Gavin Howe
The difference between law courts and equity courts lies in their jurisdiction and the nature of their remedies. Law courts, also known as common law courts, act 'in rem', meaning their jurisdiction involves claims against an item of property. Equity courts, on the other hand, operate 'in personam', dealing with cases that constitute acts against the conscience of a person or group of persons. Equity courts were developed to provide remedies in situations where the common law was deemed too rigid or inflexible to deliver fair resolutions. While most countries have separate courts for law and equity, some, like India, administer both concurrently.
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What You'll Learn
History of equity courts
The history of equity courts can be traced back to three significant periods: the medieval period (13th–15th centuries), the formative period (16th–17th centuries), and the period of systematization (17th–19th centuries).
During the medieval period, the Chancery Division was established by the King in the 13th century, following the separation of the Supreme Court of Judicature. While the Chancery Division did not function as a court, it performed judicial activities, such as determining the validity of writs issued in courts.
In the formative period, the Chancery developed into an independent and extensive bureaucracy, issuing writs related to inheritance or property transfers. During this time, the Chancellor became responsible for addressing "prayers" and "petitions" on behalf of the King, which included letters of remedy, relief, and grants.
The period of systematization saw the evolution of the modern system of equity, with the Chancellor gaining recognized judicial features and greater autonomy within the courts. This led to the development of the Court of Chancery, which issued decrees independently of the King's Council. The systemization of equity is often attributed to Lord Eldon and the introduction of the Judicature Acts in the 1870s, which fused the procedural aspects of equity and common law while maintaining their distinct natures.
In the early years of the United States, some states maintained separate courts for law and equity, while others combined both jurisdictions. The federal courts treated equity as a type of general law, applying principles derived from the English Court of Chancery to all equitable issues, regardless of federal or state law. Over time, most equity courts merged with courts of law, and various Acts granted courts combined jurisdiction to administer common law and equity concurrently. Today, equity courts are recognized for complementing the common law by addressing its shortcomings and promoting justice.
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Equity courts in England
In England, the equity jurisdiction is principally vested in the high court of chancery, which is distinct from courts of law. The Court of Chancery gets its name from being under the control of the Lord Chancellor, who acted as 'the King's conscience'. The Chancellor based his decisions on principles of natural justice and fairness, making decisions based on what seemed 'right' in a particular case, rather than following previous precedents.
The Court of Chancery was the Court of Equity, which developed to provide remedies not available in the courts of common law. Those seeking justice from the Court of Chancery had to show they could not receive justice in the common law courts and that they were without blame, known as coming to court with 'clean hands'.
The Court of Chancery held the power to grant relief, and not by common law. This led to the emergence of a specific court, a court of Chancery, which delivered 'equitable' or 'fair' decisions in cases that the common law courts declined to deal with.
The Judicature Acts of 1873-5 combined the courts of equity and common law. However, the principle that equity prevails over common law is still in force and is written into the Supreme Court Act of 1981.
The courts of equity in England are recognised for operating in personam, while the common law courts act in rem. This means the court of equity's jurisdiction constitutes acts only against the conscience of a person or persons, rather than a claim against a property item.
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Equity courts in the US
In the US, bankruptcy courts are an example of federal courts that operate as courts of equity. Some US states, such as Delaware, Mississippi, New Jersey, South Carolina, and Tennessee, continue to preserve the distinction between law and equity, as well as between courts of law and courts of equity. For instance, in New Jersey, this distinction is maintained between the civil and general equity divisions of the New Jersey Superior Court.
The evolution of equity courts in the US has been influenced by the country's history and social and political environments, reflecting the values that have shaped their equitable jurisdiction. The unique nature of these courts stems from their historical transformation, which has also influenced the evolution of equity doctrines, remedies, and underlying issues in jurisprudence.
The federal courts' equity jurisdiction pertains to situations that can arise in almost any litigation. Alexander Hamilton emphasised that a court of equity's primary use is to provide relief in extraordinary cases that are exceptions to general rules. Supreme Court Justice Joseph Story supported this view, stating that there are cases to which antecedent rules cannot be applied without injustice or at all.
The Process Act of 1792 ensured that equity cases remained distinct from courts of common law. The Act also allowed the Supreme Court to issue its own rules governing equity procedure in federal courts. The Supreme Court released detailed sets of rules in 1822, 1842, and 1912, aiming to maintain the separation between equity and common law jurisdiction and ensure uniformity in federal equity jurisprudence.
In 1945, the United States Supreme Court ruled in Guaranty Trust Co. v. York that federal courts could continue to rely on traditional equity principles to determine the availability of equitable relief, even in cases arising under state law. This "equitable remedial rights doctrine" is based on the understanding that equity is a single, independent body of principles applicable to all cases. However, it is important to note that equity should not be viewed as a uniform set of standards that federal courts must apply in every case. Instead, the power to impose an equitable remedy stems from the legal authority establishing the underlying right.
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Concurrent jurisdiction
The objective of concurrent jurisdiction is to provide "a more perfect remedy or to apply a more perfect procedure than the other court could give or apply". The Judicature Acts of the 1870s fused the courts of equity and the common law into a unified court system, though the systems themselves remained distinct. The unique nature of courts of equity is a result of their historical evolution, which has been crucial in shaping their application in case law, reflecting the values that have developed equitable jurisdiction.
In the United States, federal judicial power was extended to "all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority". The Process Act of 1792 ensured that equity cases proceeded "according to the principles, rules and usages which belong to courts of equity . . . as contradistinguished from courts of common law". The Act also allowed the Supreme Court to issue its own rules governing equity procedure in federal courts.
In England, the Court of Chancery played a vital role in enforcing uses that the rigid framework of land law could not accommodate, giving rise to the basic distinction between legal and equitable interests. Equity was developed to provide legal remedies for cases where common law was inflexible and could not fairly resolve the dispute. Equity does not pertain to definitive or formal rules, so courts assess explicit conduct through their flexible nature and discretionary powers.
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Equity vs common law
Equity and common law are two distinct court systems with separate histories and applications. Equity, or equitable law, is a body of law that developed in the English Court of Chancery to provide legal remedies for cases where the common law was deemed insufficient or too rigid to fairly resolve a legal matter.
The Court of Chancery, administered by the Lord Chancellor, operated based on conscience and fairness, with flexible and discretionary powers. It addressed fundamental principles of good faith, generosity, morality, honesty, and integrity, evaluating the relative fairness between parties. The Court of Chancery's jurisdiction was particularly important in cases involving land law, where the rigid framework of common law could not accommodate the enforcement of uses.
Common law, on the other hand, has its origins in royal justice, with the authority of the King of England. Initially, a writ was a vague order to do right by the plaintiff, issued at the King's pleasure. Common law courts act 'in rem', meaning their jurisdiction involves claims against items of property, as opposed to the conscience of a person or persons, as is the case with equity courts, which act 'in personam'.
The two systems have often come into conflict, with litigants strategically choosing between the two jurisdictions to suit their interests, a practice known as 'jurisdiction shopping'. The tension between the two courts reached a climax in the Earl of Oxford's case in 1615, where a judgment was allegedly obtained by fraud, leading to a stalemate between the Lord Chancellor and the Chief Justice of the King's Bench. This conflict was eventually resolved, with the conclusion that in any conflict between common law and equity, equity would prevail.
Despite their differences, the two systems are not rivals, and they can operate independently of each other. The Judicature Acts of the 1870s fused the courts of equity and common law into a unified court system, maintaining the distinct nature of each jurisdiction. This fusion has also been observed in India, where equitable principles are embedded in the judicial frameworks of the courts, with the Supreme Court of India expanding the application of its equitable powers in various areas of law.
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Frequently asked questions
A law court, also known as a court of common law, acts in rem, meaning it deals with claims against an item of property.
A court of equity acts in personam, meaning it deals with acts against the conscience of a person or a group of persons.
Law courts are based on definitive and formal rules, whereas courts of equity have flexible and discretionary powers.
Remedies provided by law courts are usually monetary damages. On the other hand, remedies in equity are based on the concept of fairness and may include specific performance, such as in the sale of a house or property.
In most jurisdictions today, all courts can apply both law and equity. However, a few common law jurisdictions, such as Delaware and New Jersey in the US, still preserve the distinction between law and equity courts.
