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.