What Is the Difference between Common Law and Equity?

The difference between common law and equity comes down to who hears a case and passes judgment on it, as well as the type of action for which such judgment may call. Common law typically refers to laws based on precedence and the rulings of judges who hear a case in a courtroom. Equity, on the other hand, refers to laws that are similarly established by court rulings but deal with judgment and justice through equitable decisions. While proceedings regarding the two are somewhat similar today, in the past they were divided into two different courts.

Both common law and equity stem from the judicial and legal history of England. These terms and methods for justice have found their way into many legal systems with roots in the laws of England, such as the US and other areas that were English colonies. It can be easiest to understand the difference between the two by first understanding what each system is.

Common law refers to laws created and upheld through the rulings of a judge or jury hearing a case. This is also sometimes called case law, and such precedents are quite important in a legal system that relies on common law. Equity, on the other hand, usually refers to judgments that deal with fairness in justice, often stemming from a sense of “natural law.”

While both types of law have roots in English legal traditions, they stem from two separate courts. English common law was established in the legal courts, which were presided over by judges who served as the source and upholders of the law. Equity, on the other hand, came from the Courts of Chancery, which were presided over by the chancellor to the presiding monarch. This essentially evolved from the rights of English citizens to appeal a common law decision to the monarch, who was the final arbiter of justice. A king would often appoint his chancellor to act in his stead.

There was initially a separation, therefore, between the common law and equity courts, though similar cases might be heard in both. In modern legal practice, the two are separated by the way in which the cases are heard and the type of decision that can be handed down. Most cases in common law are heard by a jury, with a judge as arbiter, and decisions can result in punishment or financial restitution.

Equity cases, however, are typically heard only by a judge who passes judgment on the case, which can take the form of action or cessation of action by one party. Someone who steals a computer, for example, might be ordered by a common law court to repay the value of the computer to the wronged party, which would be just but may not be fair. A court of equity, on the other hand, could order the computer be returned to the owner as a more equitable solution to the situation.

Common law is an intricate legal system shaped by historical judicial decisions and precedents. According to the principle of stare decisis, which states that a decision in one case can be used as a precedent in comparable instances, judges develop this body of law by their decisions in legal matters. The common law system is incredibly vast, as it encompasses legal rules that have been developed over centuries and through a broad range of legal disputes.

Equity is a system of law developed in England to supplement the common law when it was inadequate or unjust. The principles of equity include fairness, justice, and conscience, and they were developed to provide legal remedies where the common law did not suffice. The remedies offered by equity are not limited to damages, and they can include injunctions, specific performance, rescission, and other equitable remedies that may address unique circumstances.

The principal difference between common law and equity lies in their origins and the remedies they offer. Common law is established by judicial decisions and precedents, while equity has developed as a separate system of law to provide remedies when common law is insufficient. Common law typically offers legal remedies like damages, while equity provides equitable remedies, such as specific performance or injunctions.

Yes, common law and equity can coexist, and they often do so. The two have been combined into one body of law in numerous jurisdictions. Judges have the discretion to base their decisions on either common law or equity grounds, as appropriate.

In most legal systems, the common law takes precedence over equity. However, there are always exceptions to the rule, and it ultimately depends on the particular legal system in operation. When there is a dispute between common law and equity principles, equity principles may take precedence. The courts have the final say on which legal system applies to a given case, and their decision is grounded in the specifics of that case.