Development of Equity

Historical Development of Equity

Common Law Origins

  • Early Court Decisions: Based on local customs and previous rulings, leading to inconsistencies across different parts of England.
  • King Henry II's Reign: Marked the beginning of Common Law through the strengthening of Royal Courts, introduction of juries, and unification of the legal system.
  • Definition: Law common to the people of England, controlled by the Royal Courts, originating in the 11th century.

The Writ System

  • Definition of a Writ: A document detailing a claim.
  • Formalities and Technicalities: The writ system was extremely formal and beset with technicalities.
  • Limitation of Claims: Claims were only allowed if they fit into an existing writ.
  • Consequence: “No writ, no remedy” meant cases without an existing writ would not proceed.
  • Chancellor’s Office: Clerks in the Chancellor’s Office began issuing new writs to overcome these difficulties, effectively creating new legal rights.
  • Provisions of Oxford (1258): Forbade the issuance of new writs unless the case followed a previously issued writ.
  • Focus on Validity: Judges often spent more time examining the validity of the writ than the merits of the claim.

Inadequacies of Common Law

  • Limited Remedies: Damages were the only common law relief, often proving inadequate.
  • External Factors: Petitioners were often unable to obtain remedies due to the disturbed state of the country or the power/wealth of the defendant influencing juries.
  • Formalities: Common law relied heavily on formalities, such as written evidence for contract enforcement.
  • Doctrine of Stare Decisis: Strict adherence to precedent further limited flexibility.

The Jury System

  • Vulnerability: Juries were easily intimidated and bribed by rich defendants.

Petitions to the King

  • Dissatisfaction with Common Law: Aggrieved parties petitioned the King due to the Common Law system's failure to uphold justice.
  • King as Fountain of Justice: The King was seen as the ultimate source of justice.

The Chancellor and Chancery

  • Chancellor's Role: The most important person after the King, serving as the Keeper of the King’s Conscience.
  • Chancery (Chancellor’s Office): Addressed petitions to the King.
  • Early Jurisdiction: Initially, the Chancellor lacked clearly defined jurisdiction.
  • Basis of Justice: Some Chancellors believed the law should align with the law of God.
  • Remedying Common Law: The Chancellor dispensed justice based on fairness, conscience, and natural justice, remedying the Common Law.
  • Procedures: The Chancellor refused to use juries, questioned parties, and issued subpoenas.
  • Development of Equity: Equity developed without fixed rules, decisions based on the Chancellor’s personal and moral ideas of right and wrong.

Conscience and Equity

  • Variability of Equity: “Equity varied according to the conscience of the Chancellor, hence ‘Equity varied with the length of Chancellor’s foot’.” (John Seldon)
  • Evolution of the Court of Chancery: Petitions were initially heard in the Chancellor’s office, which evolved into the Court of Chancery by the end of the 14th century.
  • Purpose of the Court: To deliver ‘equitable’ or ‘fair’ decisions in cases the common law courts declined to deal with.

Popularity and Conditions of the Court of Equity

  • Reasons for Popularity: Flexibility, superior procedures, and more appropriate remedies.
  • Conditions to Meet:
    • Show inability to receive justice in common law courts.
    • Show absence of moral blame.
    • Show no delay in bringing the case before the court.

Equity vs. Common Law

  • Consultation: Early close consultation between the Chancellor and Common Law judges regarding relief.
  • Conflict: Conflict arose as common law courts would make an order in favor of one party, and the Court of Chancery the other party.
  • Common Injunctions: The Chancellor extended jurisdiction by issuing Common Injunctions, preventing enforcement of common law judgments obtained by bad conscience and oppression.

Earl of Oxford's Case (1616)

  • Scenario: A Common Law judge gave a judgment in breach of a statute, obtained fraudulently.
  • Intervention: The Court of Chancery issued an injunction to prevent enforcement of the judgment.
  • Ruling: In cases of conflict, equity was to prevail over common law.
  • Justification: “The Office of the Chancellor is to correct Men’s conscience for frauds, breach of trusts and oppression, and to soften and mollify the extremity of the laws”.

Downfall of the Court of Chancery (17th Century)

  • Inefficiency: Hampered by inadequate judicial staff; the Lord Chancellor had too many functions.
  • Corruption and Abuse of Power: Ready to issue common injunctions for profit.
  • Dependency on the Fee System
  • Chronic Delays
  • Lack of Recognition: Courts of law refused to recognize equitable rights and titles.
  • Confusion: The two separate courts led to parties commencing actions in the wrong jurisdiction, or defendants raising equitable defenses before a court of law.

Settled Development of Equity (19th Century)

  • Sir Francis Bacon (1617): Settled the principles for the exercise of Chancery’s jurisdiction; brought harmony between Common Law and Chancery.
  • Lord Nottingham (1673-1682): ‘Father of Modern Equity’ – equity was systemized, with classifications to trusts; Lawyers began to be appointed as Chancellors.
  • Lord Eldon (1801-1827): Strengthened the idea that decisions must be based on precedents; consolidated principles developed by predecessors.
  • Transformation: Equity transformed into a system of law almost as fixed as the Common Law.

Equity's Role

Equity is not part of the common law, but a moral virtue that qualifies, moderates, and reforms the rigour, hardness, and edge of the law. It assists the law where it is defective and weak in the constitution. . . . Equity therefore does not destroy the law, nor create it, but assist it. (Lord Chancellor Cowper)

Timeline of Key Events

  • Pre-11th Century: Anglo-Saxon England - decisions based on local customs, including trial by ordeal and trial by combat.
  • 11th Century: Norman Invasion of England - William the Conqueror sends judges around the country to ensure similar rulings; precedent decisions developed.
  • 1154-1189 (Reign of Henry II): People begin appealing to the King; Office of Chancellor growing in power - "keeper of the King's conscience".
  • 1258: Provisions of Oxford drawn up, reducing flexibility in common law and formally introducing the concept of precedent.
  • Court of Chancery Established: More and more people turned to the King due to the inflexibility of common law and for cases with no precedent; Court of Chancery established to administer laws of equity, with wider legal remedies; this led to 2 types of law – common law and equity.
  • 1620: King James I attempted to overcome conflict between common law and equity law by stating that equity prevails over common law.
  • 1873: Judicature Act 1873 combines common law and equity law.