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What Is a Court of Equity?

The judge in a court of equity has an opportunity to use his discretion in most matters.
A court of equity will judge based more on fairness than on the law.
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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 12 December 2014
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A court of equity is a court which can apply equitable remedies to disputes. These courts operate within the legal system, but rather than focusing on the application of law, they look at cases and determine outcomes based on fairness. Also known as chancery courts, they can be found in many regions of the world. In some areas, they operate entirely separately from courts of law, and in others, a court of law is empowered to handle both legal and equitable remedies.

The concept of a chancery court arose in England when citizens began to express dissatisfaction with legal judgments handed down by the courts. They argued that the law was sometimes unfair, and that some situations were not covered by the law, making it impossible for the courts to respond. Courts of equity arose to handle legal situations in which people might want damages beyond monetary damages, with the judge empowered to act on discretion, rather than following the rule of the law.

A court of equity still has some legal responsibilities, but it has more leeway when it comes to judging cases. It can hand down a judgment which includes an equitable remedy such as an injunction, as opposed to simple monetary damages. These courts can be used for things like specific performance, for example, in which someone is asked to make good on a breach of contract.

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The judge in a court of equity can weigh many different sides to a case and explore different perspectives to arrive at a judgment. This gives the judge an opportunity to use discretion and judgment, rather than having to rely on the narrow confines of the law. The outcome may be deemed more fair or equitable in those cases heard in a court of equity.

In areas where courts of equity and courts of law are separate, people may have the option of filing a case with one or the other, depending on the type of case and the policies. In areas where courts are empowered to act in both capacities, the judge can consider the issue of equity when developing a sentence or responding to a request for an equitable remedy. Judges who serve in such courts must demonstrate a capacity for critical thinking, discretion, and fairness beyond a basic understanding of the law, as the judge's capacity for evaluating a case fairly can be critical in a court of equity.

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Discuss this Article

anon276199
Post 7

Delaware is the state that receives the most amount of recognition for having a large number of court cases going through its chancery courts, as many corporations are incorporated in that state.

We also have courts of equity in several other states, and bankruptcy courts in all states, so it is already alive and well in the U.S.

I personally would love to see the concept spread to all states so there can be a clear distinction to the courts as to what kind of judgment the plaintiff would like to achieve. Example, if you want to follow the black letter of the law, file your case in the district courts. If not, then file your complaint in a chancery court.

KLR650
Post 5

There is a little bit of this in the U.S. in one area - Indian reservations. At least for some matters, on tribal land you can have disputes settled by tribal council or tribal court. They use law, tradition, and "horse sense" to come up with the best answer. I do not know how "big" of an issue you could take up with them, though, and I don't think their decision is binding in the outside world.

emtbasic
Post 4

@SZapper - You are right about arbitration being the U.S. version of a court of equity. The difference is that their decisions are not always binding.

Obviously a lot of people, or at least corporations, agree with you, because you see arbitration agreements in all kinds of contracts now. The arbitrator has a lot of maneuvering room to try and come up with a fair settlement.

Viktor13
Post 3

@SZapper - I get what you're saying, but I am not sure that would be a good thing. You said, "When I hear about legal decisions that follow the letter of the law I sometimes think they are a little unfair". What is the alternative? If we don't follow the law, then how would you ever know if you are doing the right thing, legally speaking.

If you followed all of the laws and rules and then had a court case go against you anyway, that could make it quite difficult to operate a business or whatever, because you could never know when you would end up in court and possibly lose a bunch of money.

I do understand about the apparent lack of common sense in some legal rulings, though.

strawCake
Post 2

@SZapper - Respectfully, I think a court of equity is the last thing we need in this country. How would that even fit into our legal system? Plus it seems like there would be a lot of leeway for the judge. Would you really trust one person to make a decision like this? I certainly wouldn't.

SZapper
Post 1

I think this is a pretty neat idea. We definitely don't have these in the United States as far as I know. I think maybe arbitration is the closest thing we have to a court of equity.

I think a court of equity would fulfill a definite need in this country though. When I hear about legal decisions that follow the letter of the law I sometimes think they are a little unfair. It seems like it would be nice to have an equitable solution to the problem that actually makes sense!

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