equity jurisprudence. The framers of the US Constitution granted federal courts jurisdiction over both common-law actions and suits in equity. This meant that federal courts could hear cases involving common law and equity, with equity jurisdiction pertaining to situations that could arise in almost any litigation. For example, cases involving fraud, accident, trust, or hardship would typically fall under the purview of equitable jurisdiction.
The federal courts' equity jurisdiction was further clarified in the Judiciary Act of 1789, which provided circuit courts with original jurisdiction over equity cases involving specific criteria, such as monetary amounts in dispute or the involvement of aliens or citizens of different states. Additionally, the Process Act of 1792 emphasised the distinction between equity and common law, ensuring that judges applied the appropriate doctrines and procedures to each case.
In the US, some states established separate chancery courts to deal solely with equitable relief, while other states empowered their courts of common law to exercise equity jurisdiction. The development of equity jurisdiction as a remedy for the rigidity of common law courts led to tensions and debates about the power and discretion of federal judges.
Today, US courts may award both legal and equitable remedies in certain cases, particularly in employment or contract law. For example, in CIGNA Corp. v. Amara et al. (2011), the Supreme Court held that for violations of ERISA, the aggrieved party may be entitled to both legal remedies and "appropriate equitable relief". However, courts are sometimes hesitant to impose equitable relief, especially specific performance, as it requires ongoing monitoring to ensure the defendant complies with the court order.
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Law and equity in India
The concept of equity was introduced in India during the British colonial period, with roots in English common law. The British established courts of equity, which applied the principles of fairness and justice to supplement the rigid application of common law. The Indian legal system, particularly Hindu and Islamic law, incorporated principles of equity and fairness even before the British arrived. The Charter Act of 1823 gave the Supreme Court of Bombay equitable jurisdiction, making it one of the first courts in India to apply equity systematically.
The Specific Relief Act of 1877 codified various equitable remedies such as specific performance and injunctions. In 1963, the Specific Relief Act was passed again, this time by the Parliament of India, codifying most equitable concepts and making them statutory rights. The Indian Trusts Act of 1882 introduced the concept of trust and fiduciary duty into Indian law, codifying the principles of equity in trust law. The Indian legal system greatly emphasizes the importance of equity, which is derived from the Latin word 'aequitas', meaning fairness or justice. Equity provides a framework that supplements strict legal rules with fairness, morality, and justice, ensuring that rigid applications of law do not lead to unjust outcomes.
The Indian Constitution incorporates equity principles, particularly through the Preamble and Fundamental Rights enshrined in Part III. Articles 14 (Right to Equality), 21 (Right to Life and Personal Liberty), and 39A (Equal Justice and Free Legal Aid) reflect equity’s influence, ensuring the legal system functions fairly and justly. Indian courts have developed a robust body of case law grounded in equity, regularly invoking equity to grant remedies such as injunctions, specific performance, and restitution.
Equity in India has evolved and expanded significantly over time, reflecting a unique blend of Hindu law, Islamic law, and indigenous customs. The broad principles of English decisions based on equity may apply in India, but the ratio itself may not act as a binding precedent. Equity is a body of law that was developed in the English Court of Chancery to provide legal remedies when common law was inflexible and could not fairly resolve disputes. Equity has unique rules and principles and is administered by courts of equity, separate from common law.
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Law and equity in Australia
In Australia, equity law is an important part of the legal system, providing remedies for cases where common law is insufficient or inadequate. The concept of equity originated in antiquity with the writings of Aristotle and Roman law, and later became an independent body of law within common law systems. In Australia, equity and common law operate through the same court system, but they have different remedies and approaches.
Common law, often referred to as the black-and-white rules, prioritises the strict enforcement of contracts and rules as written. If there is a breach, courts usually award financial compensation. On the other hand, equity law, or the shades of grey, prioritises fairness and justice, even when the facts of the case may not support this approach. Equity law often comes into play when parties are unable to resolve an issue through common law and turn to the courts for a solution.
One key difference between the two systems is that common law courts typically award monetary damages, while equity courts grant injunctions, specific performance, or vacatur. For example, in cases involving unique pieces of real estate or requests for specific performance, equity relief is often sought. Equity law also recognises the concept of trusts, where legal ownership and beneficial ownership can be separated for fairness.
In Australia, equity remains a distinct body of law, with the orthodox view rejecting the "fusion fallacy". The state of New South Wales is particularly well known for its strong Equity jurisprudence. In 1972, NSW introduced reforms that empowered both the Equity and Common Law Division of the Supreme Court of NSW to grant relief in either equity or common law. Additionally, NSW adopted a key principle emphasising that in the event of a conflict between common law and equity, equity would prevail.
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Common law and equity
Common law, also known as royal law, dates back to the 11th century after the Norman Conquest of England, when royal justice was administered through three central courts: the Court of King's Bench, the Court of Common Pleas, and the Exchequer. These courts, established by the King's authority, had jurisdiction over disputes between the King's subjects based on the King's writ. Common law courts follow a rigid and formalised procedure, focusing on monetary damages as a remedy.
Equity, on the other hand, emerged as a separate court system to address the inflexibility of common law. Equity courts were based on general principles of fairness and aimed to provide remedies in situations where the strict application of common law would result in injustice. The development of equity courts allowed for more flexibility in hearing cases and resolving disputes. The two systems often came into conflict, with litigants strategically choosing between the two jurisdictions.
In the 1870s, the Judicature Acts in England fused the courts of equity and common law into a unified court system, recognising equity's primacy over common law. However, the substantive distinction between the two remained, and they continue to offer different types of remedies. Legal remedies typically involve monetary compensation to make the plaintiff whole after harm, while equitable remedies focus on preventing ongoing or future harm by ordering the defendant to take or refrain from specific actions.
Equitable remedies include injunctions, specific performance, or vacatur, and are often applied in situations involving unique assets, such as real estate. Courts may hesitate to impose equitable relief due to the need for ongoing monitoring to ensure compliance with court orders. However, in certain areas of law, such as employment law, both legal and equitable claims may be combined, seeking compensation and changes in behaviour or policy.
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Law and equity remedies
The difference between law and equity lies in the type of remedy a plaintiff seeks from the court. A legal claim typically involves a request for monetary compensation, such as payments for medical bills, lost wages, or other financial losses. The purpose of a legal claim is to compensate the plaintiff for harm caused by the defendant's actions. On the other hand, equitable remedies are about fairness and aim to prevent ongoing or future harm through court orders. An equitable claim asks the court to order the defendant to do or stop doing something, such as through injunctions, restraining orders, or requirements for a party to fulfill a contract.
Equity is a centuries-old system of English jurisprudence where judges based their decisions on general principles of fairness. This was in contrast to the rigid procedures of the common law courts, which could result in injustice if the rules were applied too rigidly. The development of a court of equity as a remedy for the rigid common law led to inevitable conflict between the two systems, with litigants seeking out the most favourable jurisdiction for their case. This conflict was particularly notable in the 1615 clash between Lord Chancellor Ellesmere and the Chief Justice of the King's Bench, Sir Edward Coke, which centred on the enforcement of a common law court order.
In the United States, the federal courts were granted jurisdiction over both common-law actions and suits in equity by the framers of the Constitution. While some states maintained separate courts for law and equity, others vested their courts with both types of jurisdiction. In small-claims cases, courts are more likely to issue equitable relief, such as ordering a contractor to work with a dissatisfied homeowner. Equitable remedies are also more common in the public arena, such as when citizens seek an injunction against a government agency.
A court will usually award equitable remedies when a legal remedy is insufficient or inadequate. For example, courts will generally grant equitable relief when a claim involves a unique piece of real estate or when the plaintiff requests specific performance. However, courts are sometimes hesitant to impose equitable relief, especially specific performance, as it requires ongoing monitoring to ensure the defendant complies with the court order.
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Frequently asked questions
In law, the term "equity" refers to a particular set of remedies and associated procedures involved with civil law. These are distinguished from "legal" remedies, which typically involve monetary damages. Equity, on the other hand, enters injunctions or decrees directing someone to act or refrain from acting.
Equitable remedies are granted when legal remedies are insufficient. For example, a court may award equitable relief for a claim involving a unique piece of real estate or if the plaintiff requests specific performance.
The distinction arose in England, where there were once separate courts of law and courts of equity. Following this pattern, some American states created chancery courts to deal solely with equitable relief.
The 1615 conflict between common law and equity was caused by a clash between Lord Chancellor Ellesmere and the Chief Justice of the King's Bench, Sir Edward Coke. This tension reached a climax in the Earl of Oxford's case, where a judgment was allegedly obtained by fraud. Chancellor Ellesmere issued an injunction from the Chancery, prohibiting the enforcement of the common law order.
In the United States, federal courts and most state courts have merged law and equity into courts of general jurisdiction. However, the substantive distinction between the two has been retained. Similarly, in 1972, New South Wales introduced reforms that empowered the Equity and Common Law Division of the Supreme Court to grant relief in either equity or common law.
