Nature and Scope of

Equity
Law of Equity and Trust
Course Instructor: Afroza Bilkis
 How did Equity develop?

• Equity law is derived from old English common law, when courts used their
discretion to apply justice in accordance with natural law. Equity law
supersedes common law and statute law when there is a conflict between
the two and neither can appropriately bring the correct verdict.
• Equity law came in response to the rigid procedures of England’s legal
courts. Frustrated plaintiffs turned to the King when they could not get the
outcome needed to continue living. The King then formed the Court of
Chancery to deal with the law of Equity.
• Common Law is the body of customary law which originated in the Curia
Regis (King’s Court), London. English Common Law was primarily developed
by judges and was based on judicial decisions and precedents. The country
saw the need for the Law of Equity because of the following two main
reasons:
• Under Common Law, there was only one remedy available, i.e., damages.
Thus, a just and fair remedy couldn’t always be given through Common Law
where monetary compensation was not suitable. This remedy did not
always have a significant concluding impact within cases.
• A civil action under Common Law could only be started by the means of a
writ which was a legal document where it was written why and on what legal
basis a person was being sued. Problems arose when a matter was not
covered by any writ. Making of the writs with every new case was stopped in
the 13th century and this meant that if a case was not already covered by
the writs, it was not carried forward.
• This generated a huge amount of dissatisfaction among the public because
many times they had to settle with the inappropriate remedies or their cases
were not even carried to the court as the writs were too narrow or rigid.
Subsequently, the Court of Chancery was directed to take up the case which
was referred to the king by petition and the Chancery Court developed the
Law of Equity.
• Equity was mainly thought of as fairness and it was a very powerful law as it
overcame the conflicts with the Common Law. The Chancellor decided the
cases of which the King had taken note, he did so by largely relying on his
sense of fairness and justice and thus developed a large body of principles
which became the Law of Equity. It was very important to solve the conflict
between the Law of Equity and the Common Law. King decided that
between the conflict of Common Law and Equity, Equity should prevail.
 What is Equity

• Equity is fairness and it means to reach natural justice as much as possible. (What ought
to be)
• It is to soften the rigours of law and ensure that no wrong goes unremedied and that
decisions of authorities do not become arbitrary.
• It is do that to others what we expect others to do to us.
• It has the capacity to correct the law where law fails due to universality.
 Two meanings of Equity
Natural
Broad Sense
Justice
Equity Portion of
Technical
Natural
Sense
Justice
 Is Equity law?
• The law of equity began in the court of chancery which was set up because a fair and
just remedy could not be given through common law.
• The law relating to equity is largely built on precedent. The rules have been built upon
by previous situations which they have dealt with. Although there has been a lot of
disagreement about changing laws and adding to the law of equity, the rules that have
been accepted by proceeding judges became precedent and are now known as maxims
and are used as guidelines by the court.
• Lord Denning says equity is born from the interpretation of judges and their problem
solving abilities.
• There are alterations to the law as recent as the 1975 Eves V Eves case.