The Roots of Modern Equity
In medieval England, the king was the source of all justice. Legal matters were decided in courts of law. People who were unhappy with the results could appeal to the king, who was supposed to do what was just and right for his subjects.
Fans of HBO's "Game of Thrones" saw this in action when young Daenerys Targaryen took the throne as queen of a newly-conquered city. Citizens were ushered in, one by one, each seeking justice: the freed slave who didn't want freedom, the son who wanted permission to bury his father. Daenerys quickly realized that being a fair and just queen was no easy task.
Back in medieval England, the kings seemed to have a similar reaction. They began referring these appeals to the chancellor – a government official similar to a secretary of state. The early chancellors usually had religious rather than legal training, so their rulings were guided more by morality and principles than by the law.
By 1290, the chancellor had his own chancery court. Courts of law were often criticized for being rigid and corrupt, but the chancery court was viewed as more flexible and less likely to be influenced by wealth and power.
These early chancery judges used three important tools to discover and correct wrongs: subpoenas, injunctions and contempt orders. Through the subpoena, they could require people to come to court to answer questions. Through the injunction, they could order someone to do (or not do) something, and with the contempt order, they could punish people for disobeying court orders.
The Chancery judges were both strong and moral: they "carried the Bible in a mailed fist." Chancery courts were viewed as champions of the poor and powerless.
Over the next couple of centuries, some people criticized the chancery courts for reaching inconsistent decisions. That began to change when Sir Thomas More, a lawyer, was appointed as chancellor in 1529. More helped develop consistent chancery court rulings that other chancery judges could use to guide their decisions. These types of rulings are called legal precedents. More also established certain principles of equity that lawyers use even today.
For the next century, the courts of law and chancery operated as two separate and competing legal systems. People who were unhappy with the result in one court would go to the other court and try to have it overturned. Attorney General Sir Francis Bacon ended this conflict in 1615, when he ruled that when law and equity conflict, equity wins.
Thus, during the 1600s and 1700s, equity was the main principle guiding English justice.
By the 1800s, however, the English equity courts had many of the same problems that law courts experienced a few centuries before: delays, corruption, inflexible rules and high fees. Laws passed in 1873 and 1875 merged the courts of law and equity in England, allowing one court to make rulings based upon both law and equity.