Equity all began centuries ago when even common law itself was being developed. Many people were approaching the King asking him to intervene on what they saw as injustices in the common law courts. The King decided he would look into several of the claims and sometimes he decided that the rulings given by the common law courts should be changed. The King had more and more people approaching him for his intervention in certain civil matters. As a result of this the King became overwhelmed with all the requests and assigned this task to his Chancellor. The Chancellor also became so busy with requests that he set up his own court to look at the claims as a matter of equity.
Under the guidance of successive Chancellors from the sixteenth century onwards, equity began to then develop its own set of rules such as following the reasoning in cases that had been previously decided in equity. These many rules, for example ‘’He who comes to equity must come with clean hands’’ are known as the maxims of equity. This state of law eventually became very confusing because people were facing in a sense two different systems of law, two different sets of procedures and two different courts. Many centuries passed with this confusing way of law continuing until eventually a more logical system was introduced. In around 1873/1875 the Judicature Acts combined the two systems of law into one merged system of law. To a lawyer though, equity is still visible in this system today as its remedies, maxims and trusts are still very much a part of the modern system of law. Equity was never seen as a complete system of law by itself whereas the common law system was. Common law and equity developed over centuries but the difference was that the common law system was already in place before equity started to develop.
Examples of how equity has improved common law to give it an overall fairer legal system.
People can enter into agreements with other people knowing that the law will justify the matter of the other person doesn’t carry out their side of the agreement. If the other party doesn’t carry out their side of the agreement, they can be sued for what is known as ‘’breach of contract’’. If there is found to be a breach of contract then under the common laws rules the plaintiff will be awarded money damages. This however, can seem unfair to just simply claim money to compensate for the breach of contract. Many think it would be fairer for the defendant to actually do what they stated to do in the contract. Common law does not recognize this remedy, meaning that it does not have to be done. To overcome this, the plaintiff has to turn to equity for an injunction, which is there to enforce the agreement. As a plaintiff, you would first show the courts that you and the defendant had a legally binding contract and then the plaintiff would ask the court to grant an equitable remedy which means that the defendant has to carry out their side of the agreement. When a person asks for an equitable remedy, it is up to the court entirely to decide whether or not the equitable remedy should be granted. The courts will look at both the plaintiffs and defendants behaviour in the matter; this is where the term ‘’He who comes to equity must come with clean hands’’ comes from. If the court decides that the plaintiff has not acted fairly towards the defendant then the claim for equitable remedy will not be granted. This contrasts highly with the common law as the court would take no notice of how the plaintiff has behaved towards the defendant and would state that if the common law has been broken, then it must award damages to the party that has suffered. An example of this is if Ben agrees to sell his motorbike to Will and Will has promised that he will give Ben £1,300 for the motorbike in exactly 1 months time (and collect the motorbike then). Ben, three weeks later then sells the motorbike to someone else for £2000. Will has two choices of what to legally do about the matter.
He can,
Wait for Ben to sell the motorbike to the other person and then sue him for breach of contract. To be able to do this he needs to find a motorbike similar to the one Ben had agreed to sell him. Then the difference in price, which he would have to pay buying the similar bike elsewhere, would be the amount he should sue for. This option is based on the principles of common law.
As an alternative Will could,
Go to the courts before Ben sold the bike to someone else and ask the courts for an injunction that would stop Ben from being able to sell the bike on to someone else. For this to be successful he must convince the courts that he did actually have an agreement (contract) with Ben, and that he acted fairly in his dealings towards Ben. This alternative is relying on the principles of equity. Equity cannot be used unless there is a breach within the common law whereas Wills first option relied purely on the system of common law.
b) Describe the developments of equity in the twentieth and twenty first centuries.
