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Modern equity mainly comprised with substantive and procedural principles and they only allow the courts limited discretion. To understand equity there are three different ways. First, English law ensures that rigid application of statutory and common law does not create any unfairness when apply those rigorous formalities in a specific case, because equity act as a natural justice and it has a moral basis. The moral purpose of equity was described by Lord Ellsmere in the “Earl of Oxford’s Case  as being to ‘correct men’s consciences for frauds, breach of trusts, wrongs and oppressions…..and to soften and mollify the extremity of the law’”  . This moral purpose restraint defendant from accruing unconscionable benefits of situation and also it prevents unintentional permission of unconscionable results of the law. Secondly, collection of the substantive principles evolved over the centuries in the Court of the Chancery to judge the consciences of the people. According to these facts it’s understood that equity act as a substantive, code of technical rules not just as a supplier of moral principles. Thirdly, we can be understood equity as a collection of the procedural rules and different form of actions developed over the centuries under the authority of the Lord Chancellor in the Chancery Courts.
The birth of equity lies in the short comings of the common law system. The common law has deficiencies such as remedy is not appropriate to the particular loss where a remedy is available and there are situations where remedies are not available for particular cases in these situations equity provide different solutions to those problems working alongside the common law. And also another problem which is arises for all legal system is that, how to create legislation and general common law treating each and every individual circumstances justly, equity steps in these situations and performs this balancing act against the rigorous form of the English legal system. German philosopher Hegel has generated the following definition regarding the balancing act of equity.
“Equity involves a departure from formal rights owing to moral or other considerations and is concerned primarily with the content of the lawsuit. A court of equity, however, comes to mean a court which decides in a single case without insisting on the formalities if a legal process or, in particular, on the objective evidence which the letter of the law may require. Further, it decides on the merits of the single case as a unique one, not with a view to disposing of it in such a way as to create a binding legal precedent for the future.” 
Although, Hegel was not a lawyer he was one of the most important philosopher of the last two hundred years. This definition particularly useful because it shows how the equity achieve fair and just results where rigid and literal application of the common law and legislations lead to unconscionable and injustice.
The Judicature Acts 1873 and 1875 are most important Acts when discuss about the relationship between common law and equity. In nineteenth century the idea of having two separate courts that is common law courts and Court of chancery gave rise to the so many problems to the litigants. The common law courts gave only common law decisions and they did not have equity jurisdictions; the court of Chancery did not have the right to interfere with the common law judgement or change the judgement given by the common law courts in order to give a fair result to the litigants. The litigant would have to present a bill if he had not get fair jurisdiction from the common law, even if the common law acknowledged that equity courts would have given fair judgement they had to follow the same procedure. Common law courts could not give equitable remedies such as injunction because their jurisdiction was limited. The same was happened in the Court of Chancery they could not able to grant damages but even though equity courts grant equitable remedies. In nineteenth century the cases which came to the Court of Chancery had increased considerably and matter of that resulted in numerous delays.
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To overcome these problems due to the separate court system the Judicature Act 1873 and 1875 were enacted to re assemble the court system in England. This act abolished the separate court system and established one unified court, the Supreme Court, which this court would administer the law and equity at the same time. The Supreme Court Act 1981 re-enacted the modern position. This Act divides the Supreme Court into number of divisions. This division helps to administer law and equity together. When there is a conflict between law and equity the rules of equity are to prevail. This provision of the law clearly stated in s.25 (11) of the Supreme Court of Judicature act 1983,
‘Generally, in all matters not hereinbefore particularly mentioned in which there is any conflict or variance between the rules of equity and the rule of common law with reference to the same matter, the rules of equity shall prevail.’ 
The main purpose of the Judicature Acts was to allow single court to administer both the law and equity together. When we say both the laws administer in one court, a frequent question arise, that is whether the common law and equity fused into one single comprehensive body of law can be used to any type of dispute? In other words whether a claimant can ask from the court equitable or common law remedy without considering the nature of his claim? Professor Ash Burner once commented regarding above questions by describing the relationship between common law and equity as ‘the two streams of jurisdiction though they run in the same channel run side by side and do not mingle their waters’.  In Salt v Cooper the great Sir George Jessel said that the main purpose of the Act ‘has been some times inaccurately called the fusion of law and equity; but it is not any fusion, or anything of the kind; it was the vesting in one tribunal the administration of law and equity in every cause, action or dispute which should come before the tribunal’ 
In recent times, there is a common belief that these two laws which are equity and common law truly mingled and there is a single coherent body of law consisting equity and common law. In United Scientific Holdings Ltd v Burnley Borough council  Lord Diplock stated that ‘it is incorrect to suggest that the common law and equity are fused in a single coherent body of law.’  If that is so,what is then the professor Ashburner’s metaphor about the two streams which run side by side and do not mingle their waters? Gary watt clearly provides the answer for this metaphor; who writes, ‘the image of two streams in single channel is not a helpful one. It would be better to see the single river of law being composed of two parts: the riverbed and the water that runs over it. The common law is the river bed, in places it is as unyielding as stone, but in those places over time it is softened by the more fluid processes of equity’ 
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