Nature of Equity (Introduction) Summarised Notes for the Equity and Trusts Law module, LLB, at City, University of London (achieved a 1st class using these) - can of course be used for other universities as well! Should be used with the full bundle of notes!
NATURE OF EQUALITY
Equity= system for certainty in rule-making to achieve fair results in individual circumstances,
common law less strict to prevent injustice to individual cases
Conscious is key, law either prevents any benefit growing to D due to some unconscionable
conduct or compensate any loss suffered by claimant from some unconscionable conduct
Equity allows courts with discretion to disapply statutory or common law rules whenever good
conscious requires it – but modern permits limited amount of discretion
Ensures fairness on moral basis – Lord Ellesmere in Earl of Oxford’s case “correct men’s
consciences for frauds, breach of trusts, wrongs and oppressions.. and soften extremity of law”
Understanding equity’s role in English legal system
oCollection of substantive principles developed over centuries by Courts of Equity (mainly Court of
Chancery) to judge people’s consciences
oHas procedural rules developed by Courts of Chancery under Lord Chancellor
Equity balances the rigidity of common law, flexibility allows to cope with social developments
Most significant early case in equity in England – The Earl of Oxford’s case – uses concepts from
Aristotle, where justice in some circumstances the creator of rules could not have anticipated
oARISTOTLE “For equity, though superior to justice, is still…justice and equity coincide, and
although both are good, equity is superior. What causes the difficulty is the fact that equity is
just, but not what is legally just. It is a rectification of legal justice” (tailors to individual cases) +
shows where statute or common law fails to anticipate a situation or create unfairness then
equity would intervene
Early Lord Chancellors were bishops and therefore were more religious conscience until 17 th
century
‘Conscience’= with knowledge – control for things you have done wrong
Conscience comes from objective stimuli, outside mind, so courts position to judge a person’s
conscience
Equity undertakes a moral task to prevent individuals benefitting from taking bribes, fraud etc –
Lord Chancellor Cowper states equity as a moral virtue similar to Aristotle who says equity
prevents any unfairness which might otherwise arise from rigid application of legal rules
Effect of Judicature Act 1873
Before Act litigant had to decide whether claim related to common law or equity if selected
wrong jurisdiction than claim would be thrown out and sent to other court. Judges were known
for delays in reaching their judgements which would take several years
By 1873 pressure for reform, Dickens played pivotal role led to Judicature Act 1873. 2 aims of
fusing equity and common law (by any court to award common law or equitable remedies), and
reorganise the courts with proceedings beginning in High Court divided into the divisions today
o s.25 of Judicature Act provided in all matters where there is any conflict between rules of equity
and rules of common law, rules of equity shall prevail
o Earl of Oxford’s case thus received statutory form
o Equity functions now on doctrine of precedent but not due to 1873 Act; until 1873 Act no more
clear distinction between sets of courts of common law and equity courts empowered to
apply both
Common law and equity has distinct claims and distinct remedies
E.g. of Common law claims: breach of contract, negligence, fraud
E.g. of Common law remedies: damages, common law tracing, money had and received
E.g. of Equity claims: breach of trust, tracing property, claiming property on insolvency
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