IEL 7: Equity/Billigkeitsrecht

Developments in civil law

From 1066 on, the central system of law was the common law, so called because it was common to the whole country, not local. The term later took on other meanings too.

When we talk about the history of the common law, we are usually thinking about civil law, which individuals are interested in developing, not criminal law, which is the prerogative of the state.

The common law courts were centred in London and decided what was law. This common law became increasingly rigid. There were a restricted number of actions that individuals could take. If a person had a problem for which no action existed, then however unjust it seemed, there was no remedy. And if there was a remedy, it was only damages.

The way in which this rigid system was alleviated was by people petitioning the Chancellor, the king’s right-hand man, for help. The Chancellor’s decisions gradually developed into a second, supplementary system of law known as equity. It was administered by the Court of Chancery.

Until 1875, there were now two systems of law: the common law and equity. They had separate court systems, and it was eventually decided that where there was a conflict between the two, equity should prevail. For example, equity created the trust, and trusts remained in effect in English law.

Equity originally means fairness, and it was so named because it was created to give a fairer treatment to those who suffered under the common law system. However, it was not always fairer than the common law.

Equity was never a complete system, because it was developed to fill in gaps in the common law. It created:

new rights, for example the rights of a beneficiary under a trust

new remedies, for example the injunction (an order of the court compelling a person to do something or restraining a person from doing something) and specific performance (an order of the court compelling a person to perform an obligation existing under a contract, rather than just to pay damages for non-performance.)

Equity eventually became just as rigid as the common law had been.

It is not difficult to understand how this situation arose, and how equity came into existence. What is more difficult is the role of equity today, after the two systems were merged in 1875. Both systems are now applied in all courts, but the distinction between them is still recognized today.

Equity today

Equitable remedies are discretionary: the court can decide whether or not to award them to the person who wins a case. If that person has behaved in a way the court does not approve, it may decide to award only damages, the common-law remedy (if appropriate). There is a maxim He who comes to equity must come with clean hands which applies here. There are a number of these maxims of equity, which are always amusing.

Equity plays a large role in the law of property and trusts. In land law, there are legal (common-law) rights, and equitable rights.

Some language notes:
The word law is sometimes used to mean common law as opposed to equity. When there were separate courts, an action was said to be at law or in equity. At law is short for at common law. Similarly, an action could be described as legal or equitable. Legal here means nach dem Common Law /gemeinem Recht, not rechtlich or gesetzlich.

An injunction is a court order to do or stop doing something, among other things. It can be interim or permanent. There is no single German equivalent, therefore. It might be an einstweilige Verfügung, for example. It might be Verfügung, Anordnung, Unterlassungsverfügung, depending on the situation.

Equity has other meanings. For example, a person may own a house with a mortgage on it. If the house is worth £200,000 and the mortgage is for £50,000, the equity in the house is £150,000. This is sometimes called the equity of redemption. If a house has lost value and is worth less than the mortgage, the term negative equity is used. This is a term frequently encountered in the press.

One might encounter the expression legal or equitable remedies in an otherwise harmless-looking contract. Here is a sentence someone on proz.com wanted to translate into German:

This paragraph does not limit any other remedies that X may have against Y as contained in this Agreement or in law or equity.

To translate this, you need to know whether the contract is now to apply in Germany. (Some translators ‘localize’ the legal small-print on software licences – really, this work should be done by a lawyer, who at least has professional insurance to cover legal work). If so, common law and equity are no longer relevant and it just means ‘any remedies whatsoever’. If the text refers to England and Wales, for instance, the better translation would be nach Common Law oder nach Billigkeitsrecht. Suggestions on ProZ included auf vertraglicher oder gesetzlicher Grundlage and aufgrund Gesetzes oder aus Billigkeitserwägungen. One could argue about that.

You might meet the term equity partner in a law firm, meaning a solicitor who owns a share of the firm, in contrast to salaried partner, who is more important than an associate solicitor but only receives a salary, not a share of profits.

This is probably enough to think about for today. Here is a nice simple explanation of equity (in the USA) on the Cornell University website, which I recommend for legal information.

5 thoughts on “IEL 7: Equity/Billigkeitsrecht

  1. Unfortunately the number of spam comments seems to have gotten worse lately. It’s enough to put one off blogging… My rush of spam comments has slowed down to a trickle again, so hopefully yours will too.

    • Well, my comments weren’t as long as yours! They have slackened off now. But there have still been some others, without a Facebook link.

  2. I see you’re using Serendity, which is based on PHP. Maybe you should look into using Bad Behavior (http://bad-behavior.ioerror.us/) as an additional bot blocker. I use it on my WordPress blogs (there’s a plugin to make it work easily…for Serendity, you might have to use the Bad Behavior Connector).

    • I have had a look on the Serendipity forums. Someone enquired about Bad Behavior five years ago, so it doesn’t seem to be the latest thing. I’m also told that the combination of plugins I’ve already got is as good as it gets. So I will continue with that.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.