Equity & Trusts
8. What is Equity?
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 24 Jul 2015
- Under the common law, parties are considered to be free to act as they will. If they breach their obligations under a contract or statutory duty they risk being ordered to pay damages.
- Equity deals with cases where an order for damages is argued to be inadequate and the parties are more likely to be ordered to fulfil or refrain from breaching their specific obligations.
- As an example of this difference if you took your great grandmother’s engagement ring to a jeweller for cleaning and they pawned it:
- in common law they would most likely be ordered to pay damages or compensate you for the loss of your property; but
- in equity you could ask that they be ordered to return the actual ring to you.
- Judges acting in equity generally do not award damages. They aim to do justice between the parties by a discretionary grant of relief. At times this relief may include an order for compensation if the judge believes that is appropriate in the individual circumstances.
- A discretionary decision is one where the judge exercises their own reason and good judgment to choose how to resolve the dispute between the parties. While they are still required to consider the decisions of previous judges in similar matters (precedent) they have more flexibility to tailor the decision to the specific circumstances of the matter before them.
- Equity is therefore a discretionary area of law that supplements civil law. It fills in the gaps where a common law or statutory remedy is unavailable or inadequate.
- The focus of equity is on restraining unconscionable conduct and enforcing the performance of duties.
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